CBX and CBY v. CBZ, CCA and CCB

At a glance

Parties

CBX and CBY (plaintiffs; respondents in the arbitration) v. CBZ, CCA and CCB (defendants; claimants in the arbitration)

Case no.

[2020] SGHC(I) 17, Originating Summons No 1 of 2020

Court

Singapore International Commercial Court, Anselmo Reyes IJ

Underlying award(s)

Two Phase II Partial Awards of 5 June 2019 and Final Award (Costs) of 9 August 2019 in ICC arbitrations seated in Singapore

Forum and rules

Set-aside application under the International Arbitration Act and Article 34 of the Model Law; underlying ICC arbitrations (ICC Rules 2012)

Treaty

Contractual arbitration clauses in two Sale and Purchase Agreements of 19 June 2015 (governed by Thai law)

Sector

Wind energy; share acquisition

Outcome

Set-aside applications dismissed in full (16 July 2020).

Amount

The awards ordered payment of the Remaining Amounts under Schedule 5 of the SPAs with 15% interest compounded annually, and 66% of the defendants' costs with 7.5% simple interest. The costs of the court proceedings were left for later directions.

The dispute

Under two SPAs dated 19 June 2015, CBX and CBY bought from CBZ, CCA and CCB about 98% of AAA. AAA held 59.46% of BBB, which owned wind-farm projects in Thailand. The sellers started ICC arbitrations in Singapore over late and missed payment of the first instalments. They claimed rescission and accelerated payment of the Remaining Amounts. The buyers raised set-offs and counterclaims. In Phase II the tribunal ordered the buyers to pay the Remaining Amounts according to the Schedule 5 milestones, with 15% interest compounded annually, and later issued a Costs Award against them. The buyers asked the SICC to set aside those orders and the Costs Award. They argued excess of jurisdiction, denial of natural justice and unfair prejudice to a separate ICC arbitration they had brought (the "ALRO arbitration", about land leases affected by a Thai court ruling). They also argued that compound interest, which both parties' Thai law experts agreed Thai law prohibited, offended Singapore public policy.

Key holdings

1. The tribunal did not exceed its jurisdiction. Payment of the Remaining Amounts under Schedule 5 was squarely in issue: the defendants pleaded it as a "very subsidiary claim", and the plaintiffs' counsel accepted at the hearing that payment would follow the milestones, subject to set-off. ¶¶ 19–22
2. There was no unfair prejudice and no denial of natural justice. The plaintiffs had many chances to tell the tribunal their true position, namely that the Remaining Amounts had become incapable of being triggered, but they did not. A party cannot keep arguments up its sleeve for other proceedings. Any res judicata effect in the ALRO arbitration is of their own making. ¶¶ 31–38
3. Awarding compound interest was not in excess of jurisdiction. The tribunal had power to do so under ss 12(5)(b) and 20 of the IAA. By misapprehending the parties' positions and the Thai law evidence, it wrongly exercised a power it did have, which is not a ground for setting aside (applying Lesotho Highlands v Impregilo). ¶¶ 47–49
4. There was no denial of natural justice on interest. The plaintiffs presented substantial expert evidence on the point, and the tribunal considered it. ¶ 50
5. There was no breach of Singapore public policy. Breaching Thai "public order and good morals" is not the "palpable and indisputable illegality" (obvious criminality, as in Soleimany and Westacre) that might justify intervention. Where foreign law governs and the tribunal finds no illegality, the court should not reopen the merits unless such illegality appears on the face of the award. ¶¶ 57–68
6. In any event, the compound element was severable. Had the Compound Interest Orders been set aside, 15% simple interest would have remained payable. ¶ 69
7. The challenge to the Costs Award failed with the other challenges. The court expressed doubt about its power to award the costs of the arbitration itself, or to remit costs under Article 34(4) of the Model Law, but left these questions open. ¶¶ 70–75

Procedural history

1. 19 June 2015The CBX SPA and the CBY SPA are signed.
2. 26 January 2016CBZ starts the CBX arbitration. CCA and CCB start the CBY arbitration on 25 March 2016.
3. 22 September 2017Phase I Partial Awards: rescission of the CBX SPA refused; first instalment and 15% compound interest awarded.
4. 28 September 2018The plaintiffs start a separate ICC arbitration (the ALRO arbitration) against the defendants.
5. 5 June 2019Phase II Partial Awards: Remaining Amounts Orders and Compound Interest Orders made; the plaintiffs' counterclaims dismissed.
6. 5 August 2019Correction Decision: the tribunal declines the defendants' request to correct the compound interest orders.
7. 9 August 2019Costs Award: the plaintiffs to pay 66% of the defendants' costs.
8. 16 July 2020SICC judgment dismisses the set-aside applications.

Tribunal, counsel and experts

Decided by

• Anselmo Reyes Judge, Singapore International Commercial Court

For the claimant

Rajah & Tann LLP

For the respondent

WongPartnership LLP

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Keywords

• set-aside
• Singapore International Commercial Court
• excess of jurisdiction
• natural justice
• public policy
• compound interest
• Thai law
• palpable and indisputable illegality
• Soleimany
• AJU v AJT
• res judicata
• severability
• costs of arbitration
• Article 34 Model Law
• International Arbitration Act
• wind farm
• ALRO
• ICC arbitration

Summary generated with AI from the published documents — refer to the award for the authoritative text.