DBX & DBY v DBZ: Setting Aside Arbitration Award - Margin Financing Facility Dispute

DBX and DBY applied to the Singapore International Commercial Court to set aside two arbitration awards in favor of DBZ, concerning a margin financing facility agreement. DBX was held liable as principal debtor, and DBY as guarantor. The court, presided over by Roger Giles IJ, dismissed the application, finding it was filed out of time and that the grounds for setting aside the awards were not substantiated.

1. Case Overview

1.1 Court

Singapore International Commercial Court

1.2 Outcome

Application dismissed.

1.3 Case Type

Arbitration

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Application to set aside an arbitration award concerning a margin financing facility agreement. The court dismissed the application.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
DBXApplicantCorporationApplication dismissedLost
DBYApplicantCorporationApplication dismissedLost
DBZRespondentCorporationApplication dismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Roger GilesInternational JudgeYes

4. Counsels

Counsel NameOrganization
Ang Cheng Ann AlfonsoA.Ang, Seah & Hoe
James Ch’ng Chin LeongA.Ang, Seah & Hoe
Foo Hsien WengWongPartnership LLP
Chong Wan Yee MonicaWongPartnership LLP
Leau Jun LiWongPartnership LLP
Wong Chun MunWongPartnership LLP

4. Facts

  1. DBX is an investment holding company incorporated in the British Virgin Islands.
  2. DBY is the sole director and beneficial shareholder of DBX.
  3. DBZ is a company incorporated in Singapore, carrying on the business of brokering stocks and futures.
  4. In December 2017, DBZ provided DBX with a margin financing facility.
  5. DBY signed a separate Deed of Guarantee and Indemnity guaranteeing the Account.
  6. The Letter and the Guarantee contained arbitration clauses.
  7. DBX utilized the facility for trading on the Hong Kong Stock Exchange.
  8. DBX and DBY did not participate in the arbitrations in any way.
  9. The Tribunal issued awards dated 18 February 2023 in both arbitrations.
  10. The Tribunal subsequently issued corrections to both awards on its own initiative.

5. Formal Citations

  1. DBX and anothervDBZ, Originating Application No 10 of 2023, [2023] SGHC(I) 18

6. Timeline

DateEvent
Margin Facility Letter issued by DBZ to DBX.
Facility extended to June 2019 with reduced limit.
Tribunal issued awards in both arbitrations.
Tribunal issued corrections to both awards.
Application to set aside the awards filed in the High Court.
Application transferred to the Singapore International Commercial Court.
Hearing of the application.
Judgment reserved.

7. Legal Issues

  1. Setting Aside Arbitration Award
    • Outcome: The court held that the application to set aside the arbitration award was brought out of time and that the grounds for setting aside were not substantiated.
    • Category: Substantive
    • Sub-Issues:
      • Validity of arbitration agreement
      • Proper notice of arbitral proceedings
      • Conflict with public policy
  2. Validity of Arbitration Agreement
    • Outcome: The court held that the arbitration clause in the Terms was validly incorporated into the Letter.
    • Category: Substantive
    • Sub-Issues:
      • Incorporation of arbitration clause
      • Unilateral arbitration clause
  3. Proper Notice of Arbitral Proceedings
    • Outcome: The court held that the Applicants were given proper notice of the arbitral proceedings.
    • Category: Procedural
    • Sub-Issues:
      • Actual notice
      • Deemed notice
  4. Conflict with Public Policy
    • Outcome: The court held that the provision of the Facility was not illegal in Hong Kong and that, even if it had been, it would not have conflicted with the public policy of Singapore.
    • Category: Substantive
    • Sub-Issues:
      • Illegality of contract
      • Contravention of regulatory requirements
  5. Time Limit for Setting Aside
    • Outcome: The court held that the application was brought out of time, as the three-month period commenced with the receipt of the original awards, not the corrections.
    • Category: Procedural

8. Remedies Sought

  1. Setting aside of arbitration awards

9. Cause of Actions

  • Breach of Contract
  • Guarantee

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Finance
  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
The Republic of India v Deutsche Telecom AGSingapore Court of Appeal (International)Yes[2023] SGCA(I) 4SingaporeCited regarding the derivative interest in protecting confidentiality in arbitral proceedings as an exception to the general principle of open justice.
BZW and another v BZVSingapore Court of AppealYes[2022] 1 SLR 1080SingaporeCited regarding the requirement to state grounds in support of an application to set aside an award.
ABC Co v XYZ Co LtdSingapore High CourtYes[2003] 3 SLR(R) 546SingaporeCited for the principle that the three-month time period for setting aside an award may not be enlarged by the Court.
BXS v BXTSingapore High CourtYes[2019] 4 SLR 390SingaporeCited for the principle that the three-month time period for setting aside an award may not be enlarged by the Court.
BRS v BRQ and another and another appealSingapore Court of AppealYes[2021] 1 SLR 390SingaporeCited for the principle that the three-month time period for setting aside an award may not be enlarged by the Court and regarding the effect of a request for correction on the time limit for setting aside.
Pittalis v SherefettinEngland and Wales Court of AppealYes[1986] 2 WLR 1003England and WalesCited regarding the validity of unilateral arbitration clauses.
Wilson Taylor Asia Pacific Pte Ltd v Dyna-Jet Pte LtdSingapore Court of AppealYes[2017] 2 SLR 362SingaporeCited regarding the validity of unilateral arbitration agreements.
Bintai Kindenko Pte Ltd v Samsung C&T Corp and anotherSingapore Court of AppealYes[2019] 2 SLR 295SingaporeCited for the principle that a party who signs a contractual document is bound by its terms even if the party has not read them.
International Research Corp PLC v Lufthansa Systems Asia Pacific Pte Ltd and anotherSingapore High CourtYes[2014] 1 SLR 130SingaporeCited regarding the interpretation of contracts to determine whether parties intended to incorporate an arbitration clause.
Marty Ltd v Hualon Corp (Malaysia) Sdn Bhd (receiver and manager appointed)Singapore Court of AppealYes[2018] 2 SLR 1207SingaporeCited regarding the principle that a party bound by a contract is taken to have knowledge of its contents, including any arbitration clause.
Daewoo Shipbuilding & Marine Engineering Co Ltd v Songa Offshore Equinox Ltd and anotherEngland and Wales High Court (Commercial Court)Yes[2019] 1 All ER 161England and WalesDiscussed in relation to whether the time for challenging an award is automatically delayed by an application for correction.
Xstrata Coal Queensland Pty Ltd and others v Benxi Iron & Steel (Group) International Economic & Trading Co LtdEngland and Wales High Court (Commercial Court)Yes[2020] Bus LR 954England and WalesDiscussed in relation to whether the time for challenging an award is automatically delayed by an application for correction.
BRQ and another v BRS and another and another matterSingapore High CourtYes[2019] SGHC 260SingaporeDiscussed in relation to whether the time for challenging an award is automatically delayed by an application for correction.
AKN and another v ALC and others and another appealSingapore Court of AppealYes[2016] 1 SLR 966SingaporeCited regarding the principle that an arbitral tribunal's authority generally expires on the issue of a final award.
Jiangsu Overseas Group Co Ltd v Concord Energy Pte Ltd and another matterSingapore High CourtYes[2016] 4 SLR 1336SingaporeCited regarding the principle that findings of fact in an award are not open to contest.
Beijing Sinozonto Mining Investment Co Ltd v Goldenray Consortium (Singapore) Pte LtdSingapore High CourtYes[2014] 1 SLR 814SingaporeCited regarding the principle that findings of fact in an award are not open to contest.
Re Shanghai Xinan Screenwall Building & Decoration Co LtdSingapore High CourtYes[2022] 5 SLR 393SingaporeCited regarding the principle that delivery of a notice of arbitration to the address stated in the contract between the parties is proper notice of the arbitration.
MCC Proceeds Inc v Bishopsgate Investment Trust plcEngland and Wales High CourtYes[1999] CLC 417England and WalesCited regarding the function of an expert witness on foreign law.
Pacific Recreation Pte Ltd v S Y Technology Inc and another appealSingapore Court of AppealYes[2008] 2 SLR(R) 491SingaporeCited regarding the function of an expert witness on foreign law.
Baron de Bode’s CaseQueen's BenchYes(1845) 8 QB 208England and WalesCited regarding the function of an expert witness on foreign law.
PT Asuransi Jana Indonesia (Persero) v Dexia Bank SASingapore Court of AppealYes[2007] 1 SLR(R) 597SingaporeCited regarding the narrow scope of the public policy ground for setting aside an arbitral award.
Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) LtdSingapore High CourtYes[2010] 3 SLR 1SingaporeCited regarding the high threshold for establishing a public policy ground for setting aside an arbitral award.
BAZ v BBA and others and other mattersSingapore High CourtYes[2020] 5 SLR 266SingaporeCited regarding the high threshold for establishing a public policy ground for setting aside an arbitral award.
Ralli Brothers v Companiera Naviera Sota Y AznarEngland and Wales High CourtYes[1920] 2 KB 287England and WalesDiscussed in relation to the principle that the court should not assist or sanction the breach of the laws of other independent states.
Soleimany v SoleimanyEngland and Wales Court of AppealYes[1991] 1 QB 785England and WalesDiscussed in relation to the principle that the court should not assist or sanction the breach of the laws of other independent states.
AJU v AJTSingapore Court of AppealYes[2011] 4 SLR 739SingaporeCited regarding the circumstances in which the court may reopen an arbitral tribunal's decision that an underlying contract is legal.
Z v YHong Kong Court of First InstanceYes[2018] HKCFI 2342Hong KongCited as an instance of refusal to enforce an award on the ground of illegality in a foreign jurisdiction.
Gokul Patnaik v Nine Rivers Capital LtdSingapore High CourtYes[2021] 3 SLR 22SingaporeCited regarding the public policy ground in the Model Law and the assessment of illegality under foreign law.

13. Applicable Rules

Rule Name
UNCITRAL Arbitration Rules
SIAC Rules
Rules of Court 2021
Singapore International Commercial Court Rules 2021

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act 1994Singapore
Securities and Futures Ordinance (Cap. 571)Hong Kong

15. Key Terms and Keywords

15.1 Key Terms

  • Margin financing facility
  • Arbitration award
  • Setting aside
  • UNCITRAL Model Law
  • International Arbitration Act
  • Terms and Conditions
  • Deed of Guarantee and Indemnity
  • Hong Kong Securities and Futures Ordinance
  • Public policy
  • Incorporation of terms
  • Proper notice

15.2 Keywords

  • arbitration
  • setting aside
  • margin financing
  • international commercial law
  • Singapore
  • Hong Kong

17. Areas of Law

Area NameRelevance Score
Recourse against award95
Setting Aside Arbitral Award95
Arbitration90
Margin Financing Facility Agreement80
UNCITRAL Model Law70
International Commercial Arbitration70
International Arbitration Act70
Banking Law60
Banking and Finance60
Contract Law40
Contractual terms40
Jurisdiction30
Breach of Contract30
Company Law20
Conflict of Laws20
Summary Judgement20
Evidence20

16. Subjects

  • Arbitration
  • Contract Law
  • Financial Law
  • Civil Procedure