DBO v DBP: Application to Set Aside Partial Arbitration Award - Frustration Doctrine & COVID-19 Impact

DBO, DBQ, DBS, and DBU (the Applicants) applied to the Singapore International Commercial Court to set aside a partial award issued by an arbitral tribunal in favor of DBP, DBR, DBT, DBV, and DBW (the Respondents). The Tribunal had dismissed the Applicants' claim that a facility agreement was discharged by frustration due to the COVID-19 pandemic. The court, comprising Chua Lee Ming J, Thomas Bathurst IJ, and Zhang Yongjian IJ, dismissed the application on 21 August 2023, finding no breach of natural justice or excess of jurisdiction by the Tribunal.

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 a partial award. The court dismissed the application, finding no frustration of contract due to the COVID-19 pandemic.

1.7 Decision Date

19 November 2023

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
DBO	Applicant	Corporation	Application dismissed	Lost	Reuben Gavin Peter of Dentons Rodyk & Davidson LLP Hannah Chua of Dentons Rodyk & Davidson LLP
DBQ	Applicant	Corporation	Application dismissed	Lost	Reuben Gavin Peter of Dentons Rodyk & Davidson LLP Hannah Chua of Dentons Rodyk & Davidson LLP
DBS	Applicant	Corporation	Application dismissed	Lost	Reuben Gavin Peter of Dentons Rodyk & Davidson LLP Hannah Chua of Dentons Rodyk & Davidson LLP
DBU	Applicant	Corporation	Application dismissed	Lost	Reuben Gavin Peter of Dentons Rodyk & Davidson LLP Hannah Chua of Dentons Rodyk & Davidson LLP
DBP	Respondent	Corporation	Won	Won	Ong Tun Wei Danny of Setia Law LLC Bethel Chan Ruiyi of Setia Law LLC Mazie Tan of Setia Law LLC Yoong Joon Wei, Aaron of Setia Law LLC
DBR	Respondent	Corporation	Won	Won	Ong Tun Wei Danny of Setia Law LLC Bethel Chan Ruiyi of Setia Law LLC Mazie Tan of Setia Law LLC Yoong Joon Wei, Aaron of Setia Law LLC
DBT	Respondent	Corporation	Won	Won	Ong Tun Wei Danny of Setia Law LLC Bethel Chan Ruiyi of Setia Law LLC Mazie Tan of Setia Law LLC Yoong Joon Wei, Aaron of Setia Law LLC
DBV	Respondent	Corporation	Won	Won	Ong Tun Wei Danny of Setia Law LLC Bethel Chan Ruiyi of Setia Law LLC Mazie Tan of Setia Law LLC Yoong Joon Wei, Aaron of Setia Law LLC
DBW	Respondent	Corporation	Neutral	Neutral	Zhuo Jiaxiang of Providence Law Asia LLC Leo Zhi Wei of Providence Law Asia LLC

3. Judges

Judge Name	Title	Delivered Judgment
Chua Lee Ming	Judge of the High Court	Yes
Thomas Bathurst	International Judge	No
Zhang Yongjian	International Judge	No

4. Counsels

Counsel Name	Organization
Reuben Gavin Peter	Dentons Rodyk & Davidson LLP
Hannah Chua	Dentons Rodyk & Davidson LLP
Ong Tun Wei Danny	Setia Law LLC
Bethel Chan Ruiyi	Setia Law LLC
Mazie Tan	Setia Law LLC
Yoong Joon Wei, Aaron	Setia Law LLC
Zhuo Jiaxiang	Providence Law Asia LLC
Leo Zhi Wei	Providence Law Asia LLC

4. Facts

Applicants sought to set aside a partial award dismissing their claim that a facility agreement was frustrated.
The Arbitration Claimants claimed the FA had been discharged by frustration due to the COVID-19 pandemic.
The Loan was taken for the purposes of a construction and development project in the Borrowers’ home country.
The Borrowers claimed they were unable to repay the Loan when it matured on 26 March 2021 due to the Pandemic.
The Arbitration Respondents filed the AED in which they sought a dismissal of the Arbitration Claimants’ claim that the FA had been discharged by frustration.
The Tribunal concluded that the Arbitration Claimants’ claim and defence that the FA had been discharged by frustration was manifestly without legal merit.

5. Formal Citations

DBO and others v DBP and others, Originating Application No 6 of 2023, [2023] SGHC(I) 21

6. Timeline

Date	Event
2020-02-26	Facility agreement signed
2021-03-26	Loan matured
2021-11-30	Lenders commenced restructuring proceedings
2021-12-06	Borrowers served a Notice of Arbitration
2021-12-21	Arbitration Respondents submitted their Response to Notice of Arbitration
2022-03-25	Application for joinder granted
2022-04-26	Tribunal was duly constituted
2022-07-04	Arbitration Claimants filed their statement of claim
2022-08-15	Arbitration Respondents filed their defence and counterclaim
2022-09-05	Arbitration Claimants filed their reply and defence to counterclaim
2022-09-26	Arbitration Respondents filed their reply to the defence to counterclaim
2022-10-18	Arbitration Respondents filed the AED
2022-12-16	Tribunal heard oral submissions on the AED
2023-01-30	Tribunal delivered its Partial Award
2023-03-20	Applicants applied to set aside the Partial Award
2023-05-11	Proceedings transferred to the Singapore International Commercial Court
2023-08-21	Application dismissed
2023-11-23	Judgment Date

7. Legal Issues

Breach of Natural Justice
- Outcome: The court found no breach of natural justice.
- Category: Procedural
- Sub-Issues:
  - Failure to assume existence of collateral contract
  - Denial of opportunity to present case
Excess of Jurisdiction
- Outcome: The court found no excess of jurisdiction.
- Category: Jurisdictional
- Sub-Issues:
  - Failure to act in accordance with agreed procedure
  - Granting early dismissal when case not manifestly without legal merit
Frustration of Contract
- Outcome: The court upheld the Tribunal's decision that the facility agreement was not discharged by frustration.
- Category: Substantive

8. Remedies Sought

Setting aside of partial arbitration award

9. Cause of Actions

Setting aside of arbitration award

10. Practice Areas

Arbitration
Commercial Litigation

11. Industries

No industries specified

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
CBS v CBP	Court of Appeal	Yes	[2021] 1 SLR 935	Singapore	Cited regarding the right to present witness testimony in arbitration proceedings.
BLC and others v BLB and another	Unknown	Yes	[2014] 4 SLR 79	Singapore	Cited for the principle that errors of law do not amount to a breach of natural justice.
ADG v ADI	Unknown	Yes	[2014] 3 SLR 481	Singapore	Cited for the principle that s 24(b) of the IAA and Article 34(2)(a)(ii) of the Model Law are coextensive.
China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another	Unknown	Yes	[2020] 1 SLR 695	Singapore	Cited for the principle that s 24(b) of the IAA and Article 34(2)(a)(ii) of the Model Law are coextensive.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd	Unknown	Yes	[2007] 3 SLR(R) 86	Singapore	Cited for the requirements to establish a breach of natural justice.
CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK	Court of Appeal	Yes	[2011] 4 SLR 305	Singapore	Cited for the two-stage enquiry to establish a breach of Article 34(2)(a)(iii).
Quarella SpA v Scelta Marble Australia Pty Ltd	Unknown	Yes	[2012] 4 SLR 1057	Singapore	Cited for the principle that an issue within the scope of submission to arbitration does not go outside the scope simply because the arbitral tribunal comes to a wrong conclusion on it.

13. Applicable Rules

Rule Name
Arbitration Rules of the Singapore International Arbitration Centre (6th Edition, 1 August 2016)
Rule 29.1 of the SIAC Rules
Singapore International Commercial Court Rules 2021

14. Applicable Statutes

Statute Name	Jurisdiction
International Arbitration Act 1994	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Partial Award
Early Dismissal
Frustration
Facility Agreement
COVID-19 Pandemic
Collateral Contract
Manifestly without legal merit
SIAC Rules
Arbitration

15.2 Keywords

arbitration
contract
frustration
covid-19
singapore
international commercial court

17. Areas of Law

Area Name	Relevance Score
International Commercial Arbitration	95
Arbitration	90
Setting Aside Arbitral Award	90
Frustration	80
Contract Law	70
Breach of Contract	60
Early Dismissal	50

16. Subjects

Arbitration
Contract Law
Frustration of Contract