Reed Smith In-depth

The High Court of Singapore refused an application to set aside leave to enforce an arbitral award on the basis that (among other things) the arbitration agreements named a Chinese arbitral institution that does not exist. The court refused the application for multiple reasons including that the name of the institution was a misnomer for CIETAC.

The other reasons for refusal were that proper notice of the arbitration was served, the award was binding, and whilst the award referenced inapplicable CIETAC provisions, the respondent could not explain how those references impacted the conduct of proceedings or the making of the award.

What happened between the parties?

Shanghai Xinan Screenwall Building & Decoration Co., Ltd. (Xinan), a Chinese company, was awarded damages plus interest and costs in an arbitration seated in China (Award). The arbitration had been commenced against Great Wall Technology Aluminium Industry Pte Ltd (Great Wall), a Singaporean company, to resolve disputes arising out of contracts between Xinan and Great Wall (Contracts). Great Wall did not participate in the arbitration.

The Contracts contained the following arbitration clause:

“Any dispute arising from or in relation to the contract shall be settled through negotiation. If negotiation fails, the dispute shall be submitted to China International Arbitration Center for arbitration in accordance with its arbitration rules in force at the time of submission.”

Xinan applied for and obtained leave to enforce the Award under section 19 of the International Arbitration Act (Cap 143A, 2002 Rev Ed). Great Wall then applied to set aside the leave under that act  on the following grounds:

(i) Under section 31(2)(c), arguing there was no proper notice of, nor the opportunity to participate in, the arbitration where notices were sent to the wrong address;

(ii) Under section 31(2)(f), arguing the Award had not become binding;

(iii) Under section 31(2)(b), arguing the arbitration agreement was invalid under Chinese law because there is no arbitral institution called “China International Arbitration Center”; and

(iv) Under section 31(2)(e), arguing the arbitral procedure did not comply with Chinese law because the Award referenced the domestic rules of the China International Economic and Trade Arbitration Commission (CIETAC) while Great Wall was Singaporean and had not agreed to CIETAC anyway.

Great Wall introduced grounds (iii) and (iv) in a reply affidavit in which it exhibited a new supporting opinion on Chinese law. The reply affidavit was filed after Xinan filed its responsive affidavit. The introduction of new evidence at the reply stage meant Xinan had no opportunity to respond.