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Legal Update: A stich in time saves ……. the arbitration agreement

Oct 29, 2024

The recent judgement by the General Division of the High Court of the Republic of Singapore, between STS Seatoshore Group Pte Ltd (“STS”) and Wansa Commodities Pte Ltd (“Wansa”)[1] provides significant insights into the enforcement of arbitration agreements and the issuance of anti-suit injunctions.

Key Facts

STS is a Singapore incorporated company in the business of freight and marine logistics. Wansa, also incorporated in Singapore, is involved in commodities trading, particularly in bauxite mined in Guinea.

Parties entered into an agreement in March 2023 (the “Agreement”) where Wansa engaged STS to provide transportation services for bauxite at the Alufer barge terminal in Guinea.  It was undisputed that the Agreement included an arbitration agreement, which stipulated that any disputes arising out of or in connection with the contract would be resolved through arbitration in Singapore in accordance with the Singapore Chamber of Maritime Arbitration (SCMA) terms[2].

The Proceedings

On 4 April 2024, Wansa applied to the Commercial Court of Conakry (CCC) for an injunction to inter alia compel STS to perform its obligations under the Agreement to load bauxite for shipment at the minimum loading rate of 25,000 tonnes of bauxite per day and was using its equipment for other companies. The CCC granted the injunction on 9 April 2024[3].

On 15 April 2024, STS filed its opposition to, and sought the revocation of, the 9th April Order[4].  STS argued that Wansa had inter alia failed to comply with the Agreement as it had not sought to resolve the dispute by amicable means, and that the low loading rates were due to operational inefficiencies attributable to Wansa[5].  On 30 April 2024, STS filed submissions where it argued for the first time that the CCC did not have jurisdiction to hear the dispute because parties had agreed to submit the dispute to arbitration[6] (the “Jurisdiction Argument”).  

On 23 May 2024, the CCC issued its judgement, finding that STS had raised the Jurisdiction Argument after it had presented arguments on the merits and that it was accordingly inadmissible due to tardiness under Guinean law[7].  The CCC also found that STS was liable for not meeting the minimum loading rates.  On 27 May STS appealed to the Conakry Court of Appeal (“CCA”) against this decision.  The appeal is pending[8].

Meanwhile, on 14 May 2024, STS commenced arbitration proceedings against Wansa, claiming breaches of the Agreement[9].  Wansa objected to the jurisdiction of the SCMA on the basis that it was the exact case pending before the Guinean courts, and that Wansa would not be participating in the arbitration[10].

Proceedings continued in Guinea where Wansa sought to enforce the reliefs it had obtained, and where STS actively participated, opposing Wansa, seeking stays of orders sought to stay  the orders and appeals from unfavourable rulings[11].

On 3 July 2024, STS commenced court proceedings in Singapore and sought anti-suit injunction against Wansa[12], and obtained an interim order on an ex parte basis on 9 July 2024[13].  

The Instant Case

The matter then came up for determination before the General Division of the High Court of Singapore, with STS seeking to make the anti-suit injunction permanent, and Wansa seeking to discharge the interim order.

The relevant case for each party was as follows.

STS’s case STS relied on principally on the fact that the proceedings brought by Wansa in Guinea were in breach of the arbitration agreement[14].

Wansa’s case Wansa’s main argument in opposing the grant on the anti-suit relief  was (1) the right to refer the matter to arbitration no longer remains as (a) STS had submitted to the jurisdiction of the Guinean courts; (b) STS had repudiated the arbitration agreement due to the positions that it had taken  in the Guinean proceedings; (c) STS had waived the right to arbitrate due to the positions it had taken in the Guinean proceedings; and (d) STS had delayed in applying for the anti-suit injunction and significant Guinean judicial resources had already been expended[15].

Findings of the Court

The High Court, presided over by Judicial Commissioner Kristy Tan, dismissed STS’s application and discharged the interim anti-suit injunction.  The court found that although there had been a breach of the arbitration agreement by Wansa, STS had unduly delayed its application for the anti-suit injunction, such that considerations of comity militate against it being granted[16].  

By the time STS filed its application, multiple sets of proceedings in Guinea had been heard, and multiple orders made[17].  The delay by STS in making its application had allowed the Guinean proceedings to progress to an advanced stage. STS should have applied to the Singapore court for anti-suit relief once Wansa had commenced proceedings in Guinea.  There was no legal necessity for STS to commence an arbitration before applying for anti-suit relief.[18]  While STS was entitled to contest the jurisdiction of the Guinean courts, it should have simultaneously sought anti-suit relief from the Singapore courts[19]

In making these findings, the High Court applied the principles from the Singapore Court of Appeal decision in Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd[20]namely:

  1. The granting of anti-suit relief must be exercised with caution[21]
  2. Comity considerations are relevant when there is a delay in applying for anti-suit relief, even if there was a breach of an arbitration agreement[22]
  3. The extent to which the delay had allowed the foreign proceedings to advance, the stronger the consideration of comity would be[23]
  4. Delay cannot be justified on the basis that jurisdictional objections were being raised in the foreign court[24]
  5. After the foreign court has already issued a judgement, an anti-suit injunction that sought to enjoin a party from relying on or enforcing that foreign judgment would generally be refused[25]
  6. The recognised exceptions warranting the court granting an injunction in such a situation were cases of fraud, and cases where the applicant had no knowledge that the foreign judgement was being sought until after it was rendered[26].

Conclusion

This judgement underscores the importance of parties who wish to enforce an arbitration agreement to do so expeditiously.  Any delay is likely to prove fatal.  It also serves as a reminder that although the Singapore courts are generally supportive of arbitrations, they are also respectful and give due deference to foreign court proceedings and comity, and do not allow parties to have a second bite of the cherry if they attempt to litigate a matter in a foreign court that has proven to be unsuccessful.

For more information, please contact:

S Suressh

Partner & Co-Head, International Arbitration

Suressh@harryelias.com

+65 6361 9883

Louise Lin

Associate

LouiseLin@harryelias.com

+65 6361 9365


[1] [2024] SGHC 266

[2] Ibid [10] and [12]

[3] Ibid [14] and [16]

[4] Ibid [17]

[5] Ibid [17] and [19]

[6] Ibid [19(a)]

[7] Ibid [21]

[8] Ibid [22]

[9] Ibid [37] – [38]

[10] Ibid [40]

[11] The court helpfully summarised the various proceedings in a table at [66].  As Wansa pointed out in its submissions, there were 14 judgments in 6 main cases and at least 30 hearings.

[12] Ibid [2], [3] and [57]

[13] Ibid [3] and [59]

[14] Ibid [67] – [71]

[15] Ibid [72] – [74]

[16] Ibid [76]

[17] Ibid [78]

[18] Ibid [83] – [84]

[19] Ibid [85].

[20] [2019] 1 SLR 732

[21] Ibid [69]

[22] Ibid [81] and [114(a)]

[23] Ibid [82] – [83]

[24] Ibid [84]

[25] Ibid [89] and [114(c)]

[26] Ibid [114(d)]

For more information, please contact
our Business Development Director, Ricky
Soetikno, at rickysoetikno@harryelias.com.