Newspeed v. Citus

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DMC/SandT/47/01
Newspeed International Limited v. Citus Trading Pte Ltd
High Court of Singapore: Woo Bih Li JC: 4 June 2001
Khattar Wong & Partners, for Newspeed
Drew & Napier, for Citus
ENFORCEMENT OF FOREIGN AWARD UNDER THE INTERNATIONAL ARBITRATION ACT (CAP. 143A): WHETHER RESPONDENT UNABLE TO PRESENT ITS CASE IN ARBITRATION PROCEEDINGS
Summary
A dispute between Newspeed and Citus was submitted to arbitration in China. Written submissions were made by both parties. The tribunal delivered an award in favour of Newspeed. Newspeed applied to enforce the award in Singapore under the International Arbitration Act (Cap. 143A). Citus unsuccessfully tried to resist enforcement on the ground that it was unable to present its case in the arbitration proceedings.

This case note has been supplied by Ang and Partners, the International Contributors for Singapore

Facts
Newspeed entered into a contract with Citus for the purchase of 7,000 m³ of Indonesian Merbau Round Logs. Newspeed made a claim against Citus for short-delivery and defective quality. Pursuant to the terms of the contract, the dispute was referred to arbitration under the China International Economic and Trade Arbitration Commission ("CIETAC"). The hearing of the arbitration tribunal took place on 11 January 2000, after which written submissions were made. Newspeed sent further evidence to the tribunal. On 16 August 2000, Citus wrote to request for a second sitting as they had important evidence to submit and had questions about the new evidence submitted by Newspeed. On 24 August 2000, Citus again sought a second hearing, asking for a cross-examination to be conducted. CIETAC delivered an arbitration award dated 16 August 2000, without holding the second hearing. Citus appealed to the Intermediate People’s Court in Beijing on 21 September 2000. The appeal was dismissed on 30 October 2000.

Newspeed applied to enforce the arbitration award and was granted leave to do so. Citus then applied to set aside the order granting leave to Newspeed to enforce the arbitration award.

Judgment
1. The Court dismissed Citus’ application.

2. Citus sought to rely on section 31(2)(c) of the International Arbitration Act (Cap. 143A), which provided that the Court may refuse enforcement of a foreign award if the person against whom enforcement is sought proves that he was unable to present his case in the arbitration proceedings.

3. Citus had canvassed the same issues before the Intermediate People’s Court and failed. They were therefore bound by the decision of the Intermediate People’s Court.

4. Citus could not take two bites at the cherry, by applying to set aide the award, after he had unsuccessfully sought to challenge the award before another court.

Comment
The unsuccessful party in an arbitration could take only one of two routes available. He could either
a) challenge the arbitral award; or
b) resist attempts by the successful party to seek recognition and enforcement of the award.

The unsuccessful party must elect which route to take and cannot, upon the failure to set aside the award, choose to challenge its enforcement on the same grounds. In Paklito Investment Ltd v. Klockner East Asia Ltd [1993] 2 HKLR 39, Kaplan J had upheld the setting aside of an enforcement order on the ground that there had been a serious breach of due process. Woo JC distinguished that case on the basis that the Defendants there had not made an unsuccessful attempt to set aside the award.

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