Singapore High Court: Standards for Natural Justice and Tribunal Jurisdiction

In India Glycols Ltd (IGL) and Others v Texan Minerals and Chemicals LLC (Texan), [2025] SGHC 28 the Singapore High Court (SGHC) partially set aside an arbitral award due to the tribunal exceeding its jurisdiction while rejecting claims of a breach of natural justice. The dispute involved a Manufacturer Representation Agreement (MRA) between Texan and IGL, with compliance to U.S. Good Manufacturing Practices (GMP) required. After receiving shipments, Texan discovered GMP violations, rendering the products unsellable and prompting disposal. Texan initiated arbitration against IGL, its U.S. subsidiary ICI, and an ICI board member, seeking damages for non-compliance with the MRA. The respondents counterclaimed for an offset against a separate claim.

The tribunal ruled in Texan's favor, awarding damages minus the set-off amount, holding all respondents jointly and severally liable. The respondents challenged this decision, and the SGHC partially annulled the award.

Texan’s claim of a breach of natural justice under Section 24(b) of the International Arbitration Act 1994 (2020 Rev Ed) (IAA) and Article 34(2)(a)(ii) of the UNCITRAL Model Law was dismissed. The SGHC found that natural justice is upheld if a party has the opportunity to address a scenario from which the court reasonably infers an opposing outcome. Since the tribunal allowed respondents to challenge Texan’s inability to sell the goods due to the violation, it was foreseeable to conclude that, without the violation, the goods could have been sold at cost price. The court also dismissed concerns about a break-even presumption, stating it reinforced existing conclusions without affecting the ruling.

The SGHC further ruled that the tribunal had exceeded its jurisdiction by holding ICI and its board member liable for damages under the MRA. Citing Bloomberry Resorts and Hotels Inc v Global Gaming Philippines LLC [2021] 2 SLR 1279, the court conducted a two-step jurisdictional review: First, identifying the matters submitted for decision based on pleadings, lists of issues, opening statements, evidence, and final submissions; second, assessing whether the tribunal remained within those bounds. It concluded that the damages claim for GMP violations targeted only IGL, making joint liability an overreach. As this decision was severable, the SGHC set it aside under Article 34(2)(a)(iii) of the Model Law. The set-off claim remained unaffected, as IGL alone could uphold it.