Reliance Infrastructure v. Shanghai Electric: Forgery & Authority in Arbitration

In Reliance Infrastructure Limited v Shanghai Electric Group Co Ltd, the Singapore International Commercial Court addressed an application by Reliance Infrastructure to set aside an arbitration award in favor of Shanghai Electric. The dispute arose from a guarantee letter, the validity of which Reliance Infrastructure contested, alleging forgery and lack of authority of its signatory. The court dismissed the application, finding that Reliance Infrastructure had waived its right to challenge the award on these grounds and that the challenges were without merit.

1. Case Overview

1.1 Court

Singapore International Commercial Court

1.2 Outcome

Application to set aside the Award in SIC/OA 1/2023 dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court addresses forgery and authority allegations in setting aside an arbitration award, focusing on waiver and apparent authority.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Reliance Infrastructure LimitedClaimantCorporationApplication to set aside the Award dismissedLost
Harish Salve KC of Blackstone Chambers
Shanghai Electric Group Co LtdDefendantCorporationCosts awardedWon
Nicholas Emmet Graham Leslie of Fountain Court Chambers

3. Judges

Judge NameTitleDelivered Judgment
Philip JeyaretnamJudge of the High CourtYes
Sir Vivian RamseyInternational JudgeNo
Anselmo ReyesInternational JudgeNo

4. Counsels

Counsel NameOrganization
Vergis S Abraham SCProvidence Law Asia LLC
Liu EnningProvidence Law Asia LLC
Ngo Wei ShingProvidence Law Asia LLC
Asiyah binte Ahmad ArifProvidence Law Asia LLC
Harish Salve KCBlackstone Chambers
Foo Yuet MinDrew & Napier LLC
Tan Pei HanDrew & Napier LLC
Cavinder Bull SCDrew & Napier LLC
Nicholas Emmet Graham LeslieFountain Court Chambers
Ketan GaurTrilegal
Aayush MitrukaTrilegal
Tay Hong ZhiDrew & Napier LLC
Gerald Tan Yi FanDrew & Napier LLC

4. Facts

  1. Reliance Infrastructure sought to set aside an arbitration award based on the alleged forgery of a guarantee letter and lack of authority of its signatory.
  2. The guarantee letter contained an arbitration agreement, which Shanghai Electric invoked to enforce Reliance Infrastructure’s guarantee of Reliance (UK)’s liabilities.
  3. Reliance Infrastructure claimed it was unaware of the guarantee letter's existence and that its signatory, Mr. Agrawal, lacked authority to execute it.
  4. Reliance Infrastructure initially did not allege forgery but later raised concerns about the authenticity of the guarantee letter based on new information.
  5. The Tribunal found that Reliance Infrastructure had not put in issue whether the Guarantee Letter was a forgery and must be taken to have conceded that the Guarantee Letter existed.
  6. The court found that Reliance Infrastructure had waived its right to challenge the award on the grounds of forgery and want of authority.
  7. The court also found that Mr. Agrawal had the apparent authority to commit Reliance Infrastructure into agreements to arbitrate with Shanghai Electric.

5. Formal Citations

  1. Reliance Infrastructure Ltd v Shanghai Electric Group Co Ltd, Originating Application No 1 of 2023, [2024] SGHC(I) 3

6. Timeline

DateEvent
Reliance Infrastructure agreed to indemnify Shanghai Electric in relation to claims that the owner of another power plant project in Hisar, India may institute against Shanghai Electric
Parties entered into a Framework Agreement
Sasan Power Limited entered into a contract with Reliance Infra Projects (UK) Limited
Another officer of Reliance Infrastructure sent an email to Shanghai Electric with an attached draft of a guarantee letter
Reliance (UK) and Shanghai Electric entered into the Supply Contract
The Guarantee Letter was allegedly signed by Mr Agrawal on behalf of Reliance Infrastructure at a signing ceremony in Shanghai, China
Mr Agrawal sent an email to Shanghai Electric’s Vice–President, with an enclosed letter relaying various requests made by the Damodar Valley Corporation and proposing a contractual assignment for Shanghai Electric’s acceptance
Mr Agrawal sent an email to Shanghai Electric, in which he discussed two other power plant projects in India, viz, the Butibori and Krishnapattnam Projects
Shanghai Electric invoked the arbitration agreement in Paragraph 10 of the Guarantee Letter and sought enforcement of Reliance Infrastructure’s guarantee of Reliance (UK)’s liabilities under the Supply Contract
Reliance Infrastructure pleaded that the Guarantee Letter was invalid
Reliance Infrastructure made clear that it was not alleging that the Guarantee Letter was a forgery in opening submissions to the Tribunal
The Tribunal asked Shanghai Electric if the letterhead of Reliance Infrastructure on the original Guarantee Letter was embossed or computer-generated
Shanghai Electric’s counsel clarified in an email to the Tribunal that the original Guarantee Letter, inclusive of the letterhead, had been printed in black–and-white
Reliance Infrastructure’s counsel sent an email to the Tribunal alleging that these fresh facts as to how the Guarantee Letter had been printed meant that it “would prima facie constitute the making of a ‘false instrument’” and “appears to be a nullity (as all forgeries are nullities)”
In response to the Tribunal’s query as to the “specific findings” Parties wished for the Tribunal to make in respect of the Guarantee Letter, Reliance Infrastructure took the position that the newly disclosed facts meant “[t]hat the provenance of the purported Guarantee Letter … is in serious question”
Reliance Infrastructure prayed for “a declaration that the purported Guarantee Letter is invalid and unenforceable”
The Tribunal’s Award ordered Reliance Infrastructure to pay damages to Shanghai Electric for outstanding payments that were due under the Supply Contract
Reliance Infrastructure relies upon fresh evidence which was never put before the Tribunal, viz, the evidence of Mr Agrawal averring that he did not sign the Guarantee Letter
This Court’s order dated 6 October 2023 on SIC/SUM 42/2023
Reliance Infrastructure relies on the report of a handwriting expert, Mr Manas Mishra, who opines that the initials and signature of Mr Agrawal found on the Guarantee Letter are all forgeries
Defendant’s Written Submissions dated 28 December 2023
Claimant’s Written Submissions dated 2 January 2024
Hearing in SIC/OA 1/2023 dated 11 January 2024
Hearing in SIC/OA 1/2023 dated 12 January 2024
Judgment reserved

7. Legal Issues

  1. Waiver of Jurisdictional Objections
    • Outcome: The court held that Reliance Infrastructure waived its right to challenge the award based on forgery and want of authority by failing to raise these objections in a timely manner during the arbitration proceedings.
    • Category: Procedural
    • Sub-Issues:
      • Failure to raise objections in a timely manner
      • Knowledge of matters underlying the jurisdictional objection
  2. Validity of Arbitration Agreement
    • Outcome: The court found that Reliance Infrastructure failed to prove that the Guarantee Letter was forged or that Mr. Agrawal lacked the apparent authority to commit it to agreements to arbitrate with Shanghai Electric.
    • Category: Substantive
    • Sub-Issues:
      • Forgery of Guarantee Letter
      • Lack of Authority to Execute Arbitration Agreement
      • Separability of Arbitration Agreement
  3. Apparent Authority
    • Outcome: The court determined that Mr. Agrawal had the apparent authority to commit Reliance Infrastructure into agreements to arbitrate with Shanghai Electric.
    • Category: Substantive
    • Sub-Issues:
      • Representation by Principal
      • Acquiescence in Agent's Conduct
      • Reasonable Reliance by Third Party

8. Remedies Sought

  1. Setting aside of Arbitration Award

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Construction
  • Energy

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
The Republic of India v Deutsche Telekom AGSingapore High CourtYes[2023] 2 SLR 77SingaporeCited regarding the confidentiality of arbitration proceedings and the circumstances under which sealing orders may be lifted.
BAZ v BBA and others and other mattersSingapore High CourtYes[2020] 5 SLR 266SingaporeCited for the principle that a party is deemed to have waived its right to raise a jurisdictional objection in a setting aside proceeding if it had made a decision not to raise it during the arbitration when it ought to have done so at that juncture.
Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) LtdSingapore High CourtYes[2019] 2 SLR 131SingaporeCited for the principle that a party is deemed to have waived its right to raise a jurisdictional objection in a setting aside proceeding if it had made a decision not to raise it during the arbitration when it ought to have done so at that juncture.
Hunan Xiangzhong Mining Group Ltd v Oilive Pte LtdSingapore High CourtYes[2022] 5 SLR 239SingaporeCited for the fundamental purpose behind Art 16(2) is to require parties to raise objections to the jurisdiction of an arbitral tribunal at the earliest possible time
Deutsche Telekom AG v The Republic of IndiaSingapore International Commercial CourtYes[2023] SGHC(I) 7SingaporeCited for the principle that the question is whether the party had knowledge of the “matters underlying the jurisdictional objection so that it could have objected in a timely fashion during the arbitration itself
The Republic of India v Deutsche Telekom AGSingapore Court of AppealYes[2023] SGCA(I) 10SingaporeCited for the principle that the question is whether the party had knowledge of the “matters underlying the jurisdictional objection so that it could have objected in a timely fashion during the arbitration itself
Fiona Trust & Holding Corporation and others v Privalov and othersHouse of LordsYes[2007] UKHL 40England and WalesCited for the principle of separability as described, for example, in Fiona Trust & Holding Corporation and others v Privalov and others [2007] UKHL 40 (“Fiona Trust”) at [17]–[18]. An agreement to arbitrate is a separate contract that survives the destruction or rescission of the underlying contract in which it is contained.
Founder Group (Hong Kong) Ltd (in liquidation) v Singapore JHC Co Pte LtdSingapore Court of AppealYes[2023] SGCA 40SingaporeCited regarding the principle of separability cannot guarantee the survival of the arbitration clause in all circumstances.
Freeman and Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd and anotherEnglish Court of AppealYes[1964] 2 QB 480England and WalesCited for the principle that the most common means by which a principal may represent or ‘hold out’ that an agent has ostensible authority to contract on its behalf is the conduct of permitting or acquiescing in the agent conducting the business of the principal with third parties, cloaking that agent with apparent authority to make contracts in the ordinary course of such business

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act 1994Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Waiver
  • Jurisdictional Objection
  • Forgery
  • Apparent Authority
  • Guarantee Letter
  • Separability
  • SIAC
  • UNCITRAL Model Law
  • International Arbitration Act

15.2 Keywords

  • arbitration
  • waiver
  • forgery
  • authority
  • Singapore
  • construction
  • contract law

17. Areas of Law

Area NameRelevance Score
Arbitration95
Breach of Contract60
Contract Law60
Commercial Disputes50
Waiver40
Evidence40
Evidence Law40
Estoppel30
Forgery30
Jurisdiction30
Apparent Authority20
Separability20
Company Law20
Misrepresentation15

16. Subjects

  • Arbitration
  • Contract Law
  • Civil Procedure