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Singapore’s Court of Appeal allowed enforcement of award in favour of a non-existent entity

In the case of National Oilwell Varco Norway AS (formerly known as Hydralift AS) v Keppel FELS Ltd (formerly known as Far East Levingston Shipbuilding Ltd) [2022] SGCA 24, Keppel FELS Ltd (“KFELS”) commenced arbitration against Hydralift in 2007. At that point of time, Hydralift had ceased to exist as it had merged with a company called National Oilwell Varco Norway (“NOV Norway”) in October 2004. NOV Norway did not inform KFELS about the merger and Hydralift's dissolution. Instead, it defended the arbitration in Hydralift's name and made counter-claims against KFELS. Ultimately, the arbitral tribunal found in Hydralift's favour, and ordered KFELS to pay USD 2.8 million in damages and costs.

Subsequently, NOV Norway sought permission from the Singapore courts to enforce the award against KFELS. KFELS resisted and contended that, since the award was made in favour of Hydralift, an entity that ceased to exist, NOV Norway could not enforce the award and any order enforcing the award would be contrary to the arbitral tribunal’s intention. The Court of Appeal disagreed.

The Court of Appeal's decision
In coming to its decision, the Court held the following:

(i)    Under Norwegian company law, Hydralift's legal personality survived the merger in 2004 and
       NOV Norway is the same legal entity as Hydralift.
(ii)   The contract between the parties did not prohibit the transfer of rights from Hydralift to NOV
       Norway under the arbitration agreement following the merger in 2004. There was therefore
       a binding arbitration agreement between NOV Norway and KFELS when the arbitration was
(iii)  The Singapore courts have the power to enforce an arbitral award in favour of or against a
       party not expressly named in the award when there is a misnomer situation. To refuse to enforce
       the award against KFELS would place an "undue emphasis on form even when it is obvious
       what the substance of the Award entails". By granting permission to enforce the award, the court
       is not interfering with the tribunal's reasoning; it is only accommodating a change of name for a
       mistakenly named party at a later stage.
(iv)  Although NOV Norway's concealment of the merger was "inexplicable and unsatisfactory", 
       KFELS would have continued to pursue the arbitration even if it knew that Hydralift had ceased
       to exist. KFELS would have simply substituted Hydralift's name with NOV Norway.

On the other hand, it is interesting to note that the High Court commented that "the predicament in which [NOV Norway] finds itself now is entirely the result of its own extraordinary decision, sustained over 12 years, to impersonate Hydralift both in the arbitration and in the related litigation". While NOV Norway’s concealment of the merger is unclear, this decision is a cautionary tale for parties to ensure that arbitral proceedings are commenced by and against the correct parties. Claimant should conduct company searches on potential respondents before commencing any proceedings.

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