CFJ v CFL: Setting Aside Arbitral Award for Oil & Gas Share Sale Dispute
In CFJ and CFK v CFL and CFM, the Singapore International Commercial Court dismissed applications by CFJ and CFK to set aside two partial arbitral awards and to remove the Presiding Arbitrator in a dispute arising from the sale of shares in an oil and gas subsidiary. The Purchaser, CFL and CFM, alleged deceit and breach of contract by the Seller, CFJ and CFK, concerning representations made about the subsidiary's reserves and production capabilities. The court found no grounds for apparent bias, breach of agreed arbitral procedure, excess of jurisdiction, or breach of natural justice, upholding the arbitral awards.
1. Case Overview
1.1 Court
SINGAPORE INTERNATIONAL COMMERCIAL COURT OF THE REPUBLIC OF SINGAPORE1.2 Outcome
Applications dismissed in their entirety.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses applications to set aside arbitral awards in a dispute over the sale of shares in an oil and gas subsidiary, concerning deceit and breach of contract.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| CFJ | Plaintiff | Corporation | Applications dismissed in their entirety | Lost | Yeo Khirn Hai Alvin, Chan Hock Keng, Jill Ann Koh Ying, Low Sze Hui Jasmine, Ho Yi Jie, Tang Xi-Rui Charlotte, Liang Fang Ling Elisabeth |
| CFK | Plaintiff | Corporation | Applications dismissed in their entirety | Lost | Yeo Khirn Hai Alvin, Chan Hock Keng, Jill Ann Koh Ying, Low Sze Hui Jasmine, Ho Yi Jie, Tang Xi-Rui Charlotte, Liang Fang Ling Elisabeth |
| CFL | Defendant | Corporation | Applications dismissed in their entirety | Won | Toby Landau, Liew Wey-Ren Colin |
| CFM | Defendant | Corporation | Applications dismissed in their entirety | Won | Toby Landau, Liew Wey-Ren Colin |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Kannan Ramesh | Judge of the Appellate Division | Yes |
| Dominique Hascher | International Judge | No |
| Arjan Kumar Sikri | International Judge | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Yeo Khirn Hai Alvin | WongPartnership LLP |
| Chan Hock Keng | WongPartnership LLP |
| Jill Ann Koh Ying | WongPartnership LLP |
| Low Sze Hui Jasmine | WongPartnership LLP |
| Ho Yi Jie | WongPartnership LLP |
| Tang Xi-Rui Charlotte | WongPartnership LLP |
| Liang Fang Ling Elisabeth | WongPartnership LLP |
| Toby Landau | Essex Court Chambers Duxton (Singapore Group Practice) |
| Liew Wey-Ren Colin | Colin Liew LLC |
| Davinder Singh | Davinder Singh Chambers LLC |
| Lin Xianyang Timothy | Davinder Singh Chambers LLC |
| Fong Cheng Yee David | Davinder Singh Chambers LLC |
| Tang Xi-Rui Charlotte | WongPartnership LLP |
| Toby Landau | Duxton Hill Chambers (Singapore Group Practice) |
4. Facts
- CFJ and CFK (the Seller) and CFL and CFM (the Purchaser) are corporations in the oil and gas industry.
- On 23 July 2012, the Purchaser acquired a 49% stake in one of the Seller’s subsidiaries via a Share Purchase Agreement.
- The Purchaser alleged the Seller deceived it into investing in the Subsidiary by making misrepresentations.
- The Purchaser commenced arbitration proceedings against the Seller for the tort of deceit.
- The Arbitration was bifurcated into a liability phase and an assessment of damages phase.
- The Seller was dissatisfied with the Second Partial Award and Third Partial Award and filed originating summonses to set aside the awards.
- The Seller also filed an originating summons to remove the Presiding Arbitrator on the grounds of apparent bias.
5. Formal Citations
- CFJ and another v CFL and another and other matters, , [2023] SGHC(I) 1
6. Timeline
| Date | Event |
|---|---|
| Share Purchase Agreement signed. | |
| Completion of the Share Purchase Agreement. | |
| Arbitration commenced by the Purchaser. | |
| Seller filed its Response to the Notice of Arbitration. | |
| Purchaser filed its Statement of Claim. | |
| Seller filed its Statement of Defence. | |
| Seller submitted an application for determination of the Warranty Claim as a preliminary issue. | |
| Tribunal ordered the Arbitration to be bifurcated. | |
| Purchaser filed its Statement of Reply. | |
| Tribunal heard submissions on the application for determination of the preliminary issue. | |
| Seller filed a Statement of Rejoinder. | |
| Purchaser submitted expert reports. | |
| Tribunal issued the First Partial Award dismissing the Warranty Claim. | |
| Parties filed Pre-Hearing Written Submissions. | |
| Hearing in Singapore began. | |
| Hearing in Singapore concluded. | |
| Further hearing in London began. | |
| Further hearing in London concluded. | |
| Parties made oral closing submissions. | |
| Parties made oral closing submissions. | |
| President appointed to a panel of experts. | |
| Parties filed Post-Hearing Briefs. | |
| Replies to the Post-Hearing Briefs were filed. | |
| Tribunal delivered the Second Partial Award. | |
| Seller filed a Notice of Challenge to the Singapore International Arbitration Centre. | |
| President disclosed his appointment to the Panel. | |
| Seller filed Originating Summons No 7 of 2020. | |
| SIAC released its decision, dismissing the challenge. | |
| Seller filed Originating Summons No 8 of 2020. | |
| Tribunal issued the Third Partial Award. | |
| Seller filed Originating Summons No 9 of 2021. | |
| Hearing date. | |
| Judgment reserved. |
7. Legal Issues
- Apparent Bias
- Outcome: The court found no appearance of bias on the part of the President of the Tribunal.
- Category: Procedural
- Related Cases:
- [2018] 2 SLR 1156
- Breach of Agreed Arbitral Procedure
- Outcome: The court found no breach of an agreed arbitral procedure.
- Category: Procedural
- Related Cases:
- [2015] 1 SLR 114
- Excess of Jurisdiction
- Outcome: The court found that the Tribunal did not act in excess of its jurisdiction.
- Category: Jurisdictional
- Related Cases:
- [2021] 2 SLR 1279
- Breach of Natural Justice
- Outcome: The court found no breach of natural justice.
- Category: Procedural
- Related Cases:
- [2007] 3 SLR(R) 86
- [2020] 1 SLR 695
- Fraudulent Misrepresentation
- Outcome: The Tribunal ruled in the Purchaser’s favour on the Deceit Claim on Reserves and the Deceit Claim on Production.
- Category: Substantive
8. Remedies Sought
- Setting Aside of Arbitral Awards
- Removal of Presiding Arbitrator
- Damages to be assessed
9. Cause of Actions
- Breach of Contractual Warranties
- Tort of Deceit
- Contractual Indemnification
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Oil and Gas
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| CAJ and another v CAI and another appeal | Court of Appeal | Yes | [2022] 1 SLR 505 | Singapore | Cited for the principle that awards are set aside only in exceptional cases and the need to respect the autonomy of arbitration proceedings. |
| BOI v BOJ | N/A | No | [2018] 2 SLR 1156 | Singapore | Cited for the restatement of the law on apparent bias in Singapore, focusing on the perspective of a fair-minded and informed observer. |
| Sim Yong Teng and another v Singapore Swimming Club | N/A | Yes | [2016] 2 SLR 489 | Singapore | Cited in the context of a management committee of a social club regarding the perceived independence and impartiality of the adjudicator. |
| Wong Kok Chin v Singapore Society of Accountants | N/A | Yes | [1989] 2 SLR(R) 633 | Singapore | Cited in the context of a disciplinary tribunal regarding the perceived independence and impartiality of the adjudicator. |
| X S.p.A v. Y B.V | Swiss Federal Tribunal | Yes | 4A 386/2015 | Switzerland | Cited for the principle that the assurance of the independence and impartiality of a tribunal is a pillar of any State ruled by law. |
| Bolkiah v Brunei Darussalam | Privy Council | No | [2007] UKPC 62 | United Kingdom | Discussed in relation to the allegation of apparent bias based on the prospects of an extension of a judge's term depending on a party involved in the proceedings. |
| Almazeedi v Penner | Privy Council | No | [2018] UKPC 3 | United Kingdom | Discussed in relation to the allegation of apparent bias based on a judge's appointment to a court in a country with connections to a party involved in the proceedings. |
| Halliburton Company v Chubb Bermuda Insurance Ltd | United Kingdom Supreme Court | Yes | [2020] UKSC 48 | United Kingdom | Cited for the principle that an arbitrator only needs to disclose appointments and matters which would cause a reasonable observer to conclude that there was a real possibility of a lack of impartiality and that the court must assess the circumstances as they exist at the date of the hearing of the application to remove the arbitrator. |
| Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd | N/A | Yes | [2015] 1 SLR 114 | Singapore | Cited for the principles on breach of agreed arbitral procedure, including the need to show an agreement, a breach, and material prejudice. |
| CDM and another v CDP | N/A | Yes | [2021] 2 SLR 235 | Singapore | Cited for the principle that a challenge on excess of jurisdiction may be accompanied by a challenge on breach of natural justice. |
| Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and another | N/A | Yes | [2021] 2 SLR 1279 | Singapore | Cited for the principles on excess of jurisdiction, including the consideration of the scope of submission to arbitration and the court's residual discretion. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | N/A | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the principles on breach of natural justice, including the right to be heard effectively and the test for foreseeability of the award's reasoning. |
| China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another | N/A | Yes | [2020] 1 SLR 695 | Singapore | Cited for the principles on breach of natural justice, including the right to be heard effectively and the test for foreseeability of the award's reasoning. |
| AKN and another v ALC and others and other appeals | N/A | Yes | [2015] 3 SLR 488 | Singapore | Cited for the principle that a tribunal's failure to consider an important issue may constitute a breach of natural justice. |
| Browne v Dunn | N/A | No | 6 R 67 | N/A | Cited for the principle that the rule in Browne v Dunn does not apply with as much rigour in arbitration. |
| BQP v BQQ | N/A | Yes | [2018] 4 SLR 1364 | Singapore | Cited for the principle that the rule in Browne v Dunn does not apply with as much rigour in arbitration. |
| TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd | N/A | Yes | [2013] 4 SLR 972 | Singapore | Cited for the principle that tribunals are only required to determine essential issues. |
| BZW and another v BZV | N/A | Yes | [2022] 1 SLR 1080 | Singapore | Cited for the principle that tribunals are only required to determine essential issues. |
| Prometheus Marine Pte Ltd v King, Ann Rita | N/A | Yes | [2018] 1 SLR 1 | Singapore | Cited for the principle that a practical view must be taken regarding the substance of the dispute being referred to arbitration. |
| CJA v CIZ | N/A | Yes | [2022] 2 SLR 557 | Singapore | Cited for the principle that the court is to have regard to the totality of what was presented to the tribunal and consider whether, in the light of all that, these points were live. |
| CBX and another v CBZ and others | N/A | Yes | [2022] 1 SLR 47 | Singapore | Cited for the principle that where a jurisdictional challenge has been raised, it must lead to a jurisdictional ruling by the tribunal. |
| Phoenixfin Pte Ltd and others v Convexity Ltd | N/A | Yes | [2022] 2 SLR 23 | Singapore | Cited for the principle that whether a breach of natural justice is made out depends on whether the aggrieved party has been given a fair opportunity to deal with an issue that has been raised in the arbitration. |
| Senda International Capital Ltd v Kiri Industries Ltd | Court of Appeal | Yes | [2022] SGCA(I) 10 | Singapore | Cited for guidance on submissions on costs. |
13. Applicable Rules
| Rule Name |
|---|
| SIAC Rules 2013 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
| UNCITRAL Model Law on International Commercial Arbitration | N/A |
| Regulation S-X Part 210 Rule 4-10 of the United States Code of Federal Regulations | United States |
15. Key Terms and Keywords
15.1 Key Terms
- Share Purchase Agreement
- Arbitration Agreement
- Pre-Effective Date Indemnity Clause
- Reserves Representation
- Production Representation
- SEC Standards
- Final Investment Decision
- Production Efficiency
- Joint Reserves Report
- Five Topics
- 2P Reserves
- 3P Reserves
- Developed Reserves
- Undeveloped Reserves
15.2 Keywords
- arbitration
- share purchase agreement
- oil and gas
- misrepresentation
- setting aside award
- apparent bias
- Singapore International Commercial Court
16. Subjects
- Arbitration
- Contract Law
- Oil and Gas Law
- Share Purchase Agreements
- Misrepresentation
17. Areas of Law
- Arbitration Law
- International Commercial Arbitration
- Civil Procedure