Enforcing emergency arbitral awards: Time to visit Singapore?

The Singapore High Court recently confirmed that foreign emergency arbitral awards are enforceable under the Singapore International Arbitration Act 1994 (IAA) (as amended), like any other foreign arbitral award. The IAA provides for the enforceability of Singapore-seated emergency arbitration awards, but does not address expressly the enforceability of foreign emergency awards. In CVG v CVH [2022] SGHC 249, the Court was asked to set aside an order enforcing a foreign emergency arbitral award. Although it ultimately refused to enforce the award on natural justice grounds, the Court’s finding that foreign emergency arbitral awards are enforceable in Singapore is a welcome sign for others seeking to enforce such an award abroad.

Factual background

CVH (the Defendant) was the Singaporean franchisee of CVG (the Claimant). The Claimant alleged a breach of the franchise agreements, and in response the Defendant purported to terminate the agreements based on the Claimant’s material breaches and / or its anticipatory repudiation. The Claimant commenced arbitral proceedings with the International Centre for Dispute Resolution (ICDR), successfully seeking emergency relief. Those proceedings were seated in Pennsylvania and governed by Pennsylvanian law. The Claimant subsequently obtained an enforcement order allowing it to enforce the resulting emergency arbitral award in Singapore. The Defendant applied to the Singapore High Court to set aside the enforcement order on the following grounds:

• foreign emergency arbitral awards cannot be enforced in Singapore;
• the award was not binding;
• the tribunal exceeded its jurisdiction;
• the tribunal failed to address essential issues brought before it; and
• there was a breach of natural justice.

Outcome

The Defendant succeeded only on the breach of natural justice ground, resulting in the Court setting aside the enforcement order. The Claimant had raised a new case (albeit in the alternative) in its post-hearing submission which the Defendant was not afforded the opportunity to address in the arbitration. This alone was found by the Court to have prejudiced the Defendant.

While the Court rejected the other grounds, its finding that foreign emergency awards are in principle enforceable in Singapore is significant. The Defendant argued that the lack of express reference to emergency arbitration or emergency arbitrators in Part 3 of the Act (governing foreign awards) demonstrated the Parliament’s intention to exclude emergency arbitral awards from the enforcement regime – in other words, the award could not be enforced because it was not an “arbitral award” and thus not a “foreign award”.

The Court rejected that argument, finding that the term “arbitral award” contained in Part 3 (s 27(1)) of the Act includes emergency arbitral awards. Therefore, s 29 of the Act allows Singapore courts to enforce foreign awards made by emergency arbitrators. In reaching this conclusion, the Court applied a “purposive interpretation” of the legislation, considering the possible interpretations of the provision and the purpose of the Act.  

Key takeaways

The Court’s decision highlights the perils that may result from developing a new case or argument in post-hearing submissions if a counterparty does not have an opportunity to respond. Most significant, however, is the welcome sign that emergency arbitral awards in foreign-seated arbitrations are enforceable in Singapore. This is particularly noteworthy given a lack of broad consensus across other jurisdictions.

Doubt about the enforceability of foreign emergency awards has existed in the arbitration community for some time. While the New York Convention requires contracting states to recognise and enforce foreign awards, emergency arbitrators’ decisions are not always treated, or issued, as awards. Moreover, emergency awards are typically not considered to be “final” as they can be modified or overturned by the arbitral tribunal once constituted. For example, Article 29 of the ICC Rules 2021 stipulates that the emergency arbitrator’s decision “shall take the form of an order”, which may be subsequently modified, terminated or annulled by the arbitral tribunal. In contrast, Article 9B of the LCIA Rules 2020 permits emergency arbitrators’ decisions to be made as orders or awards, with the latter taking effect as an award under Article 26.8 when made. However, the final and binding nature of any award is still subject to the confirmation, variation, discharge or revocation of the arbitral tribunal.

The Singapore High Court sidestepped this issue on the basis that the test under the International Arbitration Act is whether the arbitral award is binding, not final, and it was clear from the ICDR Rules that the emergency arbitral award was binding when rendered. Whether the decision in CVG v CVH gives rise to an increase in foreign emergency awards being enforced in Singapore and whether other jurisdictions will follow suit remains to be seen.