Emergency arbitrator award in a foreign seated arbitration found to be enforceable by the Singapore High Court
06 December 2022
The case, CVG v CVH, concerned the enforcement in Singapore of an award by an emergency arbitrator in a Pennsylvania (USA) seated arbitration.
CVH had been CVG’s franchisee in Singapore since 1997. This franchise business was regulated by four agreements (the Agreements). Disputes arose between the parties. In May 2022, CVH terminated the Agreements on the grounds of CVG’s material breaches and/or anticipated repudiation of the Agreements.
The dispute resolution clause in the Agreements provided for an arbitration seated in Pennsylvania under the aegis of the International Centre for Dispute Resolution (ICDR). Following the termination of the Agreements, CVG filed the request for arbitration and an application for emergency measures seeking relief to enforce post-termination provisions in the Agreements.
The ICDR appointed an emergency arbitrator to consider CVG’s request for emergency relief. On 15 June 2022, the emergency arbitrator issued an award granting relief to restore the status quo of the parties to the position before termination of the Agreements (Emergency Award).
On CVG’s application, the Assistant Registrar in Singapore (empowered to exercise judicial powers in limited instances like enforcement matters) made an order enforcing the Emergency Award in Singapore. This enforcement order was challenged by CVH before the Singapore High Court.
High Court confirms enforceability of Emergency Award under Part 3 of the IAA
The enforcement of the Emergency Award was challenged by CVH on two broad grounds; first, Part 3 of the IAA dealing with the enforcement of foreign arbitral awards does not contemplate the enforcement of an award by an emergency arbitrator; and second, even if it did, the Emergency Award exceeded the emergency arbitrator’s jurisdiction, breached the principles of natural justice, and/or the emergency arbitrator failed to exercise the authority that the parties granted to it.
CVH’s challenge on the second ground succeeded – the Emergency Award could not be enforced in Singapore as CVH was not given the opportunity to rebut a new case that CVG had set out (for the first time) in its post hearing briefs. However, notably, the High Court rejected CVH’s first ground of challenge, thereby confirming in principle that an award of an emergency arbitrator arising out of a foreign seated arbitration is enforceable in Singapore just as any other foreign award under Part 3 of the IAA.
The basis of the decision on the first ground of challenge was as follows:
- The IAA, which provides the regime applicable to “international arbitrations”, is divided into two principal parts. Part 2 deals with international commercial arbitrations; Part 3 deals with recognition and enforcement of arbitral awards that are made outside of Singapore (or foreign awards).
- The 2012 amendments to the IAA included emergency arbitrators in the definition of an “arbitral tribunal” for the purposes of Part 2. That change was not expressly applied to Part 3 of the IAA.
- In Part 3, a “foreign award” is defined as an arbitral award made in a country other than Singapore. “Arbitral award” is in turn defined by reference to its meaning in the New York Convention, but the IAA also clarifies that it could also include an interim order or conservatory measure made by an “arbitral tribunal”. The definition of an arbitral award in the New York Convention does not expressly include an award made by an emergency arbitrator.
- The term “arbitral tribunal” has not been defined in Part 3 of the IAA. Given the absence of express guidance on the meaning of the term “arbitral tribunal”, the judge purposively read it to also include an award by an emergency arbitrator. By extension the term foreign award includes awards by emergency arbitrators.
- The judge relied on the intention behind the 2012 amendments to the IAA, which accorded an emergency arbitrator the same status as an arbitral tribunal in Part 2, to come to his conclusion. In particular, the judge quoted the Ministry of Law’s statement from 2012 that the proposed amendments are made so that “orders made by such emergency arbitrators….in both foreign and local arbitrations” (emphasis supplied) are enforceable under the IAA regime.
The judgment is a welcome development resolving the uncertainty surrounding the enforcement of emergency arbitrator awards in foreign seated arbitrations in Singapore under the IAA regime. It reflects the Singapore courts’ pro-arbitration credentials and further cements its place as one of the leading arbitral hubs in Asia and beyond.
The emergency arbitrator has become an increasingly important forum for parties to seek quick and expeditious interim relief. The enforcement of such orders or awards remains a challenge. As the New York Convention and the UNCITRAL Model Law on International Commercial Arbitration do not include an emergency arbitrator within the definition of an arbitral tribunal, it is up to each country to revise and update its arbitration laws to ensure that orders or awards made by emergency arbitrators are directly enforceable in their jurisdiction. Very few countries (with the exception of Singapore and Hong Kong) have directly addressed this issue under their domestic legislation governing arbitration.
The approach followed by the Singapore High Court, closely mirrors the approach taken by the Indian Supreme Court recently in Amazon v Future Retail, albeit in the context of the enforcement in India of an emergency arbitrator award in an India seated arbitration. The Supreme Court decided that the lack of a specific recognition of an emergency arbitrator or its award under the Indian Arbitration & Conciliation Act 1996 did not prevent the Court from treating an award made by the emergency arbitrator as an interim order made by a fully constituted arbitral tribunal, and enforceable as such.
Judgment: CVG v CVH