Singapore High Court Clarifies Fair Hearing Rules: Implicit Consideration of Party Arguments Sufficient

In DLV and another v DLX and others [2025] SGHC 29, the Singapore High Court dismissed an application to set aside an arbitral award under Section 24(b) of the International Arbitration Act 1994 (2020 Rev Ed) (IAA), ruling that the tribunal’s implicit consideration of the parties' arguments met the fair hearing requirement.

The dispute arose from a Share Acquisition & Shareholders' Agreement that included an exit clause obligating the company and promoters to arrange a secondary sale at the exit price. After the investors exercised their exit option and the sale failed, a dispute arose over the clause's interpretation. In arbitration, the tribunal ruled that the clause imposed an absolute obligation for a secondary sale at the exit price, found the investors had validly exercised their rights, and awarded damages equivalent to the exit price in exchange for the return of shares.

The promoters sought to annul the award, claiming the tribunal had failed to consider two defenses. Referring to ASG v ASH [2016] 5 SLR 54, the SGHC reaffirmed that a defense need not be explicitly addressed, and an implicit rejection suffices. The court found implicit consideration in this case.

Regarding the first defense, the tribunal rejected its factual basis, making an express ruling unnecessary. The promoters claimed that the investors had waived their right to a secondary sale by consenting to a split sale. However, the SGHC found that the tribunal had addressed this by explicitly determining that all parties intended to pursue a secondary sale under the contract and that any waiver required written form.

The promoters also argued that their buy-back defense had been overlooked, asserting that awarding damages for the failed secondary sale amounted to an impermissible share buyback by the company. The SGHC rejected this argument, noting that the tribunal had already explicitly addressed the first part of their defense by rejecting their interpretation of the exit clause as anything less than an absolute obligation. Since the second part depended on the first, further engagement was unnecessary.