Beijing Sinozonto v Goldenray: Enforcement of CIETAC Arbitral Award & Public Policy

In Beijing Sinozonto Mining Investment Co Ltd v Goldenray Consortium (Singapore) Pte Ltd, the Singapore High Court heard an appeal by Goldenray against the dismissal of their application to set aside an order granting Beijing Sinozonto leave to enforce a CIETAC arbitral award in Singapore. Goldenray argued that enforcement would be contrary to Singapore's public policy due to alleged fraud and corruption in procuring the award. The High Court dismissed the appeal, finding no cogent evidence to support Goldenray's claims and concluding that the award was based on a settlement agreement between the parties.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Written Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court dismissed an appeal to set aside an order enforcing a CIETAC arbitral award, finding no evidence of fraud or corruption.

1.7 Decision Date

13 November 2013

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Beijing Sinozonto Mining Investment Co Ltd	Applicant	Corporation	Appeal dismissed	Won	Christopher Tan, Marcus Foong, Jacqueline Chua
Goldenray Consortium (Singapore) Pte Ltd	Respondent, Appellant	Corporation	Appeal Dismissed	Lost	Sim Chong, Yip Wei Yen

3. Judges

Judge Name	Title	Delivered Judgment
Belinda Ang Saw Ean	Judge	Yes

4. Counsels

Counsel Name	Organization
Sim Chong	JLC Advisors LLP
Yip Wei Yen	JLC Advisors LLP
Christopher Tan	Lee & Lee
Marcus Foong	Lee & Lee
Jacqueline Chua	Lee & Lee

4. Facts

BSM and Goldenray agreed to a joint investment to develop a crocodile farm in Beijing.
The joint investment involved four agreements, including a share transfer and loan agreement.
BSM granted Goldenray a loan of RMB50.2m, secured by a pledge of shares and a personal guarantee.
Differences arose between BSM and Goldenray under the BSM/Goldenray Loan Agreement.
BSM submitted a Request for Arbitration under the CIETAC rules, claiming repayment of the loan.
The Tribunal issued an Award in accordance with the terms of a settlement agreement.
Goldenray applied to set aside the order granting leave to enforce the Award, alleging fraud and corruption.

5. Formal Citations

Beijing Sinozonto Mining Investment Co Ltd v Goldenray Consortium (Singapore) Pte Ltd, , [2013] SGHC 248

6. Timeline

Date	Event
2011-04-05	Beijing Goldenray Share Transfer and Loan Agreement was signed.
2011-04-15	Beijing Goldenray Share Transfer Agreement was signed.
2011-04-15	Loan agreement between BSM and Beijing Goldenray was signed.
2011-04-15	Loan agreement between BSM and Goldenray was signed.
2011-08-01	BSM submitted a Request for Arbitration.
2011-08-03	BSM submitted its Request for Arbitration under the CIETAC rules.
2011-08-09	BSM proffered a draft settlement agreement for Goldenray’s consideration.
2011-08-11	Goldenray responded with changes, including a proposal to buy over BSM’s entire 45% shareholding in Beijing Goldenray.
2011-08-19	A Notice of Arbitration was sent by the Secretariat of CIETAC to BSM and Goldenray.
2011-10-08	Mr Xia Jun, Mdm Hu Wanru and Mr Li Yong accepted appointment as arbitrators.
2011-10-09	Goldenray submitted its Statement of Defence and Statement of Counterclaim to the Tribunal.
2011-10-09	Goldenray sent an amended draft settlement agreement to BSM.
2011-10-13	BSM informed Goldenray that it wanted the settlement agreement to be recorded in an arbitral award.
2011-11-21	Goldenray sent a further draft settlement agreement for review but sought the withdrawal of the Arbitration.
2011-11-22	Goldenray submitted its amended Statement of Counterclaim.
2011-11-28	CIETAC notified the parties that the Arbitration was fixed for hearing on 18 January 2012.
2011-12-16	BSM’s Statement of Defence to the Counterclaim was submitted.
2012-01-18	Arbitration hearing was held.
2012-01-20	The settlement agreement was signed by the PRC lawyers.
2012-02-15	The Tribunal issued the Award.
2012-02-21	BSM took out enforcement proceedings against Goldenray in PRC.
2012-02-29	Goldenray paid RMB3m.
2012-04-10	BSM started enforcement proceedings again.
2012-05-03	Goldenray paid RMB4m.
2012-07-09	BSM took out enforcement proceedings in PRC for the entire outstanding sum of RMB73.2m.
2012-07-18	An enforcement order was granted.
2012-08-17	BSM obtained an order for leave to enforce the arbitral award in Singapore.
2013-01-21	Goldenray’s application to set aside the August Order was dismissed.
2013-07-22	Goldenray’s appeal against the January 2013 Order was dismissed.
2013-11-14	Decision Date

7. Legal Issues

Enforcement of Arbitral Award
- Outcome: The court allowed the enforcement of the arbitral award.
- Category: Substantive
- Related Cases:
  - [2007] 1 SLR(R) 597
  - [2011] 4 SLR 739
  - [2010] SGHC 151
Public Policy Exception to Enforcement
- Outcome: The court held that enforcement of the award would not be contrary to the public policy of Singapore.
- Category: Substantive
- Related Cases:
  - [2007] 1 SLR(R) 597
  - [2011] 4 SLR 739
  - [2010] SGHC 151
Fraud and Corruption in Arbitration
- Outcome: The court found no cogent evidence of fraud or corruption that would warrant setting aside the enforcement order.
- Category: Substantive

8. Remedies Sought

Enforcement of Arbitral Award
Monetary Damages

9. Cause of Actions

Breach of Contract
Enforcement of Arbitral Award

10. Practice Areas

Commercial Litigation
Arbitration
Enforcement of Arbitral Awards

11. Industries

Mining
Agriculture

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA	Court of Appeal	Yes	[2007] 1 SLR(R) 597	Singapore	Cited for the narrow scope of operation of the concept of 'public policy' under the International Arbitration Act.
AJU v AJT	Court of Appeal	Yes	[2011] 4 SLR 739	Singapore	Cited to clarify that the discussion of 'public policy' in Dexia Bank is equally applicable to a case where the enforcement of a foreign arbitral award is being resisted under s 31(4)(b) of the IAA.
Strandore Invest A/S and others v Soh Kim Wat	High Court	Yes	[2010] SGHC 151	Singapore	Cited for holding that Dexia Bank applies in the context of a refusal to enforce an award under s 31(4)(b) of the IAA.
Galsworthy Ltd of the Republic of Liberia v Glory Wealth Shipping Pte Ltd	High Court	Yes	[2011] 1 SLR 727	Singapore	Cited for the principle that the 'public policy' ground for refusing enforcement would be triggered if such enforcement offended notions of justice and morality, or if there were exceptional circumstances to justify a refusal of enforcement.
Aloe Vera of America, Inc v Asianic Food (S) Pte Ltd and another	High Court	Yes	[2006] 3 SLR(R) 174	Singapore	Cited for the principle that the 'public policy' ground for refusing enforcement would be triggered if such enforcement offended notions of justice and morality, or if there were exceptional circumstances to justify a refusal of enforcement.
Dongwoo Mann+Hummel Co Ltd v Mann+Hummel GmbH	High Court	Yes	[2008] 3 SLR(R) 871	Singapore	Cited for the principle that if a party bribes the tribunal into giving a decision in its favour, or does anything to corrupt, subvert or compromise the professional integrity, impartiality and independence of the tribunal, that would certainly shock the conscience and be clearly injurious to the public good or wholly offensive to the ordinary reasonable and fully informed member of the public.
Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd	High Court	Yes	[2010] 3 SLR 1	Singapore	Cited for the view that an award obtained by corruption, bribery or fraud would violate the basic notions of morality and justice and amount to a breach of the public policy of Singapore.
Swiss Singapore Overseas Enterprises Pte Ltd v Exim Rajathi India Pvt Ltd	High Court	Yes	[2010] 1 SLR 573	Singapore	Cited for considering and adopting the meaning of the phrase “obtained by fraud” as used in the UK Arbitration Act 1996.
IMC Aviation Solutions Pty Ltd v Altain Khuder LLC	Victorian Court of Appeal	Yes	(2011) 282 ALR 717	Australia	Cited for the view that the party seeking to resist enforcement under s 8(7) of the Australian IAA must persuade the court on a balance of probabilities that enforcement would be contrary to the public policy of the enforcing State.
Denmark Skibstekniske Konsulenter A/S I Likvidation (formerly known as Knud E Hansen A/S) v Ultrapolis 3000 Investments Ltd (formerly known as Ultrapolis 3000 Theme Park Investments Ltd)	High Court	Yes	[2010] 3 SLR 661	Singapore	Cited for the principle that a party who seeks to prove the matters under s 31(2) has to convince the court on a balance of probabilities.
Dallah Real Estate and Tourism Holding Co v The Ministry Of Religious Affairs, Government Of Pakistan	High Court	Yes	[2008] 2 Lloyd’s Rep 535	England and Wales	Cited for the principle that the phrase 'proves' must mean proof of the existence of the relevant matters on a balance of probabilities.
Dallah Estate and Tourism Holding Company v Ministry of Religious Affairs of the Government of Pakistan	Court of Appeal	Yes	[2010] 2 WLR 805	England and Wales	Cited for the principle that the phrase 'proves' must mean proof of the existence of the relevant matters on a balance of probabilities.
Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan	UK Supreme Court	Yes	[2011] 1 AC 763	United Kingdom	Cited for the principle that the language of s 103(2) of the Arbitration Act 1996 ('proves') pointed strongly to ordinary judicial determination of the issue.
Secretary of State for the Home Department v Rehman	House of Lords	Yes	[2003] 1 AC 153	United Kingdom	Cited for the principle that the level of probability for civil cases 'always means more likely than not'.
Gater Assets Ltd v Nak Naftogaz Ukrainiy	Court of Appeal	Yes	[2008] Bus LR 388	England and Wales	Cited for the principle that whenever the forum state’s public policy is engaged, the court may take a point of public policy on its own motion.
Sumitomo Bank Ltd v Thahir Kartika Ratna and others and another matter	High Court	Yes	[1992] 3 SLR(R) 638	Singapore	Cited for the principle that the law of evidence does not require fraud to be proved by oral and admissible evidence; in appropriate cases, fraud can be inferred from circumstantial evidence.
Chua Kwee Chen and others (as Westlake Eating House) and another v Koh Choon Chin	High Court	Yes	[2006] 3 SLR(R) 469	Singapore	Cited for the proposition that cogent and compelling evidence is needed to make good an allegation of fraud or dishonesty.
EFT Holdings, Inc and another v Marinteknik Shipbuilders (S) Pte Ltd and others	High Court	Yes	[2013] 1 SLR 1254	Singapore	Cited for the proposition that cogent and compelling evidence is needed to make good an allegation of fraud or dishonesty.
Alwie Handoyo v Tjong Very Sumito and another and another appeal	Court of Appeal	Yes	[2013] 4 SLR 308	Singapore	Cited for the proposition that cogent and compelling evidence is needed to make good an allegation of fraud or dishonesty.
In re H and others (Minors) (Sexual Abuse: Standard of Proof)	House of Lords	Yes	[1996] AC 563	United Kingdom	Cited for the principle that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not.
In re B (Children) (Care Proceedings: Standard of Proof) (CAFCASS intervening)	House of Lords	Yes	[2009] AC 11	United Kingdom	Cited for the principle that the inherent probability or improbability of an event is itself a factor to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred.
R (N) v Mental Health Review Tribunal (Northern Region) and others	Court of Appeal	Yes	[2006] QB 468	England and Wales	Cited for the principle that the civil standard of proof was 'flexible in its application'.
In re D (Secretary of State for Northern Ireland intervening)	House of Lords	Yes	[2008] 1 WLR 1499	United Kingdom	Cited for a concise statement of the English law on the topic of the civil standard of proof.
Do-Buy 925 Ltd v National Westminster Bank Plc	High Court	Yes	[2010] EWHC 2862 (QB)	England and Wales	Illustrates and applies the reasoning that the inherent unlikelihood of the existence of a dishonest scheme is diminished by the director’s antecedents in the context of establishing the threshold test.
Tay Bok Choon v Tahansan Sdn Bhd	Privy Council	Yes	[1987] 1 WLR 413	Malaysia	Illustrates the approach in practice where the court, guided by the rules of evidence, makes a final order based on affidavit evidence applying the civil standard of proof.
Quek Tiong Kheng and another v Chang Choong Khoon Mark and others	District Court	Yes	[2012] SGDC 76	Singapore	Cited for the District Court’s observation that in cases of fraud, direct evidence would be rare and circumstantial evidence would suffice.
R v Exall	N/A	Yes	(1866) 4 F & F 922	N/A	Cited for Pollock CB’s statement in relation to circumstantial evidence.

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

Arbitral Award
CIETAC
Enforcement
Public Policy
Fraud
Corruption
Settlement Agreement
International Arbitration Act
Balance of Probabilities
Cogent Evidence

15.2 Keywords

arbitration
enforcement
public policy
fraud
corruption
CIETAC
Singapore
International Arbitration Act

16. Subjects

Arbitration
International Arbitration
Enforcement of Arbitral Awards
Contract Law

17. Areas of Law

Arbitration Law
International Arbitration
Civil Procedure
Contract Law