Singapore High Court Dismisses Yet Another Set Aside Application

The Singapore High Court decision of Swire Shipping Pte Ltd v Ace Exim Pte Ltd [2024] SGHC 211 concerned a setting aside application resulting from a shipping dispute in a Singapore arbitration that was conducted under the Rules of the Singapore Chamber of Maritime Arbitration.

The arguments brought forward by Swire in the Singapore High Court centred around allegations concerned with the tribunal’s treatment of evidence and submissions. Swire applied to set aside the final award under Sec. 24b of the Singapore International Arbitration Act. This section provides limited grounds for setting an award aside if “a breach of the rules of natural justice occurred in connection with the making of the award by which the rights of any party have been prejudiced”. Swire argued that the arbitrator had made two findings in breach of natural justice, which led to the arbitrator making findings that Swire had no notice of.

The Court, in dismissing Swire’s application, emphasized the principle of “minimal curial intervention” in arbitral awards, arising from the fact that the parties have, in choosing arbitration, “made a considered and informed choice in their contracts to limit the role of the courts when it comes to resolving their disputes”.

The court reached this conclusion despite issues with the way in which the award was rendered. As the court put it, the award was “structured as a labyrinth for the reader to navigate through and conquer, requiring the utmost willpower and concentration just to try to understand the Arbitrator’s reasoning.”

Throughout the judgment, the court critically characterised Swire’s arguments as “nothing more than a substantive appeal against the merits dressed up as a jurisdictional objection and/or due process violation.”

Ultimately, it was held that the mere fact that a tribunal “does not answer an issue submitted to it letter-for-letter but answers it in a different way based on evidence that is before it” did not mean that it acted in excess of jurisdiction.

The Court noted that Swire’s submission amounted to an argument that any finding by the arbitrator other than one accepting Swire’s position would be exceeding his jurisdiction, was a “plainly absurd suggestion”.

The court reminded parties that by agreeing to resolve their disputes by arbitration they accepted that a “duly rendered arbitral award would bind the parties on a good day – where they like the outcome – as much as a bad day – where they do not.”

Moreover, the court highlighted the phenomenon of “due process paranoia." Such a term refers to “the tendency of arbitral tribunals to act defensively in their procedural decisions and general conduct of the arbitration, borne out of a concern that exhibiting robustness may be subsequently challenged as a violation of a party’s due process rights.” The Court noted that an award which has as its "predominant aim to avoid being set aside" and thereby covering "every blade of grass" in terms of witness evidence, and issues and arguments raised, may result in an award that is "very difficult to read and understand", a "labyrinthine tome that would test even the most stout-hearted".

Not only does this case reiterate the high bar to set aside arbitral awards in Singapore. In addition, arbitration practitioners will find this judgment very useful as it summarizes most key principles and precedents in Singapore's jurisprudence relevant to setting aside applications.