In AJU v AJT [2011] SGCA 41, the Singapore Court of Appeal overturned a High Court judgment which set aside an arbitral tribunal's decision on public policy grounds (see Legal update, Singapore Court of Appeal: High Court not entitled to re-open arbitral tribunal's findings on public policy grounds). The tribunal had found that a settlement agreement entered into between the parties was legal and enforceable. The High Court set aside the arbitral tribunal's decision on the basis that the settlement agreement was illegal and, by enforcing an illegal agreement, the tribunal breached the public policy of Singapore.

The Singapore courts have a statutory power to set aside arbitral awards if the award conflicts with Singapore public policy in accordance with Article 34(2)(b)(ii) of the UNCITRAL Model Law. However, the Court of Appeal ruled that the alleged conflict with Singapore public policy did not entitle the High Court to re-open the arbitral tribunal's findings of fact and therefore overturned the High Court's ruling.

The Court of Appeal ruled that, when considering an application to either enforce or set aside an arbitral award, the existence of a potential public policy issue does not automatically entitle a court to re-open an arbitral tribunal's findings. It held that a tribunal's findings can only be re-opened on public policy grounds when the tribunal has made an error in deciding what constitutes a violation of Singapore public policy. The Court of Appeal reasoned that court intervention is justified in such cases because the state does not give authority to arbitral tribunals to decide what constitutes a violation of Singapore public policy. However, neither errors of law that do not involve a misinterpretation of Singapore public policy nor errors of fact may be re-opened on public policy grounds.

This case demonstrates the Singapore courts' continued pro-arbitration jurisprudence. The Court of Appeal's judgment reinforces the general rule that the courts will only set aside an arbitral award in very limited circumstances and will respect the autonomy of arbitral proceedings.

In Larsen Oil and Gas Pte Ltd v Petropod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] SGCA 21, the Singapore Court of Appeal upheld the decision of the Singapore High Court that most insolvency-related disputes are not suitable for arbitration due to public interest considerations (see Legal update, Singapore Court of Appeal holds that insolvency disputes are non-arbitrable). Neither the Arbitration Act nor the International Arbitration Act stipulate which disputes are arbitrable and which are non-arbitrable.

After reviewing several cases decided by the Singapore, English and Australian courts, the Court of Appeal found that Singapore's insolvency regime's objective of facilitating claims by a company's creditors against the company and its pre-insolvency management overrides the freedom of the company's pre-insolvency management to choose the forum where such disputes are to be heard. The Court of Appeal therefore came to the conclusion that the courts should treat disputes arising from the operation of statutory provisions of the insolvency regime per se as non-arbitrable even if the parties expressly include them within the scope of the arbitration agreement. The Court of Appeal also dealt with the arbitrability of disputes relating to pre-insolvency rights and obligations of an insolvent company

This case supports the position taken by the High Court that, while the Singapore courts are generally pro-arbitration and will enforce a valid arbitration agreement, the question of the arbitrability of a dispute will still be subject to public interest considerations. This judgment is one of the first cases in Singapore where the court has conducted a detailed discussion on the arbitrability of insolvency claims. This decision will prove a useful guide in the future to help determine which claims involving an insolvent company are arbitrable and which are not.

In Kempinski Hotels SA v PT Prima International Development [2011] SGHC 171, the Singapore High Court set aside three arbitral awards on the basis that the arbitral tribunal determined an issue which was not formally pleaded by the respondent in the proceedings (see Legal update, Singapore High Court sets aside arbitral awards where arbitral tribunal determined unpleaded issue). In this case, the issue in question was raised by way of a letter addressed to the arbitral tribunal. The High Court found that Article 23 of the UNCITRAL Model Law binds an arbitral tribunal to decide a case in accordance with the parties' pleadings. Accordingly, an arbitral tribunal is not entitled to decide issues which go beyond those pleadings. In the present case, the arbitral tribunal had decided an issue beyond the scope of the matters formally submitted to it.

This case demonstrates that the Singapore courts will be prepared to entertain applications to set aside an award where an arbitral tribunal has acted outside its jurisdiction. It highlights the risks where an arbitral tribunal entertains lengthy correspondence from parties raising issues not included in pleadings. As the High Court noted, where a party wishes to raise a new issue before an arbitral tribunal, an application should first be made to amend its pleading.

On 20 October 2011, the Singapore Ministry of Law published the International Arbitration (Amendment) Bill proposing amendments to the International Arbitration Act (IAA) and commenced a one-month consultation on its proposals (see Legal update, Proposed amendments to Singapore's International Arbitration Act). The main amendments proposed in the bill are to:

The consultation period closed on 21 November 2011. As at the date of this article, the bill is still in draft form.