Timing Important to Preserve Right to Active Remedies When Challenging Jurisdiction

Be on time to preserve your right to Active Remedies – the Singapore High Court considers a party’s duty to apply promptly when challenging the jurisdiction of an arbitral tribunal

Herbert Smith Freehills review the decision of the Singapore High Court in Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services [2018] SGHC 78, where the Singapore High Court dismissed an application to set aside an award on jurisdiction, on the basis that the applicant had failed to challenge the tribunal’s preliminary ruling on jurisdiction within the deadline stipulated under section 10(3) of the International Arbitration Act and Article 16(3) of the UNCITRAL Model Law. The decision provides guidance on the distinction between active and passive remedies in the context of applicable deadlines when seeking to set aside an award on grounds of jurisdiction, and resisting enforcement on the same basis.

The authors observe that the decision confirms on the one hand that the Singapore courts will construe, and hold parties to, the deadlines set out in the IAA and the Model Law strictly; on the other, it also reaffirms Singapore’s commitment to the choice of remedies doctrine, which was endorsed by the Court of Appeal in the landmark decision of PT First Media TBK v Astro Nusantara International BV and ors [2014] 1 SLR 372 .  In the latter decision, the court, having carried out a detailed examination of the negotiating history of the Model Law, concluded that article 16(3) constituted “neither an exception to the ‘choice of remedies’ policy of the Model Law, nor a ‘one-shot remedy“. PT First Media considered a party’s right to pursue either an active remedy by challenging the preliminary award on jurisdiction, or a passive remedy by challenging enforcement.

The authors conclude that the two decisions provide practical guidance on the steps that parties involved in international arbitrations seated in Singapore looking to challenge an award on the basis of excess jurisdiction may wish to take depending on tactical considerations, including cost, efficiency and timing.

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The case was appealed to the Court of Appeal.  Read the review by the Singapore Institute of Arbitrators.

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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