ENFORCING JUDGMENTS & AWARDS II: ENFORCING A FOREIGN ARBITRAL AWARD IN SINGAPORE
Suppose you just went through a long, tiring, expensive arbitration overseas and finally the arbitral tribunal issues an award in your favour, only to realise the other party (let’s call him the “debtor”) has their assets in Singapore, so enforcing the award in the seat of arbitration is pointless. Now, you want to enforce the award in Singapore and get the debtor to pay up.
From here on, we will assume your award was made in a country that is a contracting state in the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also known as the “New York Convention”). Most countries are contracting states in the New York Convention. This is important, because the New York Convention is what creates the obligation for individual countries to recognise and enforce foreign arbitral awards. If, for some reason, you had your arbitration seated in a country that is not a New York Convention contracting state, you are pretty much out of luck because Singapore has not entered into any bilateral treaty with non-contracting states creating obligations to enforce arbitral awards made there. Many countries also incorporate the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”) into their own arbitration laws. Singapore does have the Model Law incorporated as the First Schedule of the International Arbitration Act (“IAA”). Some of the points made below will make references the Model Law. However, it is important that you consult your lawyer in the seat of the arbitration on what that country’s arbitration laws are and whether the Model Law applies to that country, because one wrong assumption can mean that your award is dead before you even arrive in Singapore to seek enforcement.
Setting aside an award: Yes, your award may be dead before you even try to enforce it here
Unlike a court judgement, the debtor has two ways to have your award rendered unenforceable. The first is for the debtor to be active and apply to court to set aside the award. The other way is for the debtor to ask the court to refuse enforcement when you seek enforcement. Countries that have incorporated the Model Law generally will have provisions allowing for applications to set aside an arbitral award made there. We will not go into specifics here because the situations in which awards can be set aside can differ between countries, depending on how they incorporate the Model Law. The point is, if the debtor applies to set aside the award in the country where you got the award, you have to make sure the debtor doesn’t succeed there.
Refusing enforcement: Because we don’t trust arbitrators enough to validate them readily
Once you reach Singapore, you can apply to the High Court for leave to enforce your award. It is at this point where the debtor can seek to refuse enforcement. The IAA prescribes circumstances where the court can refuse to enforce an arbitral award:
- If the debtor had no capacity to enter the arbitration agreement with you at the time of the agreement;
- If the arbitration agreement was not valid;
- If the debtor was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or otherwise was unable to present his case in the proceedings;
- The award deals with something beyond the scope of what was submitted to arbitration;
- There was a breach of the agreed arbitration procedure, or that the procedure was not in accordance with the law of the country where the arbitration took place;
- The award has not yet become binding on the parties, or has been set aside or suspended by a competent authority
- The subject matter of the dispute between the parties cannot be arbitrated under the law of Singapore
- Enforcing the award would be contrary to the public policy of Singapore
If none of these apply to your case, you will be able to obtain leave of court to enforce the award against the debtor as if it is a court judgement delivered here.
What if the arbitration took place in Singapore instead?
The grounds by which the debtor can seek to get your arbitral award set aside in Singapore are broadly the same as the grounds for refusing enforcement. This means that if the debtor already attempts to set aside your award and fails, chances are he will not be able to refuse enforcement either. Please note that this article does not constitute express or implied legal advice, whether in whole or in part. If you require legal advice, please contact me at walter@silvesterlegal.com.
