Read the full judgment text of FACV 14/2017 on BabelCite. This Court of Final Appeal judgment was delivered on 11 April 2018 before Chief Justice Ma, Mr Justice Ribeiro PJ, Mr Justice Tang PJ, Mr Justice Fok PJ and Lord Reed NPJ.
Arbitration – enforcement of New York Convention awards – extension of time to apply to set aside enforcement orders – proper test for granting extension of time – choice of remedies principle – relevance of award not being set aside at seat of arbitration – section 44(2)(b) Arbitration Ordinance (Cap 341) – whether good faith duty precludes reliance on jurisdictional ground – residual discretion to enforce. The eight respondent companies of the Astro group obtained an Interim Final Award from an SIAC tribunal in a sum exceeding US$130 million against the appellant First Media, a member of the Lippo group, arising from a failed Indonesian multimedia joint venture. The tribunal had joined the Additional Parties (6th, 7th and 8th respondents) under rule 24(b) of the 2007 SIAC Rules although they were never parties to the Subscription and Shareholders' Agreement. The Singapore Court of Appeal held by judgment dated 31 October 2013 that rule 24(b) did not empower joinder of non-parties and the tribunal therefore lacked jurisdiction over the Additional Parties. Astro nevertheless sought to enforce in Hong Kong under section 2GG of the Arbitration Ordinance, obtaining orders from Saunders J in August and September 2010. First Media, believing it had no Hong Kong assets, did not apply to set aside within the 14-day period prescribed by Order 73 r 10(6), and judgment was entered on 9 December 2010. After a garnishee order nisi was served in August 2011 attaching a US$44 million debt owed to First Media by AcrossAsia Limited, First Media issued a summons on 18 January 2012 for an extension of time, which was stayed to await the Singapore Court of Appeal's decision. Chow J refused the extension in February 2015, holding (1) that First Media was precluded from relying on the section 44(2)(b) ground (invalid arbitration agreement) by reason of breach of its duty of good faith, in that it had defended on the merits before the tribunal while keeping the jurisdictional objection in reserve; and (2) that even on the merits, extension should be refused based on the Terna Bahrain approach, the 14-month delay, the deliberate decision not to set aside, and the fact that the awards had not been set aside in Singapore. The Court of Appeal (Kwan JA) overturned the good faith ruling but upheld the refusal of the extension. Held, allowing the appeal: (1) The proper test for granting an extension of time under Order 3 r 5 involves looking at all relevant matters and considering the overall justice of the case, eschewing a rigid mechanistic approach, as indicated in The Decurion. The Terna Bahrain structured approach of downgrading the merits and treating the grant of an extension as exceptional is inappropriate in this jurisdiction and is inconsistent with the broad, overall-justice approach, particularly where the tribunal's lack of jurisdiction has been conclusively established. (2) The fact that an award has not been set aside by the courts of the seat of arbitration is not a relevant factor when considering an extension of time, except in cases where section 44(2)(f) is relied on. To hold the deliberate choice of a passive remedy against the applicant conflicts with the choice of remedies principle, which permits a party to choose between challenging the award at the seat and resisting enforcement in another forum. Section 42(2) does not assist since the binding quality of the award depends on enforceability, which is the very issue in dispute. The good faith principle established in China Nanhai and Hebei does not preclude reliance on section 44(2)(b) on the facts, since the absence of a valid arbitration agreement is a fundamentally important factor militating against discretionary enforcement, and the SCA Judgment had conclusively established the tribunal's lack of jurisdiction. The Court of Final Appeal set aside the orders below and granted First Media an extension of three months from handing down to apply to set aside the enforcement orders and judgment. Costs: respondents to pay costs of the appeals in the Court of Final Appeal and the Court of Appeal (order nisi); Chow J's costs order set aside, with the appellant to pay half of the respondents' costs before Chow J (order nisi).
Legal issues: Proper test for granting extension of time to resist enforcement of a New York Convention arbitration award · Relevance of award not being set aside at seat of arbitration when considering extension of time
Outcome: Appeal allowed; extension of time granted to the appellant (PT First Media TBK) to apply to set aside the orders granting leave to enforce the arbitration awards and the judgment entered thereon; orders of the Courts below set aside.
Cited by 19 cases · Cites 5 cases