Enforcement of Interim Measures Ordered in Singapore-Seated Arbitration Unaffected by Forum Non Conveniens Doctrine

In a recent case before the Singapore High Court, the judge clarified that parties intending to enforce interim measures granted in Singapore seated arbitrations under Section 12(6) of the International Arbitration Act 1994 do not need to be concerned about the existence of a more or most appropriate forum.

The case of CXG and another v CXI and others [2023] SGHC 244 (CXG v CXI) concerned the defendants’ application to stay the claimant’s application for permission under Section 12(6) of the International Arbitration Act 1994 (IAA) for judgment to be entered in terms of an interim order granted in a Singapore-seated Singapore International Arbitration Centre (SIAC) arbitration (Leave Application) on the basis that it is not appropriate for the Singapore High Court to exercise jurisdiction to hear the Leave Application, as Singapore is not the proper forum (Stay Application).

Section 12(6) of the IAA provides for the granting of leave for enforcement of “all orders or directions made or given by an arbitral tribunal in the course of an arbitration” in Singapore as if they were orders made by a court in Singapore.

As Judge Hri Kumar Nair noted at the onset of the decision, the issue before the Singapore High Court “initially appeared straightforward” but “there was a surprising dearth of authority” and “upon closer examination, it presented interesting questions on the nature of enforcing a domestic interim measure, the relevance of the [forum non conveniens (FNC)] doctrine, and what it means for it to be appropriate for the court to hear this action.”

BACKGROUND

In the SIAC arbitration, the claimants pursued a claim against the defendants for minority oppression under Section 216 of the Companies Act 1967 and sought a buyout of their shares in the defendant company, CXK, a financial technology company incorporated in Singapore which runs an e-wallet open-loop payment method. Therein, the claimants applied to the arbitral tribunal for interim relief, seeking to restrain the defendants from operating an allegedly competitive product: an e-wallet, PXH, used as a closed-loop payment solution which is only available to users of a particular app in Malaysia.

While the claimants did not obtain the reliefs sought, the arbitral tribunal gave various directions that the defendants were required to complete within 90 days from the date of the interim order. The defendants complied with all the arbitral tribunal’s directions save for one, which was to rename PXH. The claimants thus commenced the Leave Application.

In pursuing the Stay Application, the defendants argued that pursuant to Order 6 r 12(4)(b) of the Rules of Court 2021 (ROC 2021), the court should not exercise its jurisdiction to hear the Leave Application because it was not appropriate for it to do so. In determining whether it was “appropriate” for the court to exercise its jurisdiction, the defendants argued that the Court should apply FNC principles and in so doing, the Spiliada connecting factors pointed to Malaysia as the more appropriate forum to enforce the interim order.

SUMMARY OF THE JUDGE’S DECISION AND KEY HOLDINGS

Judge Hri Kumar Nair dismissed the Stay Application, holding that FNC considerations do not apply in determining whether the court is the appropriate court to hear the Leave Application. A summary of the judge’s analysis and key holdings are discussed below.

As a starting point of the analysis as to whether the Singapore High Court is the appropriate court to hear the Leave Application, the judge held the following:

[B]y virtue of the parties’ choice of Singapore as the arbitral seat, it would ordinarily be appropriate for the Singapore courts to hear an application made pursuant to our curial law. By agreeing to a Singapore-seated arbitration, the parties have accepted that the IAA governs the arbitration, and the claimant would be entitled to apply under s 12(6) of the IAA to this court to enforce domestic interim measures. Hence, the Singapore courts would prima facie be an appropriate forum to hear the Leave Application. It was therefore incumbent on the defendants to show why FNC principles should additionally feature in this assessment of the appropriate forum.

The judge examined the background and context of Section 12(6) of the IAA, opining that

the threshold to obtain the court’s permission must necessarily be a low one:

(a) as stated above, it was envisaged that the obtaining of the court’s permission under s 12(6) would be “administrative”;

(b) an interim measure, by definition, does not determine the merits of the dispute between the parties but seeks to preserve the parties’ rights pending the final determination of the dispute by the tribunal;

(c) the clear policy and intent of the IAA is for minimal curial intervention, and for the court to assist arbitral proceedings, which includes the enforcement of interim measures, directions and, ultimately, awards;

(d) the court is not concerned with the merits of the interim measure; indeed, unlike the case of an award, the IAA does not give the court power to even set aside or review interim measures made by the arbitral tribunal; and

(e) as previously observed, the court should eschew any principle or approach which risks delay or allows tactical attempts to obstruct the arbitration process [citing Lee Seiu Kin’s decision in PT Pukuafu Indah and others v Newmont Indonesia Ltd and another [2012] 4 SLR 1157 (Pukuafu) at [25]].

The defendants argued, among other things, that (1) the powers that are exclusive to a supervisory court are listed at Art 6 of the Model Law, which does not include the enforcement of a domestic interim measure, and accordingly, Singapore being the seat court did not by that fact mean that the Singapore High Court is the appropriate enforcement court; and (2) Art 17(I) of the 2006 Model Law provides instances where the recognition or enforcement of an interim measure may be refused, and while it is not part of Singapore law, it represents “international consensus,” which is persuasive.

The judge rejected the defendant’s arguments for the following reasons:

• Regarding Art 6 of the Model Law, the provision “was meant to allow the legislature of a State to designate the relevant court which would perform the functions referred to in the specified articles” and by its title “certain functions of arbitration assistance and supervision’ indicates that the provision was not meant to exhaustively list the supervisory powers of the national courts.”
  • Notably, the judge clarified that the Singapore High Court’s power to enforce domestic interim measures does not form part of its supervisory jurisdiction, as it was not a power that was unique to the courts of the seat which they possess for the purpose of supervising the arbitral proceedings, an example of which would be challenge against the jurisdiction of the arbitral tribunal under Section 10 of the IAA (citing the Singapore Court of Appeal decision of Westbridge Ventures II Investment Holdings v Anupam Mittal [2021] SGHC 244 (Westbridge) at [73]).
  • Further, this clarification was also the basis for the judge’s rejection of the claimant’s reliance on the UK Supreme Court’s decision in Enka Insaat Ve Sanayi AS v OOO Insurance Company Chubb and others [2020] UKSC 38 for the proposition that FNC principles are not relevant to the court’s exercise of jurisdiction over an application to enforce a local interim measure. The reasoning for this was that he considered the Enka decision as being concerned with the supervisory jurisdiction of the courts and was therefore “not strictly on point in this case”.
• In relation to the 2006 Model Law, the judge “declined to adopt Art 17I as authoritative,” holding that “it is for Parliament to amend the IAA to adopt the 2006 Model Law or Art 17I if it sees fit.” In any event, the judge held that Art 17(I) of the 2006 Model Law does not assist the defendants, as “it does not provide for the refusal of enforcement, much less to decline the exercise of jurisdiction over an application to enforce, on FNC principles.”

In reaching his decision that FNC principles are irrelevant to the assessment of whether the Singapore High Court is the appropriate forum to hear the Leave Application, the judge considered the following:

• The nature and purpose of a FNC inquiry is “simply ill-suited to applications for the enforcement of domestic interim measures.” The purpose of the FNC analysis is to identify the most appropriate forum (i.e., the proper forum) to hear the substantive dispute which explains the focus on factors connecting the substantive dispute to a particular jurisdiction, such as the availability of witnesses and evidence. On the contrary, where the enforcement of domestic interim measures is concerned, the court is not concerned with adjudicating the substantive merits of the dispute or the interim measure itself. Even if it may be more appropriate, or even more effective, to enforce the interim order in Malaysia or some other jurisdiction, it does not mean that Singapore is not an appropriate forum to hear the Leave Application. The fact that the courts of one forum may also enforce such an order does not impact the appropriateness of the courts of another forum.
• The application of FNC principles contradict party autonomy and certainty:
  • In terms of party autonomy, “the chosen seat may have little or even no connection with the parties or the dispute.” The parties’ choice “may turn on, or reflect the parties’ confidence in the legal infrastructure of the seat, the national curial law and willingness of the courts to support and facilitate the arbitration.” “[T]he lack of connecting factors to, and the neutrality of, the seat may be the precise reason why the parties chose that very seat.” (citing Westbridge at [92])
  • The complication and unpredictability of the application of FNC would result in the “appropriate jurisdiction” being unclear and this presents “ample opportunity for a respondent to engage in delay and tactical attempts to obstruct the arbitration process, which is the very mischief s 12(6) seeks to avoid” (citing Pukuafu at [25]);
• Parliament could not have intended that the Singapore High Court’s discretion to refuse enforcement of domestic interim measures would be wider than that for a foreign interim measure. This stems from the following analysis:
  • Under Sections 31(2) and 31(4) of the IAA, the grounds for refusal of enforcement of foreign awards (which includes an interim measure) mostly relate to procedural and jurisdictional objections to the arbitral proceedings and there is no reference to FNC considerations.
  • Parliament did not see fit to prescribe any grounds to refuse enforcement of domestic interim measures.
  • Singapore-seated international arbitrations are subject to the curial jurisdiction of the Singapore courts and the accompanying supervision which the Singapore courts are empowered to impose on such arbitrations pursuant to the IAA. In contrast, foreign-seated international arbitrations are not subject to the supervision of the Singapore courts at all. Given this, it is reasonable to expect that the statutory position toward the enforcement of foreign interim measures would be more restrictive than that toward the enforcement of domestic interim measures.

POTENTIAL LIMITATIONS TO THE SINGAPORE COURT’S EXERCISE OF DISCRETION UNDER SECTION 12(6) IAA

While the Leave Application was not before Judge Hri Kumar Nair in this instance, he noted that there is “a dearth of both statutory and judicial guidance on this issue” and thus, in obiter, set out his brief observations on the possible limitations to the court’s exercise of its discretion to grant permission to enforce under Section 12(6) of the IAA.

The judge opined that “[g]iven Parliament’s exclusion of the s 12(6) regime from the setting aside and refusal of enforcement mechanisms under the IAA […], the bar for the court to refuse to grant permission to enforce a domestic interim measure must necessarily be a high one.” The possible limits suggested by the judge are as follows:

• The granting of the interim measure would have been in excess of the court’s powers.
• The enforcement of the interim measure would be against public policy.
• The enforcement application is brought in abuse of process, which the court always has the inherent power to control.

KEY TAKEAWAYS

This is a useful clarification under Singapore law where it is now clear that a party seeking to enforce interim measures granted in Singapore seated arbitrations under the IAA does not need to be concerned about the existence of a more/most appropriate forum.

The emphasis on upholding party autonomy and certainty within the framework of Singapore’s arbitration law is also welcomed, as it gives parties who are looking to designate Singapore as the seat of arbitration the confidence to do so.