Asiana Airlines v. Gate Gourmet Korea: Setting Aside Arbitration Award for Contract Interpretation
In the Singapore International Commercial Court, Asiana Airlines, Inc. sought to set aside a Final Award in favor of Gate Gourmet Korea Co, Ltd. The dispute arose from a disagreement over the interpretation of a Catering Agreement's pricing mechanism. Asiana argued that the Tribunal failed to properly consider expert evidence and an exhibit, leading to a breach of natural justice. Simon Thorley IJ dismissed the originating summons, finding no grounds to set aside the award and ordered Asiana Airlines to pay costs to Gate Gourmet Korea Co, Ltd.
1. Case Overview
1.1 Court
Singapore International Commercial Court1.2 Outcome
Originating Summons dismissed with costs.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Asiana Airlines sought to set aside an arbitration award. The court dismissed the application, finding no breach of natural justice or failure to consider key issues.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Asiana Airlines, Inc | Plaintiff | Corporation | Originating Summons Dismissed | Lost | |
| Gate Gourmet Korea Co, Ltd | Defendant | Corporation | Originating Summons Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Simon Thorley | International Judge | Yes |
4. Counsels
4. Facts
- Asiana Airlines and Gate Gourmet Korea Co, Ltd were parties to a Catering Agreement governed by Korean law.
- A dispute arose over the interpretation of Annex 1.4 of the Catering Agreement, specifically regarding the pricing mechanism.
- Asiana sought to set aside the Final Award in an Arbitration, alleging a breach of natural justice and failure to consider all issues.
- Asiana argued that the Tribunal failed to properly consider the expert report of Professor Kwon on Korean law.
- Asiana contended that the Tribunal failed to consider Exhibit C-333, an Excel sheet setting out the net profitability projection for the Agreement.
- The Tribunal allowed GGK’s claims and dismissed Asiana’s counterclaims in the Award.
- The Catering Agreement contained an initial business plan that set out calculations for the pricing mechanism for the catering services.
5. Formal Citations
- Asiana Airlines, Inc v Gate Gourmet Korea Co, Ltd, Originating Summons No 11 of 2021, [2022] SGHC(I) 8
6. Timeline
| Date | Event |
|---|---|
| Catering services provided to Asiana by LSG Sky Chefs Korea Co Ltd commenced. | |
| Arbitration commenced. | |
| Catering Agreement signed between Asiana and GGK. | |
| Final Award issued in Arbitration. | |
| Addendum to Final Award issued. | |
| Originating Summons filed in the General Division of the High Court. | |
| Originating Summons transferred to the Singapore International Commercial Court. | |
| Oral hearing commenced. | |
| Oral hearing concluded. | |
| Judgment reserved. | |
| Judgment issued. | |
| Terms of Reference of the Arbitration dated |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court found no breach of natural justice.
- Category: Procedural
- Sub-Issues:
- Failure to consider expert evidence
- Failure to consider all issues
- Interpretation of Contract
- Outcome: The court upheld the Tribunal's interpretation of the contract.
- Category: Substantive
- Sub-Issues:
- Ambiguity of contract terms
- Application of Korean law principles
- Effective interpretation
- Setting Aside Arbitration Award
- Outcome: The court dismissed the application to set aside the award.
- Category: Procedural
- Sub-Issues:
- Grounds for setting aside
- Application of Model Law
- Jurisdictional issues
8. Remedies Sought
- Setting Aside of Arbitration Award
- Costs
9. Cause of Actions
- Breach of Contract
- Setting Aside of Arbitration Award
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Airline
- Catering
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| CRW Joint Operation v PT Perusahan Gas Negara (Pesero) TBK | High Court | Yes | [2011] 4 SLR 305 | Singapore | Cited for the principle that failure to decide matters submitted to the tribunal is a failure to exercise authority and could be a breach of Article 34(2)(a)(iii). |
| CKG v CKH | Singapore International Commercial Court | Yes | [2021] SGHC (I) [5] | Singapore | Cited for the principle that there is no requirement for an issue to be formally pleaded before a party may invoke Article 34(2)(a)(iii). |
| BLC and others v BLB and another | High Court | Yes | [2014] 4 SLR 79 | Singapore | Cited as an example where the Court may consider parties’ pleadings, list of issues, written and oral submissions to determine the issues that were submitted to the Tribunal. |
| TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd | High Court | Yes | [2013] 4 SLR 972 | Singapore | Cited for the principle that the tribunal is not obliged to deal with each point made by a party – what matters is the resolution of an issue either expressly or implicitly by the Tribunal. |
| AKN and another v ALC | High Court | Yes | [2015] 3 SLR 488 | Singapore | Cited for the principle that it would usually be a matter of inference, rather than of explicit indication, that the Tribunal wholly missed one or more important pleaded issues. |
| Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd | High Court | Yes | [2010] 3 SLR 162 | Singapore | Cited for the principle that mere errors of law or even fact are not sufficient to warrant the setting aside of an arbitral award under Article 34(2)(a)(iii) of the Model Law. |
| Government of the Republic of the Philippines v Philippine International Air Terminals Co, Inc | Court of Appeal | Yes | [2007] 1 SLR(R) 278 | Singapore | Cited for the principle that the right to be heard is an aspect of the rules of natural justice under Section 24(b) of the IAA and also an aspect of being able to present one’s case within the meaning of Article 34(2)(a)(ii) of the Model Law. |
| ADG v ADI | High Court | Yes | [2014] 3 SLR 481 | Singapore | Cited for the principle that the right to be heard is an aspect of the rules of natural justice under Section 24(b) of the IAA and also an aspect of being able to present one’s case within the meaning of Article 34(2)(a)(ii) of the Model Law. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | High Court | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the principle that to successfully invoke Section 24(b) and Article 34(2)(a)(ii), the Court must be satisfied that the Tribunal breached a rule of natural justice in making the arbitral award. |
| China Machine New Energy Corp v Jaguar Energy Guatemala LLC | Court of Appeal | Yes | [2020] 1 SLR 695 | Singapore | Cited for the principle that the threshold for finding of breach of natural justice is a high one, and it is only in exceptional cases that a court will find that threshold crossed. |
| CKG v CKH | Singapore International Commercial Court | Yes | [2021] SGHC(I) 5 | Singapore | Cited for the principle that a failure by the tribunal to even consider an important pleaded issue is a breach of natural justice, as well as a breach of Art 34(2)(a)(iii) of the Model Law. |
| CDX v CDZ | High Court | Yes | [2020] SGHC 257 | Singapore | Cited for the principle that it is not a breach of natural justice where the matters complained of are the result of the party’s own conduct. |
| CMJ v CML | Singapore International Commercial Court | Yes | [2021] SGHC(I) 20 | Singapore | Cited for the principle that whether there has been a breach of natural justice is to be assessed on the material that was before the tribunal in the arbitration. |
| TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd | High Court | Yes | [2013] 4 SLR 972 | Singapore | Cited for the principle that an arbitral tribunal is not obliged to deal with every argument. |
| Ascot Commodities NV v Olam International Ltd | High Court of Justice | Yes | [2002] CLC 277 | England and Wales | Cited for the principle that an award should deal, however concisely, with all essential issues. |
| Hussman (Europe) Ltd v Al Ameen Development and Trade Co | High Court of Justice | Yes | [2000] 2 Lloyd’s Rep 83 | England and Wales | Cited for the principle that the arbitral tribunal need not deal with each point made by a party in an arbitration. |
| SEF Construction Pte Ltd v Skoy Connected Pte Ltd | High Court | Yes | [2010] 1 SLR 733 | Singapore | Cited for the principle that natural justice requires that the parties should be heard; it does not require that they be given responses on all submissions made. |
| BRS v BRQ and another and another appeal | Court of Appeal | Yes | [2021] 1 SLR 390 | Singapore | Cited for the principle that if the Tribunal had reached a conclusion based on one argument, it did not need to go on to consider other arguments which, by then, had become academic. |
| GD Midea Air Conditioning Equipment Co Ltd v Tornado Consumer Goods Ltd and another matter | High Court | Yes | [2018] 4 SLR 271 | Singapore | Cited for the principle that the Tribunal has no jurisdiction to decide any issue that is not referred to it for determination. |
| Arjowiggins HKK2 Ltd v X Co | Court of First Instance of the High Court | Yes | [2022] HKCFI 128 | Hong Kong | Cited for the principle that the Tribunal has no jurisdiction to decide any issue that is not referred to it for determination. |
| CKH v CKG and another matter | Court of Appeal | Yes | [2022] SGCA(I) 4 | Singapore | Cited for the principle that matters can arise which are or become within the scope of the issues submitted for arbitral decision, even though they are not pleaded. |
| PT Prima International Development v Kempinski Hotels SA and other appeals | Court of Appeal | Yes | [2012] 4 SLR 98 | Singapore | Cited for the principle that pleadings provide a convenient way for the parties to define the jurisdiction of the arbitrator. |
| CDM and another v CDP | Court of Appeal | Yes | [2021] 2 SLR 235 | Singapore | Cited for the principle that the question of what matters are within the scope of the parties’ submission to arbitration is answerable by reference to five sources. |
| CBX and another v CBZ and others | Court of Appeal | Yes | [2021] SGCA(I) 3 | Singapore | Cited for the principle that the conduct of parties to litigation before an arbitrator or judge may and does on occasion widen the scope of the issues falling for determination in a way which deprives a pleading objection of any force. |
| Lao Holdings NV v Government of the Lao People’s Democratic Republic and another matter | Singapore International Commercial Court | Yes | [2022] SGHC(I) 6 | Singapore | Cited for the principle that the fundamental purpose of an award of costs in the SICC under O 110 of the ROC is to compensate the successful party for reasonable costs incurred in the legal proceedings. |
| Three Rivers District Council v The Governor and Co of the Bank of England (No 6) | High Court of Justice | Yes | [2006] EWHC 816 (Comm) | England and Wales | Cited for the principle that in deciding whether to order indemnity costs, the court should have regard to all the circumstances of the case, and whether a party has behaved unreasonably. |
| Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties) | Court of Appeal | Yes | [2011] 1 SLR 582 | Singapore | Cited for the principle that costs on an indemnity basis should only be ordered in a special case or where there are exceptional circumstances. |
| BNP Paribas SA v Jacob Agam and another | Court of Appeal | Yes | [2018] 3 SLR 1 | Singapore | Cited for the principle that a special case for indemnity costs might exist where the parties’ contractual agreement so provides. |
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
- Catering Agreement
- Pricing Mechanism
- Korean Law
- Natural Justice
- Interpretation of Contract
- Net Profit
- Business Plan
- International Arbitration Act
- UNCITRAL Model Law
- Abuse of Power of Representation
- Effective Interpretation
15.2 Keywords
- arbitration
- contract interpretation
- singapore
- international commercial court
- setting aside award
- breach of natural justice
17. Areas of Law
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure