Singapore International Commercial Court confirms jurisdiction of  arbitral tribunal

In Frontier Holdings Ltd. (FHL) v. Petroleum Exploration (Pvt) Ltd (PEL), the International Commercial Court in Singapore found that the arbitration tribunal had wrongly declined its jurisdiction and must continue the proceedings. The court, according to the latest decision of the International Commercial Court, wrongly determined that it lacked jurisdiction over the dispute between Frontier Holdings Ltd. and Petroleum Exploration (Pvt) Ltd. The International Commercial Court in Singapore reached this conclusion by interpreting the Petroleum Concession Agreement (PCA), which underpinned the legal relationship between the two parties. In addition, the International Commercial Court referred to a Joint Operating Agreement (JoA) of the parties for its interpretation, which aimed to more closely define the rights and obligations of the parties.

The International Commercial Court reasoned its decision as follows: The tribunal erred in finding that it lacked jurisdiction to hear the dispute between FHL and PEL. This is because the PCAs and JOAs reveal the parties' intention that disputes between a Foreign Working Interest Owner ("FWIO") and a Pakistani Working Interest Owner ("PWIO") should be resolved outside Pakistan. The difficulty in this case was that arbitration under Art. 28.3 PKA was only ordered for disputes between THE PRESIDENT and Pakistani Working Interest Owners. In this case, however, the dispute was between a FWIO and PEL, a PWIO, so the tribunal had to determine whether they were also subject to arbitration. This was affirmed by the International Commercial Court by reference to the PCA and the JOA, which served as interpretative aids in this regard. The International Commercial Court found that the words "THE PRESIDENT" could be replaced by "a Pakistani working interest owner". The tribunal concluded from the fact that a corresponding intention to settle a dispute by arbitration is apparent from Art. 28 PCA and Art. 17 JOA. In particular, the words "mutatis mutandis" in Art. 17 JOA could be used to replace "THE PRESIDENT" with "a Pakistani working interest owner".