The Singapore International Commercial Court (“SICC”) dismissed an application to set aside an arbitral award conducted under the auspices of the Singapore International Arbitration Centre in the recent case of Twarit Consultancy Services Pte Ltd and anor v GPE (India) ltd and ors  SGHC(I) 17
The Applicants and Respondents entered into Share Purchase Agreements (“SPAs”) for the sale of the Respondents’ shares to the Applicants. Concurrently, the parties executed a “First Letter Agreement” which inter alia provided that if the Applicants failed to make payment under the SPAs, certain of the Respondents’ rights under the original Subscription and Shareholders Agreements (“SSHAs”) would be reinstated, and the Applicants would need to pay the Respondents sums provided for in the First Letter Agreement. The Respondents commenced SIAC arbitration proceedings, claiming damages under the SPAs and the First Letter Agreement when the Applicants failed to make full payment to the Respondents. The Tribunal found in favour of the Respondents.
Before the SICC, the Applicants argued that:
1. Since the Respondents’ rights under the SSHAs were “revived” upon the breach of SPAs, the parties’ dispute fell under the SSHAs and not the SPAs or First Letter Agreement.
2. The transactions under the relevant contracts were illegal under Indian law, thus the issue is non-arbitrable.
3. The Tribunal’s refusal of the Applicants’ applications for an adjournment of the final evidentiary hearing; and the exclusion of the evidence of the Respondents’ Indian law expert, were in breach of natural justice.
4. The Tribunal’s award of damages was in breach of natural justice as the point had not been argued before the Tribunal.
The SICC dismissed the Applicants’ setting aside application in its entirety on the following grounds:
1. Excess of Jurisdiction: The SICC found that the Respondents’ claim for damages for breach of the SPAs, squarely fell within the scope of the arbitration clauses in the SPAs and the First Letter Agreement.
2. Non-arbitrability of the claims: The illegality argument was rejected by the SICC. The Court held that such disputes, insofar as they related to the contractual liability of parties under a civil contract, were capable of arbitration.
3. Breach of natural justice: It was held that what the tribunal did fell “within the range of what a reasonable and fair-minded tribunal in those circumstances might have done” and there was no prejudice to the Applicants in the conduct of their case. The issue of damages was also part of the pleadings, evidence and submissions in the arbitration proceedings. Therefore, the Tribunal had considered and determined the claim as presented to it; whether or not the Tribunal was correct in that determination was not in issue in this setting aside application.
This case illustrates those arguments on scope, arbitrability and natural justice will be strictly scrutinised against disgruntled parties attempting a “back-door” appeal.