16) LAW & ARBITRATION
THE CONTRACT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH SINGAPORE LAW, NOT INCLUDING ANY CONFLICT OF LAWS OR RULES.
ANY DISPUTE ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING ANY QUESTION REGARDING ITS EXISTENCE, VALIDITY OR TERMINATION
SHALL BE REFERRED TO AND FINALLY RESOLVED BY ARBITRATION IN SINGAPORE TO THE EXCLUSION OF ANY OTHER FORUM OR JURISDICTION IN ACCORDANCE WITH THE ARBITRATION RULES OF THE SINGAPORE INTERNATIONAL ARBITRATION CENTRE (SIAC RULES) FOR THE TIME BEING IN FORCE WHICH RULES ARE DEEMED TO BE INCORPORATED BY REFERENCE IN THIS CLAUSE. THE TRIBUNAL SHALL CONSIST OF A SINGLE ARBITRATOR AGREED UPON BY BOTH PARTIES, OR IF NOT SO AGREED, BY THE CHAIRMAN FOR THE TIME BEING OF SIAC.
THE PLACE OF THE ARBITRATION SHALL BE SINGAPORE. THE LANGUAGE OF THE ARBITRATION SHALL BE ENGLISH. THE REASONED ARBITRATION AWARD SHALL BE FINAL AND BINDING UPON BOTH PARTIES WITHOUT RECOURSE TO ANY COURTS. ANY COSTS RELATED TO ARBITRATION, INCLUDING REASONABLE ATTORNEY'S FEES, SHALL BE BORNE BY THE LOSING PARTY.
THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS AND THE SALE OF GOODS ACT SHALL NOT APPLY TO THIS CONTRACT[…]
When making the appointment, we noted that the arbitration clause provides 'The Tribunal shall consist of a single arbitrator agreed upon by both parties, or if not so agreed, by the Chairman for the time being of SIAC'. The Chairman was unable to make the appointment.
We also noted that the President of the SIAC Court of Arbitration ('President') has decided that the proceedings be conducted under the expedited procedure. We proceeded to request the President to appoint the sole arbitrator pursuant to Rule 10.2 of the SIAC Rules and let the Parties know that the President would make the appointment (as stated in our email to the Parties dated 14 December 2020).
Please be informed that although the Chairman is unable to appoint an arbitrator under the SIAC Rules 2016, the practice under SIAC Rules 9.2 and 10.2 is to allow the Chairman to nominate an arbitrator for appointment by the President, provided the Chairman is not conflicted. Here, because the Chairman had reported a conflict, no request was made to the Chairman to appoint the sole arbitrator.
(a) The Arbitration Agreement provides that a sole arbitrator is to be "agreed" by the parties. It does not provide that the parties or the Chairman are to "nominate" or "appoint" the Arbitrator. This suggests that parties did not draw a distinction between a situation where parties "agreed" an arbitrator (be that by a nomination or an appointment) or when the Chairman chose one. In the context of rr 9.2 and 9.3 SIAC Rules 2016 which provide that where parties have agreed to appoint an arbitrator (or have agreed for a third party to appoint one), such agreement is deemed to be an agreement to nominate.28
(b) The parties did not agree that the Chairman was to play a special role in the constitution of the tribunal that would displace the provisions in the SIAC Rules 2016. If parties intended for the Chairman to "appoint" (rather than "nominate") the sole arbitrator, notwithstanding that the SIAC Rules 2016 incorporated at the time of commencement of proceedings may provide otherwise, they would have stated so explicitly. Mere reference to the Chairman is not sufficient.29
(c) The Arbitrator noted that whilst the earlier editions of the SIAC Rules in 2007 and 2009 provided for the Chairman to make appointments, those earlier rules had been amended in the SIAC Rules 2013 to provide for the President to make appointments (see also  above). Thus, any reference to Chairman in the older editions of the SIAC Rules is deemed to be a reference to the President. The effect of this is that the appointment provisions of the SIAC Rules, regardless of whether the 2007, 2010 or 2013 edition was incorporated, provide for the President to appoint or confirm any nomination of a sole arbitrator by the parties or a third party. The parties cannot have intended to have incorporated an appointment mechanism from an earlier edition of the SIAC Rules in its unamended form without having set this out expressly. Therefore, the parties' mere reference to the Chairman in the Arbitration Agreement is simply a reference to a third party to nominate the sole arbitrator.30
(d) The parties expressly provided that the SIAC Rules "currently in force" were deemed incorporated into the Arbitration Agreement. This indicates that the parties intended for the most up-to-date rules to apply when proceedings were commenced. They did not specifically carve out from that express incorporation some historical (and since amended) provisions relating to the appointment of the tribunal.31
(e) The Arbitrator rejected the plaintiff's argument that the Arbitration Agreement displaces r 10.2 of the SIAC Rules 2016. The Arbitration Agreement does not state as such. Rule 10 is also not prefaced by words such as "unless the parties have agreed otherwise". Thus, the Arbitration Agreement is to be read with rather than in contrast to r 10. Rule 10.1 provides that parties may seek to agree to have a person serve as sole arbitrator and where such an agreement is reached, it is subject to appointment by the President pursuant to r 9.3. The parties' provision that they would agree upon the sole arbitrator was consistent with r 10.1. The part that read "or if not so agreed, by the Chairman for the time being of SIAC" when read with r 9.2 of the SIAC Rules 2016 clearly means that if parties could not agree on a nomination, it was for the Chairman to nominate. Pursuant to r 9.3, any such nomination would be subject to appointment by the President. Clear unambiguous wording would have been required to displace the provisions of rr 9.2 and 9.3 of the SIAC Rules 2016 which the parties incorporated into the Arbitration Agreement. This was not present.32
(f) Rule 10 of the SIAC Rules 2016 applies where the parties have agreed to nominate a sole arbitrator and/or where they have agreed that a third party is to nominate an arbitrator. Rule 10.2 concerns two circumstances where the President is to appoint a sole arbitrator, namely: (a) where the parties have not reached agreement on the nomination of a sole arbitrator within 21 days (or such other period as may be agreed by the parties or set by the Registrar); or (b) if at any time either party makes such a request. The first situation would also apply where a party does not participate in the proceedings at all. The Arbitrator considered that this provision "caters for the situation where the parties' agreed procedure for appointing a sole arbitrator has failed, either because the parties have not been able to agree a nomination, or where a third party nominator has not made a nomination". Rule 10.2 therefore empowers the President to make the appointment so that the arbitral process is not stymied. It has a similar effect to Art 11(4) of the Model Law which allows a party to request a statutory appointing authority to make an appointment where the parties' chosen process has failed.33
(g) The parties did not state that they intended to supplant the right to request the President to appoint a sole arbitrator at any time under r 10.2 with the right for the Chairman to "appoint" or "nominate" one (which nomination would have been subject to appointment by the President). As a matter of construction, this was not the parties' objective intention. Instead, the parties agreed on a mechanism for nomination in the Arbitration Agreement and at the same time incorporated r 10.2. By doing so, the parties intended for these provisions to be read together and provided for a fall-back mechanism to ensure the timely appointment of the tribunal in the event their own intended mechanism failed.34
(a) first, the following threshold questions:
(i) was the plaintiff's jurisdictional challenge before the Arbitrator made out of time and;
(ii) if so, whether the court is precluded from hearing the challenge de novo under s 10(3) IAA; and
(b) second, whether the Arbitrator has jurisdiction over the Arbitration.
28 Jurisdiction of the Tribunal
28.3 Any objection that the Tribunal:
a. does not have jurisdiction shall be raised no later than in a Statement of Defence or in a Statement of Defence to a Counterclaim; or
b. is exceeding the scope of its jurisdiction shall be raised within 14 days after the matter alleged to be beyond the scope of the Tribunal's jurisdiction arises during the arbitral proceedings. The Tribunal may admit an objection raised by a party outside the time limits under this Rule 28.3 if it considers the delay justified. A party is not precluded from raising an objection under this Rule 28.3 by the fact that it has nominated, or participated in the nomination of, an arbitrator.
This corresponds to Art 16(2) of the Model Law which states that "[a] plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence".
B. Time-limits for raising objections, paragraph (2)
4. Paragraph (2) deals with the possible plea of a party that the arbitral tribunal does not have jurisdiction to decide the case before it or that it is exceeding the scope of its authority. It aims, in particular, at ensuring that any such objections are raised without delay.
5. The respondent may not invoke lack of jurisdiction after submitting his statement of defence (as referred to in article 23(1)), unless the arbitral tribunal admits a later plea since it considers the delay justified. …
[emphasis added in italics and bold italics]
C. Effect of failure to raise plea
8. The model law does not state whether a party's failure to raise his objections within the time-limit set by article 16(2) has effect at the post-award stage. The pertinent observation of the Working Group was that a party who failed to raise the plea as required under article 16(2) should be precluded from raising such objections not only during the later stages of the arbitral proceedings but also in other contexts, in particular, in setting aside proceedings or enforcement proceedings, subject to certain limits such as public policy, including those relating to arbitrability. 55/
9. It is submitted that this observation accords with the purpose underlying paragraph (2) and might appropriately be expressed in the model law. 56/ It would mean, in practical terms, that any objection, for example, to the validity of the arbitration agreement may not later be invoked as a ground for setting aside under article 34(2)(a)(i) or for requesting, under article 36(1)(a)(i), refusal of recognition or enforcement of an award (made under this Law); these provisions on grounds for setting aside or refusing recognition or enforcement would remain applicable and of practical relevance to those cases where a party raised the plea in time but without success or where a party did not participate in the arbitration, at least not submit a statement or take part in hearings on the substance of the dispute.
10. As expressed in the above observation of the Working Group, there are limits to the effect of a party's failure to raise his objections. These limits arise from the fact that certain defects such as violation of public policy, including non-arbitrability, cannot be cured by submission to the proceedings. Accordingly, such grounds for lack of jurisdiction would be decided upon by a court in accordance with article 34(2)(b) or, as regards awards made under this Law, article 36(1)(b) even if no party had raised any objections in this respect during the arbitral proceedings. It may be added that this result is in harmony with the understanding (stated above, para. 3) that these latter issues are to be determined by the arbitral tribunal ex officio.
[emphasis added in italics and bold italics]
65 First, the phraseology of Art 16(2) contemplates a party that is engaged in the arbitration; hence the reference to raising the plea not later than its statement of defence and the reference to a party not being precluded from raising a plea of no jurisdiction by appointing or participating in the appointment of an arbitrator. It is therefore unsurprising that texts on Art 16 mostly proceed on the footing that the objecting party is an active participant in the arbitral proceedings (see Nigel Blackaby et al, Redfern and Hunter on International Arbitration (Oxford University Press, 6th Ed, 2015) ('Redfern and Hunter') at para 10.30):
Parties are unlikely to succeed on any challenge to an award based on an objection that they have failed to raise during the arbitration. This is because they will usually be deemed to have waived that objection. … [emphasis added]
The authors of Redfern and Hunter referred to the English decision of Thyssen Canada Ltd v Mariana Maritime SA  EWHC 219 ('Thyssen Canada'), observing in a footnote to the above-quoted paragraph (n 57):
[In Thyssen Canada] it was held that a party who takes part in arbitral proceedings and fails to raise an objection as to a serious irregularity affecting the proceedings will lose the right to object, unless it can show that, at the time that it took part or continued to take part in the proceedings, it did not know and could not with reasonable diligence have discovered the grounds for the objection. [emphasis added]
66 These views support an argument that where a party has stayed away from the arbitral proceeding altogether or has walked out at some early stage, eg, before filing its statement of defence, then Art 16's time limit is not binding on it. However, I note that against this, s 10 of the IAA does not contain such phraseology.
67 Secondly, there is authority that an option remains open to a party to choose to leave the arbitral proceedings in protest, in which case the time limits in Art 34 (and therefore by extension, Art 16 as well) do not apply. This can be found in the first instance decision of Astro Nusantara International BV v PT Ayunda Prima Mitra  1 SLR 636 ('Astro Nusantara') at :
If a party chooses the second option of challenge by choosing to leave the arbitral regime in protest and should the tribunal rule against it on the merits, that party, as the losing party, is entitled within the time stipulated in Art 34 to set aside the award under any of the grounds in Art 34. … One way in which a party may challenge the jurisdiction of a tribunal is simply to step out of the arbitral regime and boycott the proceedings altogether. If this course of action is chosen (and this course is not without risk), then the rules for appeal which would apply to parties within the arbitral regime would no longer apply to the boycotting party. Arguably, the boycotting party would then be able to apply to set aside the award under Art 34(2)(a)(i) on jurisdictional grounds. The jurisdictional award would not be final vis-à-vis the boycotting party, and the opposing party would have ample notice of this from the boycotting party's absolute refusal to participate. This possibility is hinted at in UNCITRAL Commentary (A/CN 9/264) on Art 16(2) at para 9.
[emphasis in original in italics; emphasis added in bold italics]
Respectfully, I see the force of these counterarguments and they support the view that the time limit in Art 16 of the Model Law may not apply in a case where a party does not participate in the arbitration (whether deliberately or otherwise).
63 The second part of the paragraph … goes further than the Working Group did and reflects the Secretariat's view that a party who has not participated in the arbitration at all may still object to jurisdiction at the setting aside stage. The Secretariat therefore recognised that a different regime should apply to a non-participating party. At the time of this commentary, the 30-day time period for application to court was not included in the draft version of Art 16(3) which was probably why the Secretariat was also able at that time to say that a party that had raised the plea in time without success could also bring up the matter again in a setting aside application. In any case, the submission that the time limit in Art 16(2) would not have a preclusive effect on a non-participating party must, logically, apply also to non-observance of the time limit in Art 16(3) by such a party. [emphasis added]
30 Our first observation is that an arbitration agreement (such as the Arbitration Agreement) should be construed like any other form of commercial agreement (see Julian D M Lew QC, Loukas A Mistelis & Stefan M Kröll, Comparative International Commercial Arbitration (Kluwer Law International, 2003) at para 7-60). The fundamental principle of documentary interpretation is to give effect to the intention of the parties as expressed in the document.
31 Our second observation is that, where the parties have evinced a clear intention to settle any dispute by arbitration, the court should give effect to such intention, even if certain aspects of the agreement may be ambiguous, inconsistent, incomplete or lacking in certain particulars (see Halsbury's Laws of Singapore, vol 2 (LexisNexis, 2003 Reissue, 2003) at para 20.017) so long as the arbitration can be carried out without prejudice to the rights of either party and so long as giving effect to such intention does not result in an arbitration that is not within the contemplation of either party. This approach is similar to the 'principle of effective interpretation' in international arbitration law, which was described in Fouchard, Gaillard, Goldman on International Commercial Arbitration (Kluwer Law International, 1999) (Emmanuel Gaillard & John Savage eds) ('Fouchard') at p 258 as follows:
B. – THE PRINCIPLE OF EFFECTIVE INTERPRETATION
478. — The second principle of interpretation of arbitration agreements is the principle of effective interpretation. This principle is inspired by provisions such as Article 1157 of the French Civil Code, according to which 'where a clause can be interpreted in two different ways, the interpretation enabling the clause to be effective should be adopted in preference to that which prevents the clause from being effective.' This common-sense rule whereby, if in doubt, one should 'prefer the interpretation which gives meaning to the words, rather than that which renders them useless or nonsensical,' is widely accepted not only by the courts but also by arbitrators who readily acknowledge it to be a 'universally recognized rule of interpretation.' To give just one example of the application of this principle, an arbitral tribunal interpreting a pathological clause held that:
when inserting an arbitration clause in their contract the intention of the parties must be presumed to have been willing to establish an effective machinery for the settlement of disputes covered by the arbitration clause.
32 A subsidiary principle to the principle of effective interpretation is the principle that an arbitration agreement should also not be interpreted restrictively or strictly. An arbitration agreement is not a statute. This was noted in Fouchard at pp 260–261:
D. – REJECTION OF THE PRINCIPLE OF STRICT INTERPRETATION
[T]his principle [that an arbitration agreement should be interpreted 'restrictively'] is generally rejected in international arbitration. It is based on the idea that an arbitration agreement constitutes an exception to the principle of the jurisdiction of the courts, and that, as laws of exception are strictly interpreted, the same should apply to arbitration agreements. …
This has been frequently confirmed in arbitral case law. For example, the Decision on Jurisdiction rendered in the Amco arbitration sets out the principle in general terms:
like any other convention, a convention to arbitrate is not to be construed restrictively, nor, as a matter of fact, broadly or liberally. It is to be construed in a way which leads to find out and to respect the common will of the parties: such a method of interpretation is but the application of the fundamental principle pacta sunt servanda, a principle common, indeed, to all systems of internal law and to international law.
The interpretation of arbitration agreements by the French courts has, likewise, never been strict nor restrictive.
33 Another subsidiary principle is that, as far as possible, a commercially logical and sensible construction is to be preferred over another that is commercially illogical (see Law Debenture Trust Corporation Plc v Elektrim Finance BV  2 Lloyd's Rep 755 at ). In the present case, the Judge applied this principle at – of the Judgment:
In the absence of an administering authority, the adoption of the ICC Rules is likely to be construed as designating the ICC to be the institution conducting the arbitration. Further the selection of a particular institutional arbitral body to conduct the arbitration will be construed as also selecting the rules of that body to govern the procedure adopted in the arbitration. [David Joseph QC, Jurisdiction and Arbitration Agreements and their Enforcement (Sweet & Maxwell, 2005)] states at para 4.27:
In many cases parties will expressly agree to submit disputes to a particular institutional arbitral body. … An agreement to refer disputes to such a body will be deemed to incorporate an agreement to abide by the rules and procedures of that body in force at the time arbitration is commenced. Not only will the arbitration be governed by that institution's rules but it will also be administered by that organisation.
The present case, however, despite the nomination of the SIAC as the body to conduct the arbitration, is not an example of institutional arbitration by the SIAC, since the arbitration agreement specifically designated the use of [the] ICC Rules instead. … By designating a separate administering authority, the parties indicated that the adoption of the ICC Rules was not a selection of the administering authority but only an agreement for the arbitration to take place by reference to those rules.
34 This approach to the interpretation of an arbitration agreement is necessary to uphold the underlying and fundamental principle of party autonomy as far as possible in the selection of the kind of arbitration and the terms of the arbitration. Given the inherently private and consensual nature of arbitration, our courts will ordinarily respect the principle of party autonomy and give effect to (workable) agreed arbitration arrangements in international arbitration, subject only to any public policy considerations to the contrary.
[emphasis in original in italics]
(a) Firstly, the principles for construing an arbitration agreement are assimilated with those applicable for construing any other commercial agreement. The fundamental objective of construing a commercial agreement is to give effect to the parties' intention as they have manifested it objectively in that agreement. So too, the fundamental purpose of construing an arbitration agreement is to give effect to the parties' intention as they have manifested it objectively in their arbitration agreement.
(b) Secondly, the court should, as far as possible, construe an arbitration agreement so as to give effect to a clear intention evinced by the parties to settle their disputes by arbitration. This gives rise to two subsidiary principles: first, that the courts should not construe an arbitration agreement restrictively or strictly and second, the courts should prefer a commercially logical and sensible construction over one which is commercially illogical.
(c) Thirdly, a defect in an arbitration agreement does not render it void ab initio unless the defect is so fundamental or irretrievable as to negate the parties' intent or agreement to arbitrate.
9.2 If the parties have agreed that any arbitrator is to be appointed by one or more of the parties, or by a third person including by the arbitrators already appointed, that agreement shall be deemed an agreement to nominate an arbitrator under these Rules.
9.3 In all cases, the arbitrators nominated by the parties, or by any third person including by the arbitrators already appointed, shall be subject to appointment by the President in his discretion.
[emphasis added in italics and bold italics]
I also reject the plaintiff's argument that the Chairman has or retains any institutional powers of appointment or that the sentence in question in the Arbitration Agreement is conceptually akin to parties agreeing to apply an earlier edition of the SIAC Rules. As explained at  above, the Chairman possessed institutional powers to appoint a sole arbitrator before April 2013. However, in r 6.3 of the SIAC Rules 2013, the reference to Chairman was amended to the President. Additionally, rr 1.3 and 1.4 of the SIAC Rules 2013 expressly amended the previous editions of the SIAC Rules to state that "Chairman" would from 1 April 2013 onwards mean "President". Therefore, at the time when parties chose to incorporate the SIAC Rules 2016 by reference into the Arbitration Agreement (ie, on 18 May 2020 when the Contract was concluded) (see  above), they must be taken to have known that the Chairman no longer had or retained any institutional powers to appoint an arbitrator. On the contrary, it was only the President under r 9.3 of the SIAC Rules 2016 who was conferred that power, upon nomination by the parties or a third person. Thus, the Arbitrator was, in my view, undoubtedly correct in noting that "if the parties intended for the Chairman to 'appoint' (rather than 'nominate') the sole arbitrator, notwithstanding that the SIAC Rules incorporated at the time of commencement of proceedings may provide otherwise, they would have stated so explicitly; mere reference to the Chairman is not sufficient".75 Similarly, I cannot see how it would be conceptually sound to come to the conclusion that the parties wanted an earlier edition of the SIAC Rules to apply simply by using the word Chairman in the Arbitration Agreement.
10.2 If within 21 days after the date of commencement of the arbitration, or within the period otherwise agreed by the parties or set by the Registrar, the parties have not reached agreement on the nomination of a sole arbitrator, or if at any time either party so requests, the President shall appoint the sole arbitrator. [emphasis added]
2. Rule 10.2
a. Default procedure for the nomination and appointment of a sole arbitrator
8.29 Parties have a limited time within which they can seek to reach an agreement on a sole arbitrator. This ensures that one or more parties cannot derail the arbitration simply by refusing to cooperate in the constitution of the tribunal.
8.30 Rule 10.2 provides that in the event the parties fail to reach an agreement on a sole arbitrator within 21 days after the date of the commencement of the arbitration (ie the receipt by the Registrar of the complete Notice of Arbitration (39)), or at any time if a party so requests, (40) the SIAC President 'shall appoint the sole arbitrator'. (41) The Registrar may decide (42) or the parties may agree to extend or reduce the 21-day time limit referenced in Rule 10.2 for the parties to reach an agreement on a sole arbitrator.
8.31 When required to act under Rule 10.2, the SIAC President generally chooses a candidate from the SIAC Panel of Arbitrators (which, as already noted, is not a constraint on the parties when making their nominations). … The SIAC President may appoint an arbitrator who is not on the SIAC Panel of Arbitrators but who appears on SIAC's so-called 'reserve list', which is often used for relatively low-value disputes. (45)
8.32 The SIAC President must take into account any criteria for the appointment of arbitrators agreed by the parties in their contract or set by relevant legislation. (46) The SIAC Practice Note for Administered Cases further provides that 'in all cases, the objective is to appoint an arbitrator with the attributes of integrity and competence, who is independent and impartial, and who will be perceived as such by the parties'. (47)
8.33 For cases with a large amount in dispute, involving State parties or involving complicated questions of law, the SIAC President may choose an arbitrator in consultation with two or more members of the SIAC Court and with the assistance of the SIAC Secretariat. …
Already registered ?