AQZ v ARA: Setting Aside Arbitral Award for Lack of Jurisdiction & Expedited Procedure

In AQZ v ARA, the Singapore High Court addressed an application by AQZ (the Supplier) to set aside an arbitral award in favor of ARA (the Buyer). The dispute arose from a coal sale agreement. AQZ challenged the tribunal's jurisdiction and the use of expedited procedures. The court, per Judith Prakash J, dismissed AQZ's application, finding a valid arbitration agreement and no procedural irregularities.

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

AQZ, a mining company, sought to set aside an arbitral award against ARA, arguing lack of jurisdiction and improper expedited procedure. The court dismissed the application.

1.7 Decision Date

12 February 2015

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
AQZ	Plaintiff	Corporation	Application dismissed	Lost	Thomas Tan of Haridass Ho & Partners Ong Shao Rong of Haridass Ho & Partners
ARA	Defendant	Corporation	Application dismissed	Won	Lawrence Teh of Rodyk & Davidson LLP Melissa Thng of Rodyk & Davidson LLP Sim Junhui of Rodyk & Davidson LLP

3. Judges

Judge Name	Title	Delivered Judgment
Judith Prakash	Judge	Yes

4. Counsels

Counsel Name	Organization
Thomas Tan	Haridass Ho & Partners
Ong Shao Rong	Haridass Ho & Partners
Lawrence Teh	Rodyk & Davidson LLP
Melissa Thng	Rodyk & Davidson LLP
Sim Junhui	Rodyk & Davidson LLP

4. Facts

AQZ and ARA discussed two sale and purchase agreements for Indonesian non-coking coal in November 2009.
The parties agreed on terms for the First Shipment of 50,000 metric tonnes of coal at US$56/mt.
A dispute arose over whether a contract for a Second Shipment of the same quantity was concluded.
ARA issued a Notice of Arbitration claiming US$706,750 plus interest and costs for breach of contract.
AQZ challenged the existence of an arbitration agreement and objected to the Expedited Procedure.
The SIAC President allowed ARA's application for Expedited Procedure.
The Arbitrator found that the tribunal had jurisdiction and that AQZ was liable for breach of contract.

5. Formal Citations

AQZ v ARA, Originating Summons No 530 of 2014 and Summons No 3168 of 2014, [2015] SGHC 49

6. Timeline

Date	Event
2009-11-01	Parties discussed sale and purchase agreements.
2009-12-07	Contract for the First Shipment concluded.
2009-12-08	Parties verbally agreed on terms of the Second Shipment.
2009-12-09	Written contract for First Shipment signed.
2009-12-11	Buyer requested changes to coal specifications.
2009-12-15	Supplier rejected changed coal specifications.
2009-12-16	Dinner meeting in Jakarta to discuss changed coal specifications.
2009-12-18	Buyer sent Supplier draft contract with changes.
2009-12-22	Buyer asked Supplier to sign and return the Second Shipment contract.
2009-12-23	Supplier informed Buyer it could not do the Second Shipment.
2010-01-05	Buyer asked for confirmation of laycan for the Second Shipment.
2010-01-11	Coal Pulse nominated vessel for the Sub-sale Contract.
2010-01-15	Buyer nominated vessel for delivery of coal under the Second Shipment.
2010-01-21	Coal Pulse's lawyers terminated the Sub-sale Contract.
2010-02-02	Meeting held in Jakarta.
2013-03-20	Buyer issued Notice of Arbitration.
2013-03-21	Buyer applied to SIAC for Expedited Procedure.
2013-04-18	Supplier challenged the existence of an arbitration agreement.
2013-05-20	SIAC allowed Buyer's application for Expedited Procedure.
2013-07-08	SIAC President appointed an arbitrator.
2013-09-10	Arbitrator made a procedural order to address the Supplier’s plea of lack of jurisdiction.
2013-10-16	Preliminary hearing conducted.
2013-10-17	Preliminary hearing conducted.
2013-10-18	Preliminary hearing conducted.
2013-11-22	Final hearing held.
2014-05-12	Arbitrator issued the Award.
2014-06-11	Supplier took out OS 530 to have the Award reversed.
2014-06-26	Buyer took out Sum 3168.
2014-09-23	Court granted Supplier leave to amend the Second Prayer.
2015-02-13	Judgment reserved.

7. Legal Issues

Jurisdiction of Arbitral Tribunal
- Outcome: The court held that there was a valid arbitration agreement and the arbitral tribunal had jurisdiction.
- Category: Jurisdictional
- Sub-Issues:
  - Validity of arbitration agreement
  - Applicability of International Arbitration Act
  - Retrospective application of laws
Validity of Arbitration Agreement
- Outcome: The court found that the arbitration agreement was valid and satisfied the requirements of the International Arbitration Act.
- Category: Substantive
- Sub-Issues:
  - Agreement in writing
  - Incorporation of arbitration clause
  - Separability of arbitration clause
Expedited Procedure in Arbitration
- Outcome: The court held that the expedited procedure was properly applied and the appointment of a sole arbitrator was in accordance with the parties' agreement.
- Category: Procedural
- Sub-Issues:
  - Applicability of SIAC Rules
  - Appointment of sole arbitrator
  - Compliance with parties' agreement

8. Remedies Sought

Setting aside of arbitral award
Rehearing before three arbitrators
Stay of arbitral proceedings

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Arbitration
International Arbitration
Arbitration
Commercial Litigation

11. Industries

Mining
Commodity Trading
Shipping

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appeal	Court of Appeal	Yes	[2014] 1 SLR 372	Singapore	Cited for the standard of review to be applied when reviewing the tribunal’s decision on whether an arbitration agreement had been formed between the relevant parties.
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 tribunal’s own view of its jurisdiction has no legal or evidential value before a court that has to determine that question.
Azov Shipping Co v Baltic Shipping Co	English Court	Yes	[1999] 1 Lloyd’s Rep 68	England	Cited regarding the court's power to order oral evidence in an arbitration application if there was a dispute as to fact.
Insigma Technology Co Ltd v Alstom Technology Ltd	High Court	Yes	[2009] 1 SLR(R) 23	Singapore	Cited for the principle that witnesses who had already been heard by the tribunal will only be called back when necessary.
Sandz Solutions (Singapore) Pte Ltd v Strategic Worldwide Assets Ltd and others	Court of Appeal	Yes	[2014] 3 SLR 562	Singapore	Cited for the principle that improvements to the record, such as verbatim transcripts that are electronically recorded, have shrunk some of the previously exclusive advantages of triers of fact.
Astra SA Insurance and Reinsurance Co v Sphere Drake Insurance Ltd	English Court	Yes	[2000] 2 Lloyd’s Rep 550	England	Cited as an example where witnesses were selectively recalled to give oral evidence due to unique circumstances involving Romanian law.
Electrosteel Castings Ltd v Scan-Trans Shipping & Chartering Sdn Bhd	English Court	Yes	[2003] 1 Lloyd’s Rep 190	England	Cited for the principle that the court would carry out a re-hearing rather than simply a review when an arbitral award is challenged for lack of jurisdiction.
OCBC Capital Investment Asia Ltd v Wong Hua Choon	Court of Appeal	Yes	[2012] 2 SLR 311	Singapore	Cited for the principle that contemplations of a written contract per se do not preclude the existence of a binding oral contract.
Navigator Investment Services Ltd v Acclaim Insurance Brokers Pte Ltd	Court of Appeal	Yes	[2010] 2 SLR 25	Singapore	Cited for the presumption that reference to rules of a particular tribunal in an arbitration clause refers to such rules as are applicable at the date of commencement of arbitration and not at the date of contract, provided that the rules contain mainly procedural provisions.
Black & Vetach Singapore Pte Ltd v Jurong Engineering Ltd	High Court	Yes	[2004] 4 SLR 19	Singapore	Cited for the presumption that reference to rules of a particular tribunal in an arbitration clause refers to such rules as are applicable at the date of commencement of arbitration and not at the date of contract, provided that the rules contain mainly procedural provisions.
Bunge SA v Kruse	English Court	Yes	[1979] 1 Lloyd’s Rep 279	England	Cited for the rationale behind the presumption that reference to rules of a particular tribunal in an arbitration clause refers to such rules as are applicable at the date of commencement of arbitration and not at the date of contract, provided that the rules contain mainly procedural provisions.
Car & Cars Pte Ltd v Volkswagen AG	High Court	Yes	[2010] 1 SLR 625	Singapore	Cited to show that the inclusion of the phrase “for the time being in force” in the arbitration clause indicated that parties intended to refer to rules that could not be precisely identified at the time of contracting.
NCC International AB v Land Transport Authority of Singapore	High Court	Yes	[2009] 1 SLR(R) 985	Singapore	Cited for the principle that where the agreement to arbitrate provided for a sole arbitrator, r 5.1 did not vest the Registrar with the discretion to appoint three arbitrators.
W Company v Dutch Company and Dutch Holding Company	Singapore International Arbitration Centre	Yes	[2012] 1 SAA 97	Singapore	Cited for the principle that the parties chose the SIAC Rules to govern the arbitration and they accepted the entirety of the SIAC Rules including the Expedited Procedure in Rule 5 together with the powers that the Rule reserves to the Chairman and Registrar of the SIAC to administer and guide the proceedings.
Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd	Court of Appeal	Yes	[2015] 1 SLR 114	Singapore	Cited for the principle that while prejudice is not a legal requirement for an award to be set aside pursuant to Art 34(2)(a)(iv), it is a relevant factor that the supervisory court considers in deciding whether the breach in question is serious and thus whether to exercise its discretionary power to set aside the award for the breach.

13. Applicable Rules

Rule Name
Arbitration Rules of the SIAC (4th Ed, 1 July 2010)
Arbitration Rules of the SIAC (3rd Ed, 1 July 2007)

14. Applicable Statutes

Statute Name	Jurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)	Singapore
International Arbitration (Amendment) Act 2012 (Act 12 of 2012)	Singapore
Interpretation Act (Cap 1, 2002 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Arbitration agreement
Expedited procedure
Jurisdiction
SIAC Rules
In writing
Second shipment
Coal
Laycan
Force majeure

15.2 Keywords

arbitration
arbitral award
jurisdiction
expedited procedure
coal
contract
SIAC
International Arbitration Act

17. Areas of Law

Area Name	Relevance Score
Arbitration	95
International Arbitration	90
Contract Law	70
Breach of Contract	60
Jurisdiction	60
International Commercial Law	50
Commercial Disputes	40

16. Subjects

Arbitration
Contract Law
International Trade
Civil Procedure