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

In Rakna Arakshaka Lanka Ltd ("RALL") v Avant Garde Maritime Services (Private) Limited ("AGMS") [2018] SGHC 78, 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 ("IAA") 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.

Background

The underlying dispute arose between two Sri Lanka incorporated companies under an umbrella Master Agreement (the "Agreement") concerning various maritime security-related projects.

RALL, as a state affiliated company, was required to procure authorizations and approvals necessary for AGMS to operate these projects in Sri Lanka. Following a regime change in Sri Lanka and the subsequent detention of one of the vessels operated by AGMS under Agreement, AGMS commenced arbitral proceedings on the basis that RALL had breached the Agreement. The Agreement provided for disputes to be referred to arbitration in Singapore under the rules of the Singapore International Arbitration Centre ("SIAC").

RALL did not participate in the arbitration despite having what the court described as "ample opportunity" to do so. It did however write a series of letters to the SIAC; these included:

a letter of 21 August 2015 alleging the disputes were beyond the scope of the arbitration agreement and the arbitration conflicted with Sri Lankan public policy. The Tribunal considered that this letter did not constitute a proper objection to the Tribunal's jurisdiction; and a letter of 12 November 2015, informing the SIAC that settlement had been achieved and that it was no longer necessary to proceed with the arbitration. A preliminary hearing was convened after this position was challenged by AGMS, in which RALL chose not to participate. The Tribunal found that the dispute was still alive. The arbitration therefore proceeded, and a final award ("Award") was rendered in favour of AGMS in November 2016.

RALL's setting-aside application

In February 2017, RALL filed an application to set aside the Award on the following grounds:-

that the Award dealt with matters beyond the scope of the...