27 July, 2018
Introduction
In Sinolanka Hotels & Spa (Private) Limited v Interna Contract SpA [2018] SGHC 157, the Singapore High Court analysed which of two arbitration agreements applied to a dispute between the parties, and gave a salutary reminder to applicants to apply under the correct provisions of the International Arbitration Act when seeking to challenge a tribunal’s jurisdictional decision.
The dispute
Sinolanka Hotels (“Sinolanka”) was the developer of the Grand Hyatt Colombo Project for Hyatt International. Interna Contract (“Interna”) is a luxury furnishing company based in Italy. After a tender exercise and negotiations, Sinolanka awarded Interna the contract to provide interior fit-out and furnishing works for the Grand Hyatt Project. The tender package contained certain particular conditions which included a clause requiring disputes to be resolved by arbitration in Sri Lanka (“the Sri Lanka Arbitration Clause”). In awarding Interna the contract, Sinolanka issued a “Letter of Acceptance” in December 2014 which contained an arbitration clause requiring disputes to be resolved by arbitration at the International Chamber of Commerce (“the ICC Arbitration Clause”). Sinolanka subsequently issued a “Contract Agreement” and memorandum of understanding in January 2015.
Disputes arose between the parties and so Interna commenced arbitration in accordance with the ICC Arbitration Clause. The parties could not agree on the seat of the arbitration and so the ICC International Court of Arbitration determined the seat to be Singapore. In the arbitration, Sinolanka argued that the operative arbitration agreement between the parties was the Sri Lanka Arbitration Clause, and not the ICC Arbitration Clause.
The Tribunal addressed the jurisdictional issue and the substantive dispute between the parties in its final award, finding against Sinolanka on both matters. Sinolanka applied to the Singapore High Court under section 10 of the International Arbitration Act for a ruling on the jurisdiction of an arbitral tribunal, and alternatively under Article 34 of the UNCITRAL Model Law for an order setting aside the final award on the basis that it lacked jurisdiction to hear the dispute.
Which arbitration agreement?
The Court found that the terms of the Contract Agreement were plain and unambiguous in stating that the Letter of Acceptance, including the ICC Arbitration Clause within it, was part of the agreement between the parties.
The Court also noted that clause 2 of the Contract Agreement set out a priority of the contractual documents when it comes to questions of interpretation. As is common in such provisions, the clause stipulated inconsistencies between two or more terms set out in the contractual documents were to be resolved by adopting the term found in the contractual document with higher stated priority. Applying this contractual rule, the ICC Arbitration Clause in the Letter of Acceptance prevailed over the Sri Lankan Arbitration Clause in the Particular Conditions.
Which provision of the International Arbitration Act?
The Court also highlighted that a party may only apply for a jurisdictional ruling under section 10 of the IAA of Article 16(3) of the UNCITRAL Model Law where the tribunal made a jurisdictional finding as a preliminary question. Where, as here, the tribunal decided on its jurisdiction as part of a final award, the Court has no power to make such a ruling. Sinolanka’s application pursuant to those provisions was therefore dismissed.
The Court also rejected Sinolanka’s application to set aside the award pursuant to Article 34(2)(a)(i) of the UNCITRAL Model Law, since the Court had already found that the parties had agreed to the ICC Arbitration Clause.
For further information, please contact:
Timothy Cooke, Partner, Virtus Law LLP (a member of the Stephenson Harwood (Singapore) Alliance)
timothy.cooke@shlegal.com
