Decoding Singapore's International Arbitration

Act, Section 12(7)

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by J E A N H O *

ABSTRACT
Singapore has consistently maintained that it aspires to be an international arbitration hub. This
involves looking to leading arbitration centres and institutions for guidance and aligning its legal
framework with jurisdictions that have established a reputation as being facilitative towards the
conduct of arbitration proceedings. Whether courts should only order interim remedies in support of
arbitrations seated locally but notforeign arbitrations is an issue that has been resolved in favour
of empowering the courts to order interim relief regardless of the location of the seat of arbitration
under the Model Law. Any country that has adopted the Model Law should presumably embrace
the same approach with respect to this issue. Singapore, despite having adopted the Model Law, has
departedfrom the Model Law framework as a result of a recent decision of Singapore's highest
court, the Court of Appeal, that interpreted International Arbitration Act, section 12(7) as permitting
Singapore courts to award interim relief in support of international arbitrations only when the
arbitration is seated in Singapore. The author disagrees with the Court of Appeal's interpretation
of section 12(7) because it is impossiblefor Singapore to achieve international renown by espousing
an alignment with international practice in theory but renouncing such practice in reality.

T H E GRANT of interim relief by the courts in support of foreign arbitrations is

a feature of jurisdictions that have adopted, in whole or in part, the UNCITRAL
Model Law on International Commercial Arbitration ('Model Law'). 1 Singapore,

* Lecturer, Faculty of Law, National University of Singapore, LLM (NYU); LLB (NUS). Many thanks to my
colleagues Profs. M. Sornarajah, Tang Hang Wu, Jeffrey Pinsler SC, Tracey Evans Chan, and friends Wang
Ying and Anna Tevini for their support and insightful comments on earlier drafts. The usual disclaimers apply.
1
11 December 1985, 24 ILM 1302. A survey of the case law and commentaries in Canada (The Tamos (2000),
[2000] 2 FC 427; Trade Fortune Inc. v. Amalgamated Mill Supplies Ltd (1994), [1994] 89 BCLR (2d) 132);
Australia (Clough v. Oil and Natural Gas Corp. Ltd (No. 3) (2007), [2007] FCA 2082; Comandate Marine Corp. v. Pan
Australia Shipping Pty Ltd (2006), [2006] FCAFC 192); New Zealand (Sensation Yachts Ltd v. Darby Maritime Ltd
[2002] M 1146/SW02); India (Bhatia International v. Bulk Trading SA [2002] 1 LRI 703); Malaysia (Sundra
Rajoo and W.S.W. Davidson, The Arbitration Act 2005: UNCITRAL Model Law as Applied in Malaysia (Sweet &
Maxwell, Malaysia, 2007), pp. 22-23 and 57); and Hong Kong (China Minsheng Banking Corp. Ltd v. Dichain
Holdings Ltd and another [2006] HKEC 2155; The Lady Muriel [1995] 2 HKC 320) reveals that the prevailing
trend in these Model Law jurisdictions is the judicial grant of interim relief in support of foreign arbitrations.

ARBITRATION INTERNATIONAL, Vol. 24, No. 4

© LCIA, 2008

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610 Arbitration International, Volume 24 Issue 4

although a Model Law jurisdiction, has rejected this approach. The Court of
Appeal in Swift-Fortune Ltd v. Magnified Marine SA ('Swift-Fortune')2 held that section
12(7) of the International Arbitration Act (IAA),3 which provides for court-ordered

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interim relief in support of international arbitrations, only applies when the seat
of the arbitration is Singapore. This interpretation of IAA, section 12(7) remains
an unchallenged decision emanating from the highest court in Singapore. 4 The
existence of a binding judicial precedent that removes Singapore from the company
of jurisdictions that permit the grant of interim relief regardless of the location of
the seat of an international arbitration makes it imperative and opportune to
examine the reasoning behind this landmark decision.

I. F A C T S
In Swift-Fortune, the Panamanian defendant company contracted to sell a vessel to
the Liberian plaintiff company for US$9.5 million. 5 The contract, which was
governed by English law, provided for the legal completion of the sale in
Singapore and the delivery of the vessel in China. Any dispute arising from the
contract was to be referred to arbitration in London. 6 Due to delay in the
delivery of the vessel, the plaintiff claimed substantial losses and made an ex parte
application for a Mareva injunction to restrain the defendant (a one-ship
company) 7 from dealing with its assets in Singapore for the value of US$2.5
million. 8 In denying the grant of the injunction, the Court of Appeal agreed with
the High Court on the following:

(a) unless otherwise provided, Singapore legislation has no extraterritorial

application; 9 and
(b) Parliament could not have intended IAA, section 12(7) to grant general power
to assist foreign arbitrations because sections 6 and 7 already carve out
exceptions permitting the Singapore courts to assist foreign arbitrations. 10

In addition, the Court of Appeal held that:

2
[2006] SGHC 36; [2006] SGCA 42.
3
Cap. 143A, 2002 Rev. Ed. Sing.
4
An appeal to the Court of Appeal from the contemporaneous and conflicting High Court decision on the
same issue, Front Carriers Ltd v. Atlantis & Orient Shipping Corp. ('Front Carriers') [2006] SGHC 127, was
eventually dropped. To date, cases involving IAA, s. 12(7) and decided after Swift-Fortune have not
reconsidered the application of s. 12(7) to foreign arbitrations; see Wu Yang Construction Group Ltd v. Mao Tong
Hui and another [2008] 2 SLR 350; NCC International AB v. Alliance Concrete Singapore Pte Ltd [2008] SGCA 5;
Petrosal SA v. Stainby Overseas Ltd and others ('Petrosal') [2008] SGHC 64.
5
[2006] SGCA 42 at para. 8.
6
Ibid.
7
[2006] SGHC 36 at para. 2.
8
[2006] SGCA 42 at para. 9.
9
[2006] SGHC 36 at paras. 42-43; [2006] SGCA 42 at para. 46.
10
[2006] SGHC 36 at paras. 45-50; [2006] SGCA 42 at para. 58.
 Decoding Singapore's International Arbitration Act, Section 12(7) 611

(a) the objective of the IAA is to promote international arbitration in

Singapore; 11
(b) Article 9 of the Model Law is merely a declaratory provision stating

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the compatibility of arbitration proceedings and court-ordered interim
measures and has no bearing on how IAA, section 12(7) should be
interpreted; 12 and
(c) IAA, section 12(7) does not independently confer on the courts the power
to order interim injunctive measures the way sections 12(1) to (6) do for the
arbitral tribunals; it is section 4(10) of the Civil Law Act (CLA) 13 that
animates the court's injunctive powers in section 12(7).14

After its appeal was dismissed by the Court of Appeal, the plaintiff in Swift-
Fortune made an application to the English High Court seeking the same relief
that it did from the Court of Appeal. 15 Steel J found that the English High Court
had jurisdiction to grant the Mareva injunction requested but rejected the
application on its merits. 16

II. E X T R A T E R R I T O R I A L I T Y A N D J U D I C I A L G R A N T O F
INTERIM RELIEF
The coercive powers of the court are crucial to the preservation of the position of
the parties before and during arbitral proceedings and the enforcement of awards
issued by the arbitral tribunal at the end. 17 However, the jurisdiction of national
courts is limited by the presumption against the extraterritorial application of
domestic laws, 18 which is based on the principle of mutual sovereign respect. 19
This presumption has been significantly eroded in the context of seeking interim

11
[2006] SGCA 42 at paras. 14 and 17.
12
[2006] SGCA 42 at para. 33.
13
Cap. 43, 1999 Rev. Ed. Sing.
14
[2006] SGCA 42 at paras. 60-62, 64-85 and 93-94.
15
Swift-Fortune Ltd v. Magnified Marine SA [2007] EWHC 1630 (Comm) ('Swift-Fortune II').
16
Swift-Fortune II, ibid, at paras. 17 and 19—34. Steel J held that the claimant, by turning to the English courts
as an afterthought, was forum shopping. According to Steel J, there was no logic in pursuing an application
before the Singapore courts which had no jurisdiction to decide it. However, as the High Court in Swift-
Fortune and Front Carriers had concurrently endorsed different interpretations of IAA, s. 12(7), the claimant in
Swift-Fortune II had no way of knowing which interpretation would prevail until its appeal was heard by the
Court of Appeal. As the defendant's only known assets were located in Singapore, it made every sense for
the claimant in Swift-Fortune II to first seek relief from the Singapore courts. Even if a Mareva injunction was
awarded by Steel J, it cannot secure the defendant's assets in Singapore because the Reciprocal Enforcement
of Foreign Judgements Act (Cap. 265, 2001 Rev. Ed. Sing.), s. 2(1)) only permits die enforcement of foreign
money judgments and not injunctive relief.
17
See Coppee Lavalin v. Ken-Ren Chemicals and Fertilisers Ltd [1995] 1 AC 38 at 53.
18
Dicey, Morris and Collins on the Conflict of Laws (14th edn, Sir Lawrence Collins (ed.), Sweet & Maxwell, London,
2006), vol. 1, para. 1-038. However, drawing examples from various English statutes, the authors argue that
even if a presumption against extraterritoriality exists, it is 'easily rebutted'.
19
R v. Jameson (1896), [1896] 2 QB 425 (DC) at 430, per Lord Russell CJ.
612 Arbitration International, Volume 24 Issue 4

relief from national courts in support of arbitral proceedings. 20 Key international

instruments drafted with the aim of regulating the practice of arbitration by
harmonising discordant national laws, 21 namely the Model Law and the

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Convention on the Recognition and Enforcement of Foreign Arbitral Awards
('New York Convention'), 22 do not encourage national courts to assist
international arbitrations seated locally to the exclusion of those seated abroad.
The High Court decision in WSG Mmbus Pte Ltd v. Board of Controlfor Cricket in Sri
Lanka had already established that extraterritoriality was not a bar to the
applicability of IAA, section 12(7).23 Having backed the harmonisation drive, 24
denying support now to foreign international arbitrations by reviving the
presumption against extraterritoriality is clearly at odds with Singapore's
international commitments.
The existence of other provisions in the IAA that provide for the
extraterritorial grant of interim relief need not curtail the territorial scope of
section 12(7) because, as the Court of Appeal rightly pointed out, the situations to
which IAA, sections 6 and 7, and section 12(7) apply are different.25 The Court of
Appeal stated unequivocally that IAA, sections 6 and 7 'cannot affect the
interpretation of [section] 12(7)'.26

III. T H E S E A T A N D J U D I C I A L G R A N T O F I N T E R I M R E L I E F
No statement on whether IAA, section 12(7) was destined to apply to foreign
arbitrations was made during parliamentary debates on the adoption of the IAA.
After the International Arbitration Bill which adopted the Model Law was
passed, the then Minister of State for Law, Associate Professor H o Peng Kee,
credited the Model Law as 'form[ing] the basis of Singapore's IAA'.27 Since IAA,
section 12(7) and Model Law, Article 9 both address the judicial grant of interim

20
See Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, 27
September 1968, [1972] JOL 299/32, Art. 24; Model Law, Art. 1(2); W. Laurence Craig, 'Some Trends and
Developments in the Laws and Practice of International Commercial Arbitration' in (1995) 30 Tex. Int'l LJ
1 at p. 38; Channel Tunnel Group v. Balfour Beatty Construction ^Channel Tunnel') (1992), [1993] 2 WLR 262 (HL)
at 361-365; Alan Redfern, Arbitration and the Courts: Interim Measures of Protection: Is the Tide About
to Turn?' in (1995) 30 Tex. Int'l LJ 71 at p. 87; Claude Reymond, 'The Channel Tunnel Case and the Law
of International Arbitration', Case Comment in (1993) 107 LQR (July) 337 at 341; Arbitration Act 1996 (c.
23) ('UKAA'), s. 2(3)(b).
21
Gabrielle Kaufman-Kohler, 'Globalization of Arbitral Procedure' in (2003) 36 Vand.J Transnat'lL 1313 at p. 1321.
22
10 June 1958, 330 UNTS 38.
23
[2002] SGHC 104. Lee Sieu Kin JC (as he then was) maintained an antisuit injunction against the
defendants who commenced an action in the Colombo High Court even though the agreement with the
plaintiffs provided for arbitration in Singapore in the event of a dispute. The fact that the arbitration here
was seated in Singapore may have resulted in a greater willingness of the High Court to overcome the
presumption against extraterritoriality.
24
The New York Convention entered into force in Singapore on 19 November 1986, while the Model Law
was given the force of law in Singapore when the IAA was promulgated on 27 January 1995.
25
[2006] SGCA 42 at para. 57. IAA, ss. 6 and 7 concern the grant of relief as ancillary security to an
application for a stay of court proceedings, while s. 12(7) allows parties to request interim measures as the
principal relief.
26
[2006] SGCA 42 at para. 58.
27
Parliamentary Debates, vol. 73, col. 2117 at 2214 (5 October 2001).
 Decoding Singapore's International Arbitration Act, Section 12(7) 613

relief,28 Associate Professor Ho's statement favours the view that Model Law,
Article 9, is relevant to the interpretation of LAA, section 12(7). The Court of
Appeal in Swift-Fortune relied on the 1993 Supplementary Note on the revised

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draft of the International Arbitration Bill by the Law Reform Subcommittee of
the Singapore Academy of Law (LRC Note), 29 as authority that court-ordered
interim relief is only available to international arbitrations seated in Singapore. 30
However, the LRC Note is silent on whether all the provisions of the LAA cease to
apply in foreign international arbitrations and therefore cannot be stretched to
support the Court of Appeal's finding. Model Law, Article 1(2), already provides
for the non-applicability of the vast majority of Model Law provisions in the event
that the seat of arbitration is not located in the country where the Model Law
provisions are enacted. 31 Article 9, and by extension its counterpart LAA, section
12(7), are exceptional provisions, their extended reach justified by the need to
preserve the parties' positions so as not to prejudice the continuation of the
arbitration proceedings. 32 Since the inclination of other Model Law jurisdictions
is to permit judicial assistance to foreign arbitrations, 33 it is improbable that
Parliament envisaged Singapore being able to achieve the conflicting objectives of
'keep[ing] pace with' and yet renouncing 'international standards'. 34 By giving
the Model Law the force of law in Singapore and highlighting die relevance of
what is being done outside Singapore, it is likelier that Parliament intended
Singapore to emulate the practice of other Model Law jurisdictions in allowing
the courts to award interim relief in support of foreign arbitrations.

IV S O U R C E O F P O W E R O F JUDICIAL G R A N T O F
INJUNCTIVE RELIEF
The Court of Appeal identified CLA, section 4(10), as the provision that
authorises the Singapore courts to grant interim injunctive relief in aid of

28
IAA, s. 12(7): 'The High Court or a Judge thereof shall have, for the purpose of and in relation to an
arbitration to which this Part applies, the same power of making orders in respect of matters set out in
subsection (1) as it has for the purpose of and in relation to an action or matter in the court'. Note: 'this Part'
refers to Part II of the IAA which, according to s. 5, applies to international arbitrations.
Model Law, Art. 9: 'It is not incompatible with an arbitration agreement for a party to request, before or during
arbitral proceedings, from a court an interim measure of protection and for a court to grant such measure'.
29
See Singapore Academy of Law, available at www.sal.org.sg/digitallibrary/Lists/Law%20Reform%20Reports/
Attachments/1 /review_of_arbitration_laws.pdf.
30
[2006] SGCA 42 at para. 39.
31
Model Law, Art. 1(2): 'The provisions of this Law, except Articles 8, 9, 35 and 36, apply only if the place of
arbitration is in the territory of this State'.
32
Coop International Pte Ltd v.EbelSA [1998] SGHC 425 at paras. 134-135. See also Howard M. Holtzmann and
Joseph E. Neuhaus, A Guide to the UNCITRAL Model Law on International Commercial Arbitration: Legislative History
and Commentary (Kluwer Law and Taxation, Deventer, 1987), p. 35; Report of the Secretary-General,
Analytical Commentary on Draft Text of a Model Law on International Commercial Arbitration (UNCITRAL, A/CN.9/
264, 1985); XVI (104) TB WCITRAL 115. See also, Explanatory Note by the UNCITRAL Secretariat on the
1985 Model Law on International Commercial Arbitration, as amended in 2006, at para. 22, available at
www.uncitral.org/pdf/english/texts/arbitration/ml-arb/MLARB-explanatoryNote20-9-07.pdf.
33
Supra note 1.
34
Parliamentary Debates, vol. 73, col. 2117 at 2223 (5 October 2001).
614 Arbitration International, Volume 24 Issue 4

proceedings. 35 Unlike IAA, sections 12(1) to (6), which detail the powers
exercisable by the arbitral tribunal, section 12(7) only provides that the High
Court has the same powers in relation to arbitral proceedings and court actions,

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without defining what those powers are. Where injunctive relief is sought, the
parameters for the exercise of the court's powers are found in CLA, section 4(10),
not IAA, section 12(7). The Court of Appeal's reasoning that recourse must be
had to CLA, section 4(10), when considering a request for interim injunctive
relief, which makes section 4(10) the relevant source of statutory power, 36 is
flawless. The Court of Appeal in Swift-Fortune did not take a stand on the
applicability of CLA, section 4(10), to foreign proceedings and arbitrations
because this was not an issue on appeal. However, as the Court of Appeal had
restricted the applicability of IAA, section 12(7), to Singapore international
arbitrations, it expressed concern that if CLA, section 4(10), were to apply to
foreign arbitrations (which was in all likelihood unintended by the legislature
when the CLA was enacted in 1878), it would have a broader area of application
than IAA, section 12(7).37 To acknowledge that IAA, section 12(7), applies to
foreign international arbitrations would end this concern. It is regressive to look
to an 1878 provision for an answer on the possibility of courts granting interim
relief in support of foreign arbitrations.

V CONCLUDING REMARKS
The time may be ripe for Parliament to confirm the scope of IAA, section 12(7),
because with international transactions and international disputes on the rise,
there will be many more plaintiffs like the one in Swift-Fortune. The drafters of the
New York Convention appreciated that even if an interim or final arbitral award
for relief can only be issued in one jurisdiction, the enforcement of that award
against a party's assets can take place in several. Compelling parties to select as
the seat of arbitration the place where assets are located, at the risk of forfeiture,
is not only out of step with international practice, but also an impediment to
Singapore's open desire to establish itself as an international arbitration hub.

35
The earliest English case requesting injunctive relief in support of an arbitration was Siskina v. Distos Campania
Madera SA ('The Siskina') (1976), [1977] 3 WLR 818 (HL), where the House of Lords held that since an
injunction is a remedy and not a cause of action, the jurisdiction of the court to grant the injunction is only
established when the substantive cause of action to which such remedy is ancillary is justiciable by the court.
Although the persuasive value of The Siskina in England has been greatly diminished by the holding in
Channel Tunnel and the enactment of UKAA, ss. 2(3)(b) and 44, The Siskina remains good law in Singapore.
The Court of Appeal in Karaha Bodas Co. v. Pertamina Energy Trading Ltd [2006] 1 SLR 112, denied the
plaintiff's application for a Mareva injunction, for the sole purpose of enforcing an existing arbitral award, on
the ground that it had no accrued right of action against the defendant in Singapore. See also Petroval [2008]
SGHC 64 at paras. 13-16 where the High Court declined to depart from the principles set out in The
Siskina.
36
[2006] SGCA 42 at para. 62.
37
[2006] SGCA 42 at paras. 64 and 93-94.