Swire Shipping v Ace Exim: Setting Aside Arbitral Award - Jurisdiction, Natural Justice, Customary Waiting Place

Swire Shipping Pte Ltd applied to the General Division of the High Court of Singapore to set aside a final arbitral award in favor of Ace Exim Pte Ltd. The arbitration, administered by the Singapore Chamber of Maritime Arbitration, concerned a dispute over a BIMCO RECYCLEON contract for the sale of the vessel MV Melanesian Pride for scrap. Ace Exim sought to recover its deposit, while Swire counterclaimed for the balance of the purchase price. The court, presided over by S Mohan J, dismissed Swire's application, finding no merit in the grounds raised for setting aside the award.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application dismissed

1.3 Case Type

Arbitration

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court dismisses Swire Shipping's application to set aside an arbitral award, finding no jurisdictional defect or breach of natural justice.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Swire Shipping Pte LtdApplicantCorporationApplication DismissedLost
Ace Exim Pte LtdRespondentCorporationApplication DismissedWon

3. Judges

Judge NameTitleDelivered Judgment
S MohanJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Ang KailiVirtus Law LLP
Shannon Yeo Feng TingVirtus Law LLP
Thong Ying XuanLVM Law Chambers LLC
Lok Vi MingLVM Law Chambers LLC
Mohammad Haireez bin Mohameed JufferieLVM Law Chambers LLC
Tan Kah WaiLVM Law Chambers LLC
Tan Boon Yong ThomasHaridass Ho & Partners
Lieu Kuok PohHaridass Ho & Partners

4. Facts

  1. Swire and Ace Exim entered into a BIMCO RECYCLEON contract for the sale of the vessel MV Melanesian Pride for scrap.
  2. Ace Exim paid a 30% deposit of US$645,775.00.
  3. The contract stipulated delivery at Alang, India, but COVID-19 measures made Alang inaccessible.
  4. Swire tendered a NOR at the mouth of the Gulf of Khambhat.
  5. Ace Exim rejected the NOR, claiming the vessel was not at the agreed place of delivery.
  6. Ace Exim commenced arbitration to recover the deposit; Swire counterclaimed for the balance of the price.
  7. The Arbitrator found in Ace Exim’s favour, holding the NOR was invalid.

5. Formal Citations

  1. Swire Shipping Pte Ltd v Ace Exim Pte Ltd, Originating Application No 1280 of 2023, [2024] SGHC 211

6. Timeline

DateEvent
BIMCO RECYCLEON contract signed
India implements COVID-19 measures
Swire informs Ace Exim of Alang inaccessibility
Ace Exim does not designate alternative delivery place
Vessel arrives at Gulf of Khambhat; Swire tenders NOR
Ace Exim rejects NOR
SCMA appoints Arbitrator
Final Award issued by Arbitrator
Originating Application No 1280 of 2023 filed
Hearing date
Application dismissed
Written grounds of decision released

7. Legal Issues

  1. Excess of Jurisdiction
    • Outcome: The court found that the Arbitrator did not exceed his jurisdiction in making the Jafarabad Finding.
    • Category: Jurisdictional
    • Sub-Issues:
      • Tribunal making finding on unpleaded issue
      • Tribunal exceeding scope of submission to arbitration
  2. Breach of Natural Justice
    • Outcome: The court found that the Jafarabad Finding was not made in breach of natural justice.
    • Category: Procedural
    • Sub-Issues:
      • Denial of reasonable opportunity to present case
      • Tribunal adopting chain of reasoning without opportunity to address

8. Remedies Sought

  1. Setting aside of arbitral award
  2. Recovery of deposit
  3. Balance of purchase price

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Arbitration

11. Industries

  • Shipping
  • Recycling

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
AKN and another v ALC and others and other appealsCourt of AppealYes[2015] 3 SLR 488SingaporeCited for the principle of minimal curial intervention in arbitration.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte LtdCourt of AppealYes[2007] 3 SLR(R) 86SingaporeCited for the principle that parties accept limited recourse to courts in arbitration.
BLC and others v BLB and anotherCourt of AppealYes[2014] 4 SLR 79SingaporeCited for the principle that parties accept limited recourse to courts in arbitration.
Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and anotherCourt of AppealYes[2021] 2 SLR 1279SingaporeCited for the principle that an arbitral tribunal's jurisdiction is derived from the parties' consent.
CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBKCourt of AppealYes[2011] 4 SLR 305SingaporeCited for the two-stage enquiry as to whether the arbitral tribunal had exceeded its jurisdiction.
CDM and another v CDPCourt of AppealYes[2021] 2 SLR 235SingaporeCited for the sources the court assesses to determine the scope of the parties’ submission to arbitration.
CAJ and another v CAI and another appealCourt of AppealYes[2022] 1 SLR 505SingaporeCited for the overriding consideration to determine whether the relevant issues had been properly pleaded before the tribunal.
DGE v DGFHigh CourtYes[2024] SGHC 107SingaporeCited for the court taking a balanced approach towards assessing what falls within the scope of the submission to arbitration.
CKH v CKG and another matterCourt of AppealYes[2022] 2 SLR 1SingaporeCited for the pleadings being the first place in which to look for the issues submitted to arbitral decision.
GD Midea Air Conditioning Equipment Co Ltd v Tornado Consumer Goods Ltd and another matterHigh CourtYes[2018] 4 SLR 271SingaporeCited for the distinction between different types of challenges under Art 34(2)(a)(iii) of the Model Law.
CBX and another v CBZ and othersCourt of AppealYes[2022] 1 SLR 47SingaporeCited for the distinction drawn in GD Midea with approval.
TMM Division Maritima SA de CV v Pacific Richfield Marine Pte LtdHigh CourtYes[2013] 4 SLR 972SingaporeCited for the principle that it was open for the tribunal to decide the characterisation of the relevant term as an anterior issue in order to determine the issue of repudiatory breach that had been submitted to it.
Prometheus Marine Pte Ltd v King, Ann Rita and other mattersHigh CourtYes[2017] SGHC 36SingaporeCited for the principle that a formulaic and pedantic approach to construction of the issues should be eschewed in favour of a holistic assessment of the true issues before the tribunal.
Prometheus Marine Pte Ltd v King, Ann Rita and another appealCourt of AppealYes[2018] 1 SLR 1SingaporeCited for the principle that a practical view has to be taken regarding the substance of the dispute being referred to arbitration.
PT Prima International Development v Kempinski Hotels SA and other appealsCourt of AppealYes[2012] 4 SLR 98SingaporeCited for the principle that any new fact or change in the law arising after a submission to arbitration which is ancillary to the dispute submitted for arbitration and which is known to all the parties to the arbitration is part of that dispute and need not be specifically pleaded.
CJA v CIZCourt of AppealYes[2022] 2 SLR 557SingaporeCited for the principle that challenges to jurisdiction require the court to look at the arbitration in the round to see whether or not an issue was live, whereas challenges based on natural justice raise the question of whether an issue had been sufficiently raised by or to the parties.
Asiana Airlines, Inc v Gate Gourmet Korea Co, LtdSingapore International Commercial CourtYes[2022] 4 SLR 158SingaporeCited for the principle that if the tribunal has given the parties an adequate opportunity to address an issue, it may be the case that, even if not formally within the scope of the parties’ submission and/or pleadings, the parties may be found to have agreed to a widening of the scope of the arbitration.
China Machine New Energy Corp v Jaguar Energy Guatemala LLC and anotherCourt of AppealYes[2020] 1 SLR 695SingaporeCited for the principle that an applicant seeking to set aside an award on the ground of breach of natural justice must establish which rule of natural justice was breached, how it was breached, in what way the breach was connected to the making of the award, and how the breach did or could prejudice its rights.
Triulzi Cesare SRL v Xinyi Group (Glass) Co LtdHigh CourtYes[2015] 1 SLR 114SingaporeCited for the principle that there is no distinction between the right to be heard as an aspect of the rules of natural justice under s 24(b) of the IAA and as an aspect of being able to be heard within the meaning of Article 34(2)(a)(ii).
Coal & Oil Co LLC v GHCL LtdHigh CourtYes[2015] 3 SLR 154SingaporeCited for the principle that successful challenges based on alleged breaches of natural justice would be few and far between and limited to cases where the error is clear on the face of the record.
JVL Agro Industries Ltd v Agritrade International Pte LtdHigh CourtYes[2016] 4 SLR 768SingaporeCited for the two aspects to a party’s reasonable opportunity to present its case: a positive aspect and a responsive aspect.
L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appealCourt of AppealYes[2013] 1 SLR 125SingaporeCited for the principle that it is never in the interest of the court, much less its role, to assume the function of the arbitral tribunal.
CVG v CVHHigh CourtYes[2023] 3 SLR 1559SingaporeCited as authority for the proposition that a party does not have a reasonable opportunity to present its case if the counterparty raises a case only at the post-hearing submissions stage of the arbitration.
Reliance Industries Ltd and another v The Union of IndiaEnglish High CourtYes[2018] 2 All ER (Comm) 1090England and WalesCited for the distinction between a lack of opportunity to deal with a case and a failure to recognise or take such opportunity.
Phoenixfin Pte Ltd and others v Convexity LtdCourt of AppealYes[2022] 2 SLR 23SingaporeCited for the extent of the opportunity needed to be given depends on the nature of the issue.
CDX and another v CDZ and anotherHigh CourtYes[2021] 5 SLR 405SingaporeCited for the principle that there is no breach of natural justice if a party fails to present evidence or submissions to the tribunal on an issue which is a link in the tribunal’s chain of reasoning, either because the party fails to appreciate that the issue is before the tribunal through mistake or misunderstanding, or because the party makes a conscious tactical choice not to engage the opposing party on that issue.
BZW and another v BZVCourt of AppealYes[2022] 1 SLR 1080SingaporeCited for the principle that a party must establish that the tribunal conducted itself either irrationally or capriciously such that a reasonable litigant in his shoes could not have foreseen the possibility of reasoning of the type revealed in the award.
Glaziers Engineering Pte Ltd v WCS Engineering Construction Pte LtdCourt of AppealYes[2018] 2 SLR 1311SingaporeCited for the three scenarios which may result in surprising outcomes for the parties, and whether these would involve breaches of natural justice.
CDI v CDJHigh CourtYes[2020] 5 SLR 484SingaporeCited for the principle that if a subsidiary issue (to the ultimate issue before the tribunal) ought reasonably to have been foreseen by the parties, the tribunal does not have to specifically invite submissions on the subsidiary issue, and if a party fails for whatever reason to address such a reasonably foreseeable issue, he cannot be heard to complain subsequently that he has been deprived of a right to a reasonable opportunity to be heard on said issue.
CFJ and another v CFL and another and other mattersSingapore International Commercial CourtYes[2023] 3 SLR 1SingaporeCited for the principle that the incoherence of an award was not a freestanding ground on which the award could be set aside.
Primera Maritime (Hellas) Ltd and other companies v Jiangsu Eastern Heavy Industry Co Ltd and another companyEnglish High CourtYes[2014] 1 All ER (Comm) 813England and WalesCited for the principle that it is clearly not appropriate to use a setting aside application to challenge the findings of fact made by the tribunal.
CEF and another v CEHCourt of AppealYes[2022] 2 SLR 918SingaporeCited for the principle that the no evidence rule in Australian and New Zealand authority did not form part of Singapore law as it would run contrary to the Singapore courts’ steadfast observance of the policy of minimal curial intervention.
Zermalt Holdings SA v Nu-Life Upholstery Repairs LtdEnglish High CourtYes[1985] 2 EGLR 14England and WalesCited for the principle that the courts strive to uphold arbitration awards and do not approach them with a meticulous legal eye endeavouring to pick holes, inconsistencies and faults in awards and with the objective of upsetting or frustrating the process of arbitration.
Trustees of Rotoaira Forest Trust v Attorney-GeneralNew Zealand High CourtYes[1999] 2 NZLR 452New ZealandCited for the principle that an arbitrator is under no general obligation to disclose what he is minded to decide so that the parties may have a further opportunity of criticising his mental processes before he finally commits himself.
Glaziers Engineering Pte Ltd v WCS Engineering Construction Pte LtdCourt of AppealYes[2018] 2 SLR 1311SingaporeCited for the principle that a surprising or unforeseen outcome may usefully indicate that there has been a breach of the fair hearing rule.
CVV and others v CWBCourt of AppealYes[2024] 1 SLR 32SingaporeCited for the principle that the law does not hold arbitrators to the same standard of reasoning that is imposed on judges.
NKD Maritime Ltd v Bart Maritime (No 2) Inc (The Shagang Giant)English High CourtYes[2022] EWHC 1615 (Comm)England and WalesSwire submitted that this case was on all fours with the parties’ dispute in the Arbitration, but the Arbitrator distinguished it.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act 1994 (2020 Rev Ed)Singapore
Sale of Goods Act (Cap 193, 1999 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Setting aside
  • Jurisdiction
  • Natural justice
  • Customary waiting place
  • Jafarabad Waiting Place
  • Heavily laden vessels
  • NOR (Notice of Readiness)
  • BIMCO RECYCLEON
  • Minimal curial intervention
  • Due process paranoia

15.2 Keywords

  • Arbitration
  • Setting aside
  • Jurisdiction
  • Natural justice
  • Shipping
  • Contract
  • Singapore

17. Areas of Law

Area NameRelevance Score
Arbitration95
International Commercial Arbitration90
Recourse against award80
Natural justice70
Jurisdiction60
Foreign arbitral award50

16. Subjects

  • Arbitration
  • Contract Law
  • Civil Procedure
  • Shipping