Arbitration institutions like the SIAC will usually have, under their rules, considerable powers to make administrative decisions for the purpose of administering arbitrations e.g. the extension or abbreviation of time limits; whether a dispute warrants the appointment of three arbitrators instead of one; the fees and deposit payable by parties; and the arbitral tribunal’s fees and expenses. In this case the Singapore High Court addressed two related issues; whether the arbitration institution can revisit and change its administrative decisions, and the remedy available to a party who disagrees with a decision.
The Facts
Between 2017 and 2018, the parties entered into 4 Sale Contracts for the sale of oil products by the defendant to the claimant. On 25 December 2017, they entered into an Extension Contract extending the deadline for payment under one of the Sale Contracts. Disputes arose between the parties and on 24 June 2024 the defendant filed a Notice of Arbitration (“NOA”) with the SIAC. The SIAC wrote to the defendant seeking to clarify the agreements that were being referred to arbitration, The defendant replied stating that it was the 4 Sale Contracts and the Extension Contract.
On 9th July 2024, the SIAC issued a letter stating that the Registrar deemed the arbitrations to have commenced on 3 July 2024 pursuant to Rule 3.3 of the SIAC Rules[1]. On 22 July 2024, the claimant filed its response to the NOA, where it asserted that the defendant’s claims were time-barred because the arbitrations commenced on 3 July 2024 were more than 6 years after the date when the sums allegedly became due.
The following day, the defendant wrote to the SIAC, requesting the Registrar to “correct” the commencement date of the arbitrations to 24 June 2024 as the NOA filed on 24 June 2024 had fully, or at least substantially, complied with the SIAC Rules. The claimant objected to the defendant’s request. The parties made submissions to the Registrar on the issue of the commencement date.
On 30 July 2024, the SIAC issued a letter stating that it had revised the commencement date to 24 June 2024 (the “30 July Decision”).
The claimant then filed an application against the SIAC and the defendant, seeking, inter alia declarations:
- that the commencement date of the Arbitrations was 3 July 2024;
- that the 30 July decision was unlawful as it was ultra vires the SIAC Rules;
- that the 30 July Decision was in breach of the SIAC Rules.
Claimant’s Submissions
The claimant submitted that there was a contractual relationship between the parties and the SIAC, and that SIAC was contractually obliged to follow the SIAC Rules, in particular Rules 3.3 and 40.1;
3.3 The date of receipt of the complete Notice of Arbitration by the Registrar shall be deemed to be the date of commencement of the arbitration. For the avoidance of doubt, the Notice of Arbitration is deemed to be complete when all the requirements of Rule 3.1 and Rule 6.1(b) (if applicable) are fulfilled or when the Registrar determines that there has been substantial compliance with such requirements. SIAC shall notify the parties of the commencement of the arbitration.
40.1 Except as provided in these Rules, the decisions of the President, the Court and the Registrar with respect to all matters relating to an arbitration shall be conclusive and binding upon the parties and the Tribunal. The President, the Court and the Registrar shall not be required to provide reasons for such decisions, unless the Court determines otherwise or as may be provided in these Rules. The parties agree that the discussions and deliberations of the Court are confidential. (emphasis added)
The claimant argued that the Registrar had acted wrongfully in revising the commencement date as inter alia Rule 40.1 applied to make the 9 July Decision “conclusive and binding”, such that the Registrar had no power, to review his original decision or substitute it with the 30 July Decision. The Registrar therefore acted in breach of the SIAC Rules in issuing the 30 July Decision.
The Decision
The Court accepted the proposition that there was a contractual relationship between the parties and SIAC, and that SIAC was contractually bound to comply with the SIAC Rules when administrating the arbitrations. But this meant that SIAC could also rely on Rule 40.2 of the SIAC Rules:
40.2 Save in respect of Rule 16.1 and Rule 28.1, the parties waive any right of appeal or review in respect of any decisions of the President, the Court and the Registrar to any State court or other judicial authority.
The court ruled that the Registrar’s decisions are only “conclusive and binding upon the parties and the Tribunal” but it does not expressly prohibit the Registrar from reviewing or reconsidering his own decisions. The phrase “conclusive and binding” did not assist the claimant since such a decision could still be subject to reconsideration or revision.
The court reasoned that when the Registrar determines the commencement date of an arbitration, he is making an administrative decision, i.e. a decision made in the course of and for the purpose of facilitating the SIAC’s function of administering arbitrations.
The court then ruled that administrative decisions can be reconsidered. As authority for this proposition the learned judge relied on an observation by the Singapore Court of Appeal in Rex International v Gulf Hibiscus[2], that where a court makes orders to manage its own internal processes, it is an administrative order and thus the court does not become functus officio.
Further, a power to reconsider an administrative decision could be implied based on necessity[3]. Since Rule 40.2 precluded parties from challenging the Registrar’s decisions elsewhere, this meant that such a power was necessary. It would be absurd if the Registrar had made an error, he is then precluded from changing his mind. Similarly procedural orders are not final and maybe reconsidered and revised[4].
Since a court or a tribunal can determine their own internal procedures, and are entitled to reconsider administrative or procedural decisions, there is no reason why an arbitral institution is not entitled to do the same.
Although the court found in the instant case that there was no merit in the claimant’s challenge of the Registrar’s 30 July decision, it did suggest that there was still a potential avenue of redress open to the claimant. Although Rule 3.3 confers on the Registrar a discretion to determine when all the relevant requirements under the SIAC Rules have been substantially complied with, the Registrar must exercise that power in a lawful manner and in accordance with the SIAC Rules.
Accordingly, the claimant may ultimately be able to apply to set aside an unfavourable award pursuant to Article 34(2)(a)(iv) of the UNCITRAL Model Law on International Commercial Arbitration, which has the force of law in Singapore. Article 34(2)(a)(iv) provides that an award may be set aside if “… the arbitral procedure was not in accordance with the agreement of the parties,…”.
The Registrar’s determination of the commencement date of the arbitrations is arguably part of the arbitral procedure, and if the Registrar’s reconsideration could be argued to be a breach of the said SIAC Rules, it could be further argued that it amounted to a breach of the parties’ agreement for the arbitrations to be conducted in accordance with the SIAC Rules.
But given the court’s ruling on the Registrar’s power to revisit his administrative decisions, whether such an application will succeed on its merits is a separate matter.
Conclusion
The Court dismissed the claimant’s application with costs to be paid on an indemnity basis, since he found that the application was an abuse of process as it was made in breach of agreement between the parties.
The take aways from this case are:
- The legal relationship between an arbitration institution and parties is a contractual one, and the institution was obliged to comply with its rules when administrating arbitrations.
- The administrative and procedural decisions that the institution and tribunal make are not final and can be revised.
- However, decisions which are in breach of the relevant rules may be a basis to challenge the final award.
For further information contact:
S Suressh
Partner & Head, International Arbitration
Suressh@harryelias.com
+65 6361 9883
Andy Lem
Partner & Co-Head, Civil and Commercial Litigation
AndyLem@harryelias.com
+65 6361 9340
[1] References to the SIAC Rules are to the Arbitration Rules of the 2016 Singapore International Arbitration Centre
[2] [2019] 2 SLR 682 at [16]
[3] Sloan v Minister for Immigration [1992] 28 ALD 480 at 486
[4] Republic of India v Vedanta Resources [2021] 2 SLR 354 at [51]