Quarella SpA v Scelta Marble: Setting Aside Arbitration Awards for Wrong Choice of Law
Quarella SpA, an Italian company, applied to the High Court of Singapore to set aside two arbitration awards made in favor of Scelta Marble Australia Pty Ltd, an Australian company, in an international arbitration. The dispute arose from a distributorship agreement between the parties. Quarella argued that the tribunal erred in its interpretation of the choice of law clause, specifically regarding the applicability of the CISG and Italian law. Judith Prakash J dismissed the application, holding that the tribunal's interpretation of the choice of law clause did not constitute grounds for setting aside the award under the UNCITRAL Model Law.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses Quarella's application to set aside arbitration awards, holding that the tribunal's interpretation of the choice of law clause was not grounds for setting aside the award.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Quarella SpA | Plaintiff | Corporation | Application dismissed | Lost | Ang Wee Tiong |
| Scelta Marble Australia Pty Ltd | Defendant | Corporation | Judgment for Defendant | Won | Cavinder Bull, Woo Shu Yan, Colin Liew |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ang Wee Tiong | Chris Chong & CT Ho Partnership |
| Cavinder Bull | Drew & Napier LLC |
| Woo Shu Yan | Drew & Napier LLC |
| Colin Liew | Drew & Napier LLC |
4. Facts
- Quarella and Scelta entered into a distributorship agreement on 27 January 2000.
- The agreement contained a choice of law clause specifying the CISG and Italian law.
- A dispute arose, and Scelta initiated arbitration proceedings.
- The tribunal issued an award in favor of Scelta, ordering Quarella to pay damages.
- Quarella applied to set aside the award, arguing the tribunal misinterpreted the choice of law clause.
- Quarella argued that the tribunal failed to apply the law chosen by the parties.
5. Formal Citations
- Quarella SpA v Scelta Marble Australia Pty Ltd, Originating Summons No 122 of 2012, [2012] SGHC 166
6. Timeline
| Date | Event |
|---|---|
| Distributorship agreement signed. | |
| Scelta filed a Request for Arbitration with the Paris Secretariat of the ICC International Court of Arbitration. | |
| Associate Professor Gary F Bell was nominated jointly by Quarella and Scelta to be the sole arbitrator. | |
| The Secretary General of the ICC International Court of Arbitration confirmed Associate Professor Gary Bell as the sole arbitrator. | |
| The Tribunal issued a Partial Award on All Substantive Issues in Dispute (Final as to All Matters Except Costs). | |
| The Tribunal issued a Final Award (on Costs). | |
| Application dismissed. |
7. Legal Issues
- Setting Aside Arbitration Award
- Outcome: The court held that the tribunal's interpretation of the choice of law clause did not constitute grounds for setting aside the award under the UNCITRAL Model Law.
- Category: Procedural
- Sub-Issues:
- Failure to apply chosen law
- Exceeding scope of submission to arbitration
- Choice of Law Interpretation
- Outcome: The court upheld the tribunal's decision that the CISG was not applicable to the distributorship agreement, and Italian law applied.
- Category: Substantive
- Sub-Issues:
- Applicability of CISG
- Applicability of Italian Law
8. Remedies Sought
- Setting aside of arbitration awards
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
11. Industries
- Manufacturing
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Sheng Siong Supermarket Pte Ltd v Carilla Pte Ltd | High Court | Yes | [2011] 4 SLR 1094 | Singapore | Cited for the principle of contractual interpretation that a construction which entailed that a contract and its performance was lawful and effective was to be preferred. |
| Sui Southern Gas Company Ltd v Habibullah Coastal Power Company (Pte) Ltd | High Court | Yes | [2010] 3 SLR 1 | Singapore | Applied the Court of Appeal’s decisions in PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA and Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd, regarding errors of law not being grounds for setting aside an award. |
| PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA | Court of Appeal | Yes | [2007] 1 SLR(R) 597 | Singapore | Regarding errors of law not being grounds for setting aside an award. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | Court of Appeal | Yes | [2007] 3 SLR(R) 86 | Singapore | Regarding errors of law not being grounds for setting aside an award. |
| In the Matter of the Arbitration of Certain Controversies between Chromalloy Aeroservices and the Arab Republic of Egypt | US District Court for the District of Columbia | Yes | 939 F. Supp. 907 (D.D.C 1996) | United States | Discussed in relation to the setting aside of an ICC award in Egypt, where the Egyptian court found that the arbitral tribunal had failed to apply the law agreed by the parties. |
| London and North Western and Great Western Joint Railway Companies v J H Billington, Limited | House of Lords | Yes | [1899] AC 79 | United Kingdom | Regarding the principle that an arbitral tribunal has no jurisdiction to decide any issue not referred to it for determination by the parties. |
| CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK | Court of Appeal | Yes | [2011] 4 SLR 305 | Singapore | Set out the law relating to Article 34(2)(a)(iii) of the Model Law. |
| Lesotho Highlands Development Authority v Impregilo SpA | House of Lords | Yes | [2006] 1 AC 221 | United Kingdom | Regarding the distinction between the erroneous exercise by an arbitral tribunal of an available power vested in it and the purported exercise by the arbitral tribunal of a power which it did not possess. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration
- Choice of Law
- CISG
- Distributorship Agreement
- Setting Aside
- UNCITRAL Model Law
- International Arbitration Act
15.2 Keywords
- arbitration
- choice of law
- CISG
- setting aside
- Singapore
- Quarella
- Scelta
- distributorship agreement
16. Subjects
- Arbitration
- Contract Law
- International Trade Law
17. Areas of Law
- Arbitration Law
- International Commercial Arbitration
- Contract Law
- Choice of Law