Singapore Court of Appeal - New ruling on active and passive remedies for challenging jurisdiction in international arbitrations

Introduction

In PT First Media TBK v Astro Nusantara International BV and others [2013] SGCA 57, the Singapore Court of Appeal ruled that a party could choose to pursue either an active remedy - by challenging the preliminary award on jurisdiction - or a passive remedy - by challenging enforcement: a judgment reinforcing confidence in Singapore as an international arbitration venue.

At the heart of this case was the question of whether a party had both 'active' and 'passive' remedies where an arbitral tribunal joined additional claimants who were not party to an arbitration agreement and imposed on the defendant (which had objected to the joinder) significant liability in respect of those additional claimants.

How the dispute arose

Companies belonging to Indonesian conglomerate Lippo and Malaysian media group Astro had signed up to a joint venture whose terms were contained in a subscription and shareholders agreement to which certain Astro companies were not party. That agreement included an arbitration agreement appointing SIAC - the Singapore International Arbitration Centre - to resolve any disputes.

When a dispute arose, Astro commenced arbitration in Singapore against Lippo, including PT First Media TBK, and sought to add as additional claimants related entities which were not party to the subscription and shareholders agreement. Predictably, PT First Media contested that joinder. The tribunal determined at a preliminary hearing that it had the power to join the additional claimants to the arbitration under rule 24(b) of the SIAC Rules. As the additional claimants...