At the opening of the legal year in January 2013, the Chief Justice of Singapore announced a committee to consider the feasibility of establishing a Singapore International Commercial Court (“SICC”). This committee, comprising judges, in-house counsel and practitioners from Singapore and other common law jurisdictions, recently released its recommendations on establishing the SICC (its report is available here).
It is suggested that the SICC, which will be governed by a bespoke set of rules tailored to international commercial litigation, will hear cases governed by both Singapore and foreign law, with the SICC’s panel of judges including eminent international judges. In relation to questions of foreign law, it is noteworthy that SICC judges will be able to take judicial notice of foreign law with the assistance of submissions. In other words, foreign law need not be pleaded and proved as fact. This is in line with the practice in international arbitration.
Also of particular interest is the proposal to allow foreign counsel to appear in proceedings where the case has no substantial connection to Singapore. This recommendation – if implemented – would represent a significant liberalisation of the current rules as it would allow foreign law firms in Singapore to provide litigation services to international clients for the first time.
The Singapore Government has stated that it welcomes the Committee’s recommendations, which aim to build on the success of the Singapore International Arbitration Centre, by increasing the range of dispute resolution options in Singapore open to international parties. The Government has announced a consultation period on the committee’s report, with interested parties able to submit responses until 31 January 2014.
We will provide an update on further developments once the Government provides its response.
In Zim Integrated Shipping Services Limited v European Container KS and European Container KS 11  EWHC 3581 (Comm), the High Court considered whether to exercise its discretion to grant interim relief under s44(3) of the Arbitration Act 1996 (the Act). Section 44(3) empowers the Court in cases of urgency to make an order for interim relief for the purpose of preserving evidence or assets.
Zim Integrated Shipping Services Limited (Zim), the claimants in an arbitration, had made a without notice application to the Court for an order under s44(3) of the Act and/or s37 of the Senior Courts Act 1981 to preserve the contractual right to the repayment of loans by the Respondents; and the contractual right to deduct from charter hire payable to the Respondents by Zim under certain charterparties. The existence of these rights was the subject of the arbitral proceedings between the parties. The effect of the order sought by Zim would have been to secure the outstanding loan amounts.
Zim’s application was unsuccessful. The Court’s decision focused on s44(3) of the Act, as it was clear that s37 of the Senior Courts Act could not be used to circumvent the limitations contained in s44(3). In declining to make an order, the Court noted that s44(3) was a limiting provision which could only be used for the purposes of preserving assets or evidence, and could not be used to make any kind of interim injunction. The Court questioned whether the rights Zim sought to preserve were within the scope of s44(3), although was prepared to assume, with some hesitation, that this was a case that fell within s44(3). However, in the exercise of its discretion, the Court refused to grant the injunction.
The Court highlighted that, the closer any injunction came to determining a matter which parties have agreed should be decided by an arbitral tribunal, the more wary it should be as a matter of discretion. In this case, the question of whether the claimants did have the contractual rights which they sought to preserve was the question which the tribunal had to decide.
Last month, the Lithuanian Supreme Court (the Supreme Court) made a preliminary reference to the Court of Justice of the European Union (CJEU) asking whether an EU member state court can refuse to recognise an arbitration award which restrains a party to the arbitration agreement from continuing proceedings in the courts of another member state (in essence, an anti-suit injunction). The Supreme Court considered that the enforcement of such an award may be contrary to the Brussels I Regulation in light of the reasoning in West Tankers.
The reference has been made to the CJEU under the current Brussels I Regulation but, given the likely proximity of the decision with the entering into force of the revised Brussels I Regulation (Regulation (EU) No. 1215/2012) (the Revised Regulation) on 10 January 2015, it is expected that the CJEU will give consideration to the language of the Revised Regulation in making its decision.
It is hoped that the CJEU’s decision will provide some guidance on the balance to be struck between (i) the rights of member state courts under the Brussels regime to rule on their own jurisdiction and enforce judgments made in breach of an arbitration agreement and (ii) the application of the New York Convention and the enforcement of conflicting arbitral awards by those same courts. Even more interesting will be the CJEU’s interpretation of the award in question and its decision on whether its effect as an anti-suit injunction renders it unenforceable, particularly in light of the precedence of the New York Convention under the Revised Regulation (for our previous commentary on the Revised Regulation, see here).
On 1 November 2013, the South African Department of Trade and Industry (DTI) has released its new “Promotion and Protection of Investment” bill (PPI Bill) for public comment (for a copy of the PPI Bill, see here).
The PPI Bill follows South Africa’s publicised plans to review its bilateral investment treaties (BITs), in particular those entered into right after the end of the apartheid era. The majority of those BITs have been, or are in the process of being, terminated by the South African government. As part of the DTI review, the South African Government has already issued cancellation notices to various European countries, in respect of its BITs with, amongst others, Belgium, Luxembourg and Spain (to see our previous blog post on this, see here), and most recently, Germany and Switzerland. Existing investors are still entitled to rely on the protections found in those BITs that have been terminated and remain able to do so for a period between 10 to 20 years after the BITs termination, depending on the relevant BITs sunset clause.
The PPI Bill, when passed as law, is intended to regulate the protection of all investments in South Africa in place of BITs.
The following key provisions in the PPI Bill and their implications are discussed further below.
- Definition of an “investment”.
- Absence of a fair and equitable treatment (FET) provision.
- Definition of “expropriation” and new principles of compensation for expropriation.
- Dispute resolution mechanism.
On 6 November, Herbert Smith Freehills hosted the second HSF Young Arbitration Practitioner (YAP) music and drinks event, at its London offices in Exchange Square. The drinks event, set against a backdrop of live jazz music, was organised by London arbitration associates Susan Field, Jennifer Hartzler, Maguelonne de Brugiere and Emily Blanshard, following a successful inaugural event in 2012. The evening provided an opportunity for young arbitration practitioners from numerous arbitration practices, chambers and institutions to meet and network with their peers in a relaxed environment and to develop their existing contacts in the arbitration community.
The event is aimed at associates in private practice, barristers, academics and others under 40, engaged in arbitration work. Please contact YAP Music and Drinks to be added to the mailing list for future Herbert Smith Freehills YAP events.
+44 20 7466 2818
Jennifer HartzlerAssociate (New York)Email
+44 20 7466 7536
Maguelonne de BrugiereAssociateEmail
+44 20 7466 7488
+44 20 7466 2833
In The London Steam-Ship Owners’ Mutual Insurance Association Ltd v The Kingdom of Spain and the French State  EWHC 3188 (Comm), the High Court had to consider whether to exercise its discretion under section 66 of the English Arbitration Act 1996 (the Act) to permit enforcement of two arbitral awards giving declaratory relief to the protection and indemnity insurers (the Club) of the owners of a vessel that had sunk off the coast of Spain, causing a major oil spill. The arbitral awards made declarations limiting the liability of the Club in relation to claims brought by the Spanish and French States (the States) as a result of the oil spill. The application was made by the Club on an urgent basis, as it understood that a Spanish court would soon issue a judgment in respect of the same cause of action.
The States challenged the substantive jurisdiction of the tribunal that had rendered the two awards (the Tribunal) on the grounds that their rights of direct action against the Club were in essence independent rights under Spanish law, the claims were not arbitrable and (in relation to France’s claims only) waiver of the right to arbitrate by the Club. However, the Court dismissed all of the challenges, emphasising that the States’ claims were in substance claims under a contract of insurance between the Club and the owners of the vessel (the Contract) and that they fell within the scope of the arbitration clause in the Contract.
The States’ further contention that the English courts lacked jurisdiction over them in view of their state immunity under the English State Immunity Act 1978 (the SIA) was rejected by the Court. In bringing claims in relation to the Contract, the States had, for the purposes of the Act and the SIA, become parties to the Contract and the agreement in writing in the Contract to refer claims to arbitration. The States therefore came within one of the exceptions to state immunity in the SIA.
The Court held that the real prospect of establishing the primacy of the awards of the Tribunal over any inconsistent judgment which might be rendered in Spain meant that there was clear utility in granting the Club leave to enforce the awards as judgments under section 66 of the Act. It rejected the States’ arguments that exercise of its discretion to permit enforcement would be inappropriate as it would lead to a result not countenanced by EC Regulation No 44/2001 (the Brussels Regulation) or that the awards should not be enforced because of the importance of, and public interest in, the Spanish proceedings. The Court granted leave to enforce the awards as judgments of the Court to the same effect.
Friday 29 November 2013, 12.30 – 1.30pm UK time.
The long-running dispute between Astro, a Malaysian media giant, and Lippo, an Indonesian conglomerate, has reached the end of the latest heavily contested battle by Lippo against the enforcement of arbitral awards given in Astro’s favor.
In PT First Media TBK v Astro Nusantara International BV & others  SGCA 57, the Singapore Court of Appeal has considered the ability of a losing party (Lippo) to oppose enforcement of an arbitral award on grounds of lack of jurisdiction where the losing party had not taken the previous steps available to it to challenge the award on jurisdiction. The Court of Appeal also considered the circumstances in which non-signatories to an arbitration agreement can be joined into existing arbitration proceedings.
In Doosan Babcock Ltd v Commercializidora de Equipos y Materiales Mabe  EWHC 3010 (TCC), the High Court considered the scope of section 44(3) of the Arbitration Act 1996 (the Act). Section 44(3) empowers the courts in cases of urgency to make an order for interim relief for the purpose of preserving evidence or assets.
The Claimant had made an application for an interim injunction restraining the Respondent (known as MABE) from making demands for payment under two “on demand” performance guarantees, on the ground that MABE had failed to issue Taking-Over Certificates (the Certificates) as required by a contract between the parties. The guarantees were stated to expire upon the issuance of the Certificates.
The Claimant was successful in its application for injunctive relief. The Court held that it could make an order for the purpose of the preservation of a contractual right if the effect of the order was to preserve the value of the right and the case was one of urgency. The case also suggests that the usual threshold test for obtaining interim relief of demonstrating “a serious question to be tried” is a more difficult one to overcome in practice where the relief pertains to “on demand” bonds or guarantees, as the applicant must establish that it has a “strong case”.
In the case of Primera Maritime (Hellas) Limited and Others vs Jiangsu Eastern Heavy Industry Co Ltd and others, published on 15 October 2013, the London High Court issued a ruling rejecting a challenge against the decision of an arbitral tribunal. The arbitral award had been challenged under section 68(2)(d) of the Arbitration Act (the Act) before the High Court with the claimants alleging that the tribunal had failed to deal with all the issues put to it and that this failure amounted to serious irregularity. Rejecting the claim, the High Court provided guidance as to the components of a successful challenge to an arbitral award under section 68 of the Act, and noted that, as is well accepted, section 68 is “only to cover extreme cases where the tribunal has gone so wrong in its conduct of the arbitration that justice calls out for it to be corrected.”