Reed Smith Client Alert

This client alert was originally published in Practical Law Arbitration. Reproduced with permission. This client alert is co-written by Reed Smith Pte Ltd and Resource Law LLC who together form the Reed Smith Resource Law Alliance in Singapore. Reed Smith Pte Ltd is licensed to operate as a foreign law practice in Singapore. Where advice on Singapore law is required, we will refer the matter to and work with licensed Singapore law practices where necessary.

In Quanzhou Sanhong Trading Ltd Liability Co Ltd v ADM Asia-Pacific Trading Pte Ltd [2017] SGHC 199, the Singapore High Court considered whether an arbitral tribunal exceeded its jurisdiction if it erred as to the governing law of the contract.

Auteurs: Simon Jones Rachel Loke (Associate, Resource Law LLC)

* Simon Jones is a Partner in Reed Smith's Singapore office. Rachel Loke is an Associate in Resource Law LLC. 

Speedread

In an appeal against a decision dismissing an application to set aside an order granting leave to enforce an arbitral award, the Singapore High Court has reiterated the position that if an issue is firmly within the scope of submission to arbitration, it cannot be taken outside of that scope simply because the arbitral tribunal came to a wrong, or even manifestly wrong, conclusion on it. The court was of the view that the above applies with equal force where the issue in question is that of the governing law of a contract, stating that there was no reason why an issue as to governing law should be treated differently from other issues submitted to arbitration.

In this case, a China International Economic and Trade Arbitration Commission (CIETAC) tribunal had found that two systems of law applied to the contract between the parties although the main contract sought to incorporate a Grain and Feed Trade Association (GAFTA) standard terms which provide for English law as the governing law.

This decision clearly illustrates the Singapore courts' prevailing attitude of minimal curial intervention in relation to arbitration. As is evident from the court's reasoning, the Singapore courts will only intervene when a statutorily prescribed ground for refusal of enforcement is clearly established. (Quanzhou Sanhong Trading Ltd Liability Co Ltd v ADM Asia-Pacific Trading Pte Ltd [2017] SGHC 199.)