Singapore International Commercial Court upholds arbitration award and dismisses claim for breach of natural law

The case FIC Properties Sdn Bhd v PT Rajawali Capital International (“Rajawali”) involved a share purchase agreement between Rajawali and FIC Properties. Rajawali sold a 37% stake in PT Eagle High Plantations to FIC. Under the terms of the call option in the agreement, FIC was allowed to resell the shares. While the exercise of the buy-back option was invalidated in the first arbitration, it was upheld in the second arbitration. Rajawali then moved to set aside that award in the current proceeding. 

Rajawali alleged that FIC committed fraud by failing to disclose a lien on the shares. In addition, Rajawali alleged that the enforcement of the award violated Indonesian law. Finally, Rajawali argued that the Arbitral Tribunal violated natural justice by failing to consider all the issues raised. The Commercial Court disagreed. The court found that the pledge was well known and had already been communicated, and it found no evidence of fraud or intent to deceive on the part of FIC. In addition, the court rejected the claim of illegality, ruling that the award did not require illegal conduct. With respect to natural justice, the tribunal rejected the Rajawali entities' claims, concluding that the tribunal had considered all relevant arguments. As a result, the motions to set aside the award were denied and FIC was ordered to pay costs.

The decision underscores the difficulty of overturning an arbitral award. This is consistent with the primary objective of arbitration agreements, which is to provide a fast and final decision.