BTN v BTP: Public Policy Exception & Setting Aside Arbitration Award for Breach of Natural Justice
In BTN and another v BTP and another, the Singapore Court of Appeal dismissed an appeal by BTN and BTO against the High Court's decision to dismiss their application to set aside a partial arbitral award. The appellants argued that the award should be set aside due to a breach of natural justice, conflict with public policy, and failure to decide matters within the scope of arbitration. The court found no merit in these contentions and dismissed the appeal.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses appeal to set aside arbitration award. The court found no breach of natural justice or public policy.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| BTN | Appellant, Plaintiff | Corporation | Appeal Dismissed | Lost | Davinder Singh, Fong Cheng Yee David, Gerald Paul Seah Yong Sing, Hanspreet Singh Sachdev |
| BTO | Appellant, Plaintiff | Corporation | Appeal Dismissed | Lost | Davinder Singh, Fong Cheng Yee David, Gerald Paul Seah Yong Sing, Hanspreet Singh Sachdev |
| BTP | Respondent, Defendant | Individual | Appeal Dismissed | Won | Michael Hwang, Chan Min Jian, Chew Kei-Jin, Tan Silin Stephanie |
| BTQ | Respondent, Defendant | Individual | Appeal Dismissed | Won | Michael Hwang, Chan Min Jian, Chew Kei-Jin, Tan Silin Stephanie |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| Judith Prakash | Justice of the Court of Appeal | Yes |
| Quentin Loh | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Davinder Singh | Davinder Singh Chambers LLC |
| Fong Cheng Yee David | Davinder Singh Chambers LLC |
| Gerald Paul Seah Yong Sing | Davinder Singh Chambers LLC |
| Hanspreet Singh Sachdev | Davinder Singh Chambers LLC |
| Michael Hwang | Michael Hwang Chambers LLC |
| Chan Min Jian | Michael Hwang Chambers LLC |
| Chew Kei-Jin | Ascendant Legal LLC |
| Tan Silin Stephanie | Ascendant Legal LLC |
4. Facts
- BTN acquired 100% ownership of an online travel agency group from BTP and BTQ.
- The Share Purchase Agreement included a Guaranteed Minimum Consideration and an Earn Out Consideration.
- BTP and BTQ were employed by BTO under Promoter Employment Agreements.
- BTO dismissed BTP and BTQ, citing grounds for With Cause termination.
- BTP and BTQ initiated proceedings in the Malaysian Industrial Court, which ruled their dismissals were without just cause.
- The respondents commenced arbitration proceedings against both the appellants under the SPA, claiming that they were dismissed Without Cause and were therefore entitled to receive their Earn Outs in the sum of US$35m.
- The arbitral tribunal held that the Malaysian Industrial Court's awards had res judicata effect, preventing the appellants from arguing With Cause termination.
5. Formal Citations
- BTN and another v BTP and another, Civil Appeal No 178 of 2019, [2020] SGCA 105
- BTN and another v BTP and another, , [2019] SGHC 212
6. Timeline
| Date | Event |
|---|---|
| Share Purchase Agreement signed | |
| Promoter Employment Agreements signed | |
| BTO gave notices to the respondents, dismissing them from their posts | |
| Respondents made representations to the Director General of Industrial Relations, Malaysia | |
| Director General sent letters to BTO and the respondents requesting them to attend a conciliation meeting | |
| Cases were referred to the Malaysian Industrial Court | |
| Awards against BTO were issued by the MIC in favor of the respondents | |
| Awards against BTO were issued by the MIC in favor of the respondents | |
| Respondents commenced non-compliance proceedings under the IRA against BTO | |
| MIC ordered BTO to pay the sums ordered under the MIC Awards within 30 days to the respondents | |
| BTO wrote to the President of the MIC to inform the MIC that BTO had complied with the MIC Awards and effected full payment as required | |
| Respondents' solicitors wrote to both BTO and BTN demanding payment of the sums due as Earn Out Consideration | |
| Respondents commenced arbitration proceedings against both the appellants under the SPA | |
| Tribunal conducted the hearing on legal issues | |
| Tribunal released the Partial Award | |
| Appellants filed OS 683 | |
| Judge released the Judgment | |
| Judgment reserved | |
| Judgment reserved |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court held that there was no breach of natural justice.
- Category: Procedural
- Sub-Issues:
- Failure to consider evidence
- Failure to provide opportunity to present case
- Public Policy Exception to Enforcement of Arbitral Award
- Outcome: The court held that enforcing the award would not violate Singapore's public policy.
- Category: Substantive
- Sub-Issues:
- Conflict with fundamental principles of justice
- Enforcement of award obtained through breach of contract
- Res Judicata
- Outcome: The court upheld the Tribunal's decision that the MIC awards had res judicata effect.
- Category: Substantive
- Sub-Issues:
- Issue estoppel
- Subject matter identity
- Scope of Arbitral Tribunal's Mandate
- Outcome: The court held that the Tribunal did not fail to decide matters within its mandate.
- Category: Jurisdictional
- Sub-Issues:
- Failure to decide matters within submission to arbitration
8. Remedies Sought
- Setting aside of Partial Arbitral Award
- Declaration that the Tribunal had jurisdiction to determine whether the respondents were terminated Without Cause
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Online Travel
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd | Court of Appeal | Yes | [2010] 3 SLR 1 | Singapore | Cited to establish that it is not open to the court to set aside an arbitral award on the freestanding ground that the Tribunal’s substantive decision on the merits was outrageous or irrational. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | Court of Appeal | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the four-stage inquiry to determine if a breach of natural justice occurred. |
| BNX v BOE | High Court | Yes | [2017] SGHC 289 | Singapore | Cited regarding the concept of 'subject matter identity' in the context of res judicata. |
| CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK | Court of Appeal | Yes | [2011] 4 SLR 305 | Singapore | Cited and distinguished regarding breach of natural justice where a party was not provided with a real opportunity to present its case. |
| PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA | Court of Appeal | Yes | [2007] 1 SLR(R) 597 | Singapore | Cited for the narrow interpretation of the public policy ground for setting aside arbitral awards. |
| AJU v AJT | Court of Appeal | Yes | [2011] 4 SLR 739 | Singapore | Cited for the principle that errors of law and/or fact do not per se engage the public policy of Singapore. |
| Swissbourgh Diamond Mines (Pty) Ltd and others v Kingdom of Lesotho | Court of Appeal | Yes | [2019] 1 SLR 263 | Singapore | Cited to distinguish between jurisdiction and admissibility in the context of arbitration. |
| BBA and others v BAZ and another appeal | Court of Appeal | Yes | [2020] 2 SLR 453 | Singapore | Cited to explain the 'tribunal versus claim' test for distinguishing between jurisdiction and admissibility. |
| The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd (nTan Corporate Advisory Pte Ltd and others, other parties) and another appeal | Court of Appeal | Yes | [2015] 5 SLR 1104 | Singapore | Cited to explain the concepts of res judicata and jurisdiction. |
| AKN and another v ALC and others and other appeals | Court of Appeal | Yes | [2015] 3 SLR 488 | Singapore | Cited for the policy of minimal curial intervention in arbitration matters. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
| Industrial Relations Act 1967 (Act 177) | Malaysia |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration
- Arbitral Award
- Public Policy
- Breach of Natural Justice
- Res Judicata
- Issue Estoppel
- Share Purchase Agreement
- Promoter Employment Agreement
- Earn Out Consideration
- Without Cause Termination
- With Cause Termination
- Malaysian Industrial Court
- Singapore International Arbitration Centre
15.2 Keywords
- Arbitration
- Public Policy
- Natural Justice
- Res Judicata
- Singapore
- Contract
- Employment
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- Civil Procedure
- Contract Law
- International Arbitration