Arbitration - DSK v Ultrapolis - A Lesson In Delay Tactics

Introduction

By a judgment dated 9 April 2010, the Singapore High Court granted leave to a Danish company to enforce a Danish arbitral award against a Singapore company. This case reaffirms the Singapore judiciary's pro-arbitration stance. However, the case is also instructive for certain delay tactics that were employed by the losing party during the arbitration process.

The Danish company, Denmark Skibstekniske Konsulenter A/S I Likvidation ("DSK"), was represented by Rodyk & Davidson LLP's Herman Jeremiah, Loh Jen Wei and Wendy Goh.

Case facts

DSK provided consultant services for ship design. Ultrapolis 3000 Investments Ltd ("Ultrapolis") engaged DSK to design a 90m yacht (the "First Agreement"). Enclosed in the First Agreement were DSK's standard terms and conditions ("Standard Conditions"). These included an arbitration clause (clause 19) stating that disputes that could not be settled amicably be settled in accordance with the Rules of the General Court of Arbitration in Denmark.

Subsequently, the parties rescinded the First Agreement in favour of a new agreement for the design of a 100m yacht (the "New Agreement"). Both parties signed the New Agreement which referred to but did not enclose the Standard Conditions. Clause 13 of the New Agreement incorporated the Standard Conditions that would be applicable only if the matters were not regulated between the parties by the contract.

After completing and delivering 95% of the contracted work to Ultrapolis, DSK claimed for 95% of the remuneration but Ultrapolis refused to pay. DSK referred the matter to arbitration at the Danish Arbitration Institute in Denmark. After a contested hearing on the preliminary issue of jurisdiction, the Danish Arbitral Tribunal (the "Tribunal") concluded that it had jurisdiction to hear the dispute, there being an arbitration agreement which clearly referred to the Danish Arbitration Institute.

It then passed its interim award in favour of DSK. That interim award on jurisdiction was not challenged in the supervising court, i.e. the Danish court.

Thereafter, Ultrapolis refused to participate in the arbitral proceedings and a final award on the merits was awarded against it. Ultrapolis also issued proceedings in the Singapore court in April 2008, alleging defective performance in the design. Those proceedings were set aside for material nondisclosure. Subsequently, another action was commenced on 20 October 2009 but to date has not been served on DSK.

DSK...