The Finality Of Interim Arbitral Awards In Singapore – How ‘Final’ Is ‘Final’?

The 2006 UNCITRAL amendments concerned, among other matters, the use of interim awards in international arbitration, and recognised "the need for provisions in the Model Law to conform to current practices in international trade and modern means of contracting with regard to ... the granting of interim measures" (General Assembly Resolution 61/33 on 4 December 2006).

Since 2010, under section 12(1) of Singapore's International Arbitration Act (IAA), an arbitral tribunal has the power to make orders or give directions to any party for interim injunctions and interim awards. Under section 12A, the High Court has the power to make these interim orders into court orders. Section 19B provides that an award, whether final or interim, made by an arbitral tribunal pursuant to an arbitration agreement is final and binding on the parties, and that an arbitral tribunal must not vary, amend, correct, review, add to or revoke the award.

An interesting question arose in relation to these provisions of the IAA in the High Court of Singapore's recent decision in PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation (Indonesia) and another matter [2014] SGHC 146 (PT Perusahaan); essentially, how does a final award affect an interim award made previously in the same arbitration (when both are final and binding under the IAA)?

Background

PT Perusahaan Gas Negara (Persero) TBK (PGN) and CRW Joint Operation (Indonesia) (CRW) entered into a contract (Contract) based on the FIDIC 1999 Red Book for the design, procurement, installation, testing and pre-commissioning of a pipeline to convey natural gas from South Sumatra to West Java, Indonesia. A dispute arose in respect to variation claims under the Contract, and the matter was taken to the Dispute Adjudication Board (DAB) constituted under the Contract. The DAB found against PGN, requiring it to pay over USD 17 million to CRW (DAB Decision).

The Contract contained a provision requiring compliance with the DAB Decision. However, although PGN accepted this obligation, no payment was made to CRW. In response to this, in 2009 CRW instituted arbitral proceedings to compel PGN to comply with its obligations under the contract to make payment (referred to in the High Court judgement as the Secondary Dispute). PGN argued that it could not be compelled to comply with the DAB Decision unless the arbitral tribunal heard the merits of the dispute first put to the DAB (referred to in the High Court judgement as the...