Sobati General Trading LLC v PT Multistrada Arahsarana: Dispute over Distributorship Agreement Termination

In Sobati General Trading LLC v PT Multistrada Arahsarana, the Singapore High Court addressed an application by Sobati General Trading LLC (SGT) to set aside an arbitral award related to a distributorship agreement with PT Multistrada Arahsarana (Multistrada). SGT claimed the arbitral award was made in breach of the rules of natural justice and exceeded the tribunal's mandate. The central issue was whether the tribunal correctly decided that the distributorship agreement terminated on 31 March 2005, based on a fax from Multistrada. The High Court dismissed SGT's application, finding no breach of natural justice or exceeding of mandate.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The Singapore High Court dismissed Sobati's application to set aside an arbitral award, finding the distributorship agreement with Multistrada terminated.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Sobati General Trading LLCApplicant, ClaimantCorporationApplication dismissedLostChou Tzu, Sheila Ng
PT Multistrada ArahsaranaRespondent, DefendantCorporationApplication dismissedWonTan Chuan Thye, Germaine Chia

3. Judges

Judge NameTitleDelivered Judgment
Tay Yong KwangJudgeYes

4. Counsels

Counsel NameOrganization
Chou TzuRajah & Tann LLP
Sheila NgRajah & Tann LLP
Tan Chuan ThyeWong & Leow LLC
Germaine ChiaWong & Leow LLC

4. Facts

  1. SGT and Multistrada entered into an exclusive distributorship agreement in March 2003.
  2. The agreement was for the sale and distribution of tyres in Iran.
  3. SGT alleged Multistrada unilaterally terminated the agreement in August 2006.
  4. Multistrada claimed the agreement was not valid or had not been renewed.
  5. A fax from Multistrada in October 2004 stated the agreement was valid until March 2005.
  6. SGT argued the fax showed the agreement remained in effect until August 2006.
  7. The arbitrator found the agreement terminated in March 2005 based on the October 2004 fax.

5. Formal Citations

  1. Sobati General Trading LLC v PT Multistrada Arahsarana, OS No 412/2009, [2009] SGHC 245

6. Timeline

DateEvent
March 2003 Agreement entered into
Multistrada sent fax to SGT
Multistrada appointed a new sole distributor in Iran
SGT filed a request for arbitration with the ICC International Court of Arbitration
Multistrada filed its answer to SGT’s Request
The ICC Court decided that the arbitration should proceed
A single arbitrator was appointed
Terms of Reference agreed
Multistrada filed its Statement of Defence and Counterclaim
SGT filed its Reply to the Statement of Defence and Defence to the Counterclaims
Multistrada submitted closing submissions
Arbitration proceedings concluded
SGT submitted Reply to Multistrada’s Closing Submissions
Tribunal rendered the final award
Tribunal rendered the addendum
Decision Date

7. Legal Issues

  1. Breach of Contract
    • Outcome: The court found that the distributorship agreement had terminated before the alleged breach.
    • Category: Substantive
    • Sub-Issues:
      • Improper termination
  2. Breach of Natural Justice
    • Outcome: The court held that there was no breach of natural justice as SGT had the opportunity to present its case.
    • Category: Procedural
  3. Exceeding Mandate
    • Outcome: The court held that the tribunal did not exceed its mandate.
    • Category: Jurisdictional

8. Remedies Sought

  1. Damages
  2. Specific Performance

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Automotive

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Soh Beng Tee & Co Pte Ltd v Fairmont Development Pte LtdCourt of AppealYes[2007] 3 SLR 86SingaporeCited for the key principles governing the setting aside of an arbitral award on the basis of a breach of the rules of natural justice.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Distributorship Agreement
  • Arbitral Award
  • Termination Date
  • October 2004 Fax
  • International Arbitration Act
  • Rules of Natural Justice
  • ICC Rules
  • Terms of Reference

15.2 Keywords

  • arbitration
  • contract
  • distributorship
  • termination
  • Singapore
  • tyres

16. Subjects

  • Arbitration
  • Contract Law
  • International Trade

17. Areas of Law

  • Arbitration Law
  • Contract Law
  • Civil Procedure