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Court of Appeal sets aside parts of arbitral awards which were made in excess of jurisdiction

In CBX and anor v CBZ and ors [2021] SGCA(I) 3, the Singapore Court of Appeal recently set aside the Tribunal’s awards on grounds of breach of natural justice and that the Tribunal had exceeded its jurisdiction.

We have previously reported the High Court case here - To recapitulate, the application to set aside was made on the grounds that the Tribunal had exceeded its jurisdiction and/or failed to afford the buyers a reasonable opportunity to present their case in relation to whether they were obliged to pay the Remaining Sum, and that the awards contravened Singapore’s public policy. The application was dismissed by the High Court. The buyers subsequently appealed.

The Court of Appeal’s (“COA”) Judgment
The COA allowed the appeal. It held that in relation to the Remaining Sum, while the arbitration clauses in the SPAs had provided that “the Terms of Reference shall not include a list of issues to be determined”, such Terms of Reference were subject to Article 23(4) of the ICC Rules, which clearly contemplated “express consideration and determination” by the Tribunal of whether a new claim should be permitted.

In this regard, the Tribunal had failed to determine whether the sellers should be permitted to pursue any claim to the Remaining Sum and had ignored the Buyer’s objections in their post-hearing briefs to the Tribunal taking jurisdiction over this dispute.

As for the Compound Interest Order, the COA opined that they too would have been set aside because the parties had agreed that as a question of Thai law, compounding was unenforceable. Further, as the parties’ agreement had restricted the scope of the matters which they needed and agreed to submit to the decision of the Tribunal, the award in relation to the Compound Interest Order, which were contrary to the parties’ agreement, were made in excess of jurisdiction.

Besides falling outside the scope of the submission to arbitration, the Tribunal’s decision on the Remaining Sum and the Compound Interest Order involved breaches of the rules of natural justice, as the parties were not afforded sufficient opportunity to present their case. This warrants the decisions to be set aside under section 24(b) of Singapore’s International Arbitration Act.

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