Dermajaya Properties v Premium Properties: International Arbitration Act & Security for Costs

In Dermajaya Properties Sdn Bhd v Premium Properties Sdn Bhd and Another, the Singapore High Court addressed whether an arbitrator had the jurisdiction to order security for costs. The court, presided over by Judicial Commissioner Woo Bih Li, held that the International Arbitration Act (IAA) and the Model Law applied to the arbitration because Singapore was the designated seat of arbitration, regardless of the parties' adoption of the UNCITRAL Rules. The court dismissed the appeal, finding that the arbitrator did not exceed his jurisdiction by including arbitrator's fees and SIAC costs in the security for costs award.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court held that the International Arbitration Act (IAA) applies when Singapore is the seat of arbitration, even if parties adopt UNCITRAL rules.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Dermajaya Properties Sdn BhdClaimantCorporationAppeal DismissedLost
Premium Properties Sdn BhdRespondentCorporationAppeal DismissedWon
CFE Holdings (Malaysia) Sdn BhdRespondentCorporationAppeal DismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Woo Bih LiJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Christopher ChuahDrew & Napier LLC
Michael ChiaDrew & Napier LLC
Sundaresh MenonRajah & Tann
Hilbert LeeRajah & Tann

4. Facts

  1. Dermajaya Properties Sdn Bhd (Claimant) agreed to buy 100% of the paid-up capital in President Hotel Sdn Bhd from Premium Properties Sdn Bhd and CFE Holdings (Malaysia) Sdn Bhd (Respondents).
  2. The agreement contained an arbitration clause referring disputes to a sole arbitrator under the UNCITRAL Rules, with Singapore as the place of arbitration.
  3. Disputes arose, and the Claimant commenced an action in Malaysia, which was stayed.
  4. The parties appointed Dato Mahadev Shankar as arbitrator.
  5. The Respondents applied for security for costs in the sum of RM500,000, later reduced to RM470,000.
  6. The arbitrator made an Interim Award ordering the Claimant to deposit S$200,000 as security for the Respondents’ costs.
  7. The Claimant appealed the arbitrator's decision to the High Court.

5. Formal Citations

  1. Dermajaya Properties Sdn Bhd v Premium Properties Sdn Bhd and Another, OM 600037/2001, [2002] SGHC 53

6. Timeline

DateEvent
Agreement signed for Claimant to buy shares in President Hotel Sdn Bhd from Respondents
Action commenced in the High Court of Malaya in Kuala Lumpur by the Claimant was stayed
Parties agreed to the appointment of Dato Mahadev Shankar as arbitrator
Respondents applied for security for costs from the Claimant
Arbitrator made an Interim Award ordering Claimant to deposit S$200,000 as security for costs
Appeal came up for hearing before the High Court
Judgment issued

7. Legal Issues

  1. Jurisdiction of Arbitrator to Order Security for Costs
    • Outcome: The court held that the arbitrator had jurisdiction to order security for costs against the Claimant.
    • Category: Substantive
  2. Interpretation of Section 15 of the International Arbitration Act
    • Outcome: The court held that the amendments to section 15 of the International Arbitration Act clarified the law, requiring an express agreement to opt out of the Model Law.
    • Category: Substantive

8. Remedies Sought

  1. Security for Costs

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Hospitality

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Coop International Pte Ltd v Ebel SAHigh CourtYes[1998] 3 SLR 670SingaporeCited for the proposition that a selection of an incompatible set of rules like the UNCITRAL Rules is sufficient to constitute the agreement of exclusion under section 15 of the International Arbitration Act (IAA).
John Holland Pty Ltd (fka John Holland Construction & Engineering Pty Ltd) v Toyo Engineering Corp (Japan)High CourtYes[2001] 2 SLR 262SingaporeCited for the proposition that a selection of an incompatible set of rules like the UNCITRAL Rules is sufficient to constitute the agreement of exclusion under section 15 of the International Arbitration Act (IAA).
Naviera Amazonica Peruana S.A. v Compania Internacional De Seguros Del PeruN/AYes[1988] 1 Lloyd’s Rep 116N/ACited to explain the distinction between the legal 'seat' of an arbitration and the geographically convenient place for holding hearings.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A, 1995 Ed)Singapore
Arbitration Act (Cap 10)Singapore
Interpretation Act (Cap 1)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • International Arbitration Act
  • UNCITRAL Rules
  • Security for Costs
  • Curial Law
  • Model Law
  • Place of Arbitration
  • Seat of Arbitration

15.2 Keywords

  • arbitration
  • international arbitration
  • security for costs
  • singapore
  • international arbitration act
  • UNCITRAL
  • model law

17. Areas of Law

Area NameRelevance Score
International Arbitration Act95
Arbitration90
Conflict of Laws80
International Commercial Contracts75
Curial Law70
Costs60

16. Subjects

  • Arbitration
  • International Commercial Law
  • Civil Procedure