Introduction
The case of Aastar Trading Pte Ltd v Olam Global Agri Pte Ltd[1], decided by the General Division of the High Court of Singapore, analyses the legal principles concerning the enforcement of foreign arbitral awards and the interplay between enforcement of the award at a different jurisdiction from the seat of the arbitration and setting aside proceedings at the seat court.
The case revolves around the enforcement of an arbitral award issued under the auspices of The Palm Oil Refiners Association of Malaysia (“PORAM”) and a subsequent application to set aside the award in Malaysia.
This case note summarises the facts of the case and highlights the key legal principles and the court’s reasoning in granting an adjournment of the enforcement proceedings in Singapore.
Background
Aastar Trading Pte Ltd (“Aastar”) and Olam Global Agri Pte Ltd (“Olam”) entered sales contracts for the sale of Indonesian Refined, Bleached, and Deodorised Palm Olein.[2] Disputes arose between them regarding the performance of these contracts, leading to arbitration under the PORAM Rules of Arbitration and Appeal (the “PORAM Rules”) in Malaysia.[3]
The dispute In brief terms, Olam gave notice to Aastar of the arrival date of the vessel at the contracted load port and for Aastar to have the contracted cargo ready for loading on 2 July 2022. However, Aastar did not have the cargo ready for loading. On 7 July 2022, Aastar declared the cargo ready for loading, however the vessel was already departing as its owners had formed the view that the cargo was not ready.[4]
The arbitration Aastar subsequently commenced arbitration against Olam for breach of the sales contact. Olam’s defence was that Aastar did not have the cargo ready for loading during the delivery period and Aastar’s assertion of cargo readiness on 7 July 2022 was false.[5]
The tribunal made its award on 27 September 2023 in favour of Aastar for about US$18.5 million.[6]
The appeal Pursuant to the PORAM Rules, Olam appealed the decision inter alia on the basis that the tribunal had erred as Aastar did not have the cargo ready for loading at the load port during the delivery period, and that Aastar had adduced no evidence showing that there was any cargo ready to load on 7 July 2025.[7]
Aastar adduced new evidence in the form of four letters purportedly from Aastar’s suppliers stating various amounts of cargo was ready on dates 30 June to 6 July (the “Letters”).[8] Olam disputed the authenticity of the Letters, relying inter alia on the evidence of its independent surveyor that the cargo was not ready at the load port.[9]
An arbitrator at the appeal hearing commented:
“I think basically the comment is we are not investigative, right? All documents that are presented to us, we take as genuine, and we accept. We can’t investigate to see what is wrong. On face value we take all the documents. We of course make our own judgement. I think this is a close hearing, so the issues of fraud, I think its best that its kept here [sic]. Because here we are trying to settle a dispute.”[10]
On 8 August 2024, the Final Appeal Award (“FA Award”) was issued. The Majority found in Aastar’s favour. The Majority was silent on the issue of the authenticity of the Letters.[11] The dissenting member of the Appeal Board opined that the crux of the dispute was cargo readiness, the Letters had not been disclosed contemporaneously despite its importance to this issue, and clearly conflicted with the evidence of the independent surveyor.[12] The Minority ruled in Olam’s favour.
Setting aside On 24 September 2024, Olam applied to the Malaysian High Court to set aside the FA Award on the following grounds:[13]
- The FA Award conflicted with Malaysian public policy as it was induced/ affected by fraud in the form of the forged Letters.[14]
- FA Award conflicted with Malaysian public policy in that the Appeal board breached natural justice when it did not consider and/or determine and/or wrongly disregarded the important issue inter alia of the authenticity of the Letters.[15]
- The FA Award did not deal with the material issue of the authenticity of the Letters.[16]
- The Appeal Board did not act in accordance with the agreed procedure by failing to deal with the issue of authenticity of the Letters.[17]
- The arbitral procedure was not in accordance with the parties’ agreement in that the Appeal Board failed to make a reasoned award and failed to treat each party equally by reason of its failure to deal with Olam’s issue on the authenticity of the Letters.[18]
On 5 September 2024 Aastar applied to the High Court in Singapore for leave to enforce the FA Award against Olam.[19] Olam applied to adjourn of the enforcement proceedings pending the outcome of its setting aside application.[20]
The decision The High Court granted Olam’s application and granted the adjournment.[21] In arriving at its decision, the learned judge identified the following non exhaustive factors which the court should consider in exercising its discretion as to whether or not it should exercise its discretion in granting the adjournment.
- The enforcement court will consider whether the setting aside application before the seat court is brought bona fide and not as a delaying tactic.[22]
- The enforcement court will consider the strength of the merits of the setting aside application before the seat court. This is not a detailed assessment but rather a preliminary evaluation, just to say whether it is seriously arguable.[23]
- Whether an adjournment will render it more difficult to enforce the award, e.g. because the award debtor’s dissipation of assets or impoverishment.[24]
- The likely length of the adjournment and whether the delay in enforcement will prejudice the award creditor.[25]
- International comity required deference to the seat court.[26]
In arriving at its decision, the High Court opined that:[27]
- Olam’s setting aside application was bona fide.
- The FA Award was neither manifestly valid nor manifestly invalid.
- There was no evidence that an adjournment would render enforcement more difficult.
- The delay was not unduly long.
- Comity consideration weighed in favour of an adjournment.
On the merits of the setting aside application, the learned judge did observe that the Majority’s silence in the FA Award sat uncomfortably against the comment during the hearing[28] and the dissenting opinion. It was suggestive of a failure by the Majority to consider and determine the issue. It was thus properly arguable the Majority had not applied their mind to the issue of authenticity.[29]
Conclusion
This case highlights the complex interplay between the enforcement of an arbitral award and the setting aside application at the seat court. The Singapore High Court’s decision to grant an adjournment of the enforcement proceedings serves as a reminder of the importance of procedural fairness in arbitration proceedings.
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[1] [2025] SGHC 5
[2] Ibid at [5].
[3] Ibid at [20].
[4] Ibid at [14].
[5] Ibid at [23].
[6] Ibid at [24].
[7] Ibid at [26] and [28].
[8] Ibid at [29].
[9] Ibid at [30].
[10] Ibid at [30].
[11] Ibid at [33].
[12] Ibid at [34].
[13] Ibid at [35].
[14] Ibid at [36].
[15] Ibid at [37].
[16] Ibid at [38].
[17] Ibid at [39].
[18] Ibid at [39].
[19] Ibid at [1].
[20] Ibid at [2].
[21] Ibid at [3].
[22] Ibid at [48].
[23] Ibid at [52] and [53].
[24] Ibid at [54].
[25] Ibid at [55].
[26] Ibid at [59].
[27] Ibid at [62].
[28] See para 10 above.
[29] Ibid at [71].