FIC Properties v PT Rajawali: Setting Aside Arbitration Award for Fraud, Illegality, Natural Justice
In the Singapore International Commercial Court, FIC Properties Sdn Bhd sought to enforce an arbitration award against PT Rajawali Capital International and PT Rajawali Corpora. The Rajawalis cross-applied to set aside the award, alleging fraud, illegality, and breach of natural justice. The court, composed of Philip Jeyaretnam J, Roger Giles IJ, and Yuko Miyazaki IJ, dismissed the Rajawalis' applications, finding no grounds to set aside the award or the enforcement order. The underlying dispute arose from a contract for the sale of shares in PT Eagle High Plantations Tbk, with FIC holding a put option.
1. Case Overview
1.1 Court
Singapore International Commercial Court1.2 Outcome
Applications dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses PT Rajawali's application to set aside an arbitration award, finding no fraud, illegality, or breach of natural justice.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| FIC Properties Sdn Bhd | Claimant, Defendant | Corporation | Applications dismissed | Won | |
| PT Rajawali Capital International | Defendants, Claimants | Corporation | Applications dismissed | Lost | |
| PT Rajawali Corpora | Defendants, Claimants | Corporation | Applications dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Philip Jeyaretnam | Judge of the High Court | Yes |
| Roger Giles | International Judge | No |
| Yuko Miyazaki | International Judge | No |
4. Counsels
4. Facts
- FIC entered into a contract with Rajawali Capital to purchase shares in PT Eagle High Plantations Tbk.
- The contract included a Put Option allowing FIC to sell the shares back to Rajawali Capital.
- FIC exercised the Put Option, but Rajawali Capital disputed its validity.
- A first arbitration found the initial exercise of the Put Option invalid.
- FIC exercised the Put Option again, leading to a second arbitration.
- Rajawali Capital raised defenses of fraud, illegality, and breach of natural justice to set aside the second award.
- FIC had pledged the shares to GovCo Holdings Bhd as security for a loan.
5. Formal Citations
- FIC Properties Sdn Bhd v PT Rajawali Capital International and another and another matter, Originating Application No 14 of 2024 (Summons No 38 of 2024) and Originating Application No 21 of 2024, [2024] SGHC(I) 33
6. Timeline
| Date | Event |
|---|---|
| Contract signed | |
| EHP Shares pledged by FIC to GovCo | |
| FIC purported to exercise the Put Option | |
| Rajawali Capital commenced an arbitration against FIC | |
| FIC purported to exercise the Put Option for a second time | |
| First Tribunal found for Rajawali Capital in its award | |
| FIC commenced a second arbitration against the Rajawalis | |
| FIC applied for permission to enforce the Second Award | |
| Enforcement Order was made | |
| The Enforcement Order was served on the Rajawalis | |
| FIC applied for an injunction freezing the Rajawalis’ assets | |
| Urgent ex parte hearing convened and application allowed | |
| The Rajawalis applied for an extension of time to apply to set aside the Enforcement Order | |
| Application filed to set aside the Enforcement Order | |
| The Rajawalis applied for the Second Award to be set aside | |
| Court allowed the Rajawalis’ application for orders requiring the production by FIC of certain documents | |
| SUM 38 and OA 21 were jointly heard | |
| Judgment reserved |
7. Legal Issues
- Fraud
- Outcome: The court found no evidence of fraud that would justify setting aside the arbitration award.
- Category: Substantive
- Sub-Issues:
- Non-disclosure of material information
- Misrepresentation
- Illegality
- Outcome: The court found that the performance of the award would not be unlawful under Indonesian law and therefore did not violate Singapore's public policy.
- Category: Substantive
- Breach of Natural Justice
- Outcome: The court found that the Second Tribunal did not fail to acknowledge common ground or consider arguments raised by the Rajawalis.
- Category: Procedural
- Sub-Issues:
- Failure to acknowledge common ground
- Failure to consider an argument
8. Remedies Sought
- Enforcement of Arbitration Award
- Setting Aside Arbitration Award
9. Cause of Actions
- Breach of Contract
- Enforcement of Arbitration Award
- Setting Aside Arbitration Award
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Finance
- Agriculture
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ching Chew Weng Paul, deceased, and others v Ching Pui Sim and others | High Court of Singapore | Yes | [2011] 3 SLR 869 | Singapore | Cited for the principle that allegations of fraud must be distinctly pleaded and proved. |
| Lazarus Estates Ltd v Beasley | Queen's Bench | Yes | [1956] 1 QB 702 | England and Wales | Cited for the principle that allegations of fraud must be distinctly pleaded and proved. |
| Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and another | Court of Appeal of Singapore | Yes | [2021] 1 SLR 1045 | Singapore | Cited for the definition of 'procedural fraud' under s 24(a) of the IAA, including concealment of material information with the intention to deceive the arbitral tribunal. |
| BVU v BVX | High Court of Singapore | Yes | [2019] SGHC 69 | Singapore | Cited for the requirement of a causative link between concealment aimed at deceiving the arbitral tribunal and the decision in favor of the concealing party. |
| Facade Solution Pte Ltd v Mero Asia Pacific Pte Ltd | Court of Appeal of Singapore | Yes | [2020] 2 SLR 1125 | Singapore | Cited regarding misrepresentation in adjudication proceedings and the irrelevance of reasonable diligence in discovering fraud. |
| Takhar v Gracefield Developments Ltd and others | UK Supreme Court | Yes | [2019] 2 WLR 984 | United Kingdom | Cited regarding the irrelevance of reasonable diligence in discovering fraud. |
| CLX v CLY and another and another matter | High Court of Singapore | Yes | [2023] 4 SLR 241 | Singapore | Cited for the principle that when new evidence is being introduced to demonstrate fraud at the setting aside stage, the applicant would have to demonstrate why, at the time of the arbitration, the new evidence was not available or could not have been obtained with reasonable diligence. |
| Anupam Mittal v Westbridge Ventures II Investment Holdings | Court of Appeal of Singapore | Yes | [2023] 1 SLR 349 | Singapore | Cited for the principle that the law governing an arbitration agreement is chiefly concerned with the existence and validity of the arbitration agreement in question. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act 1994 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Put Option
- EHP Shares
- Second Award
- GovCo Pledge
- Option Completion
- Trigger Event
- Irrevocable and unconditional
- Option End Date
- Second Arbitration
- First Arbitration
15.2 Keywords
- Arbitration
- Fraud
- Illegality
- Natural Justice
- Put Option
- Enforcement
- Setting Aside
17. Areas of Law
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure