Case in Brief Astro Nusantara International BV v PT Ayunda Prima Mitra CACV272/2015, 5 December 2016 )
Recently the Hong Kong Court of Appeal dismissed an out of time appeal against enforcement, and confirmed the “choice of remedies” principle: an unsuccessful party to an international arbitration can choose to passively oppose enforcement of an award, despite abstaining from any active challenge against the award.
Background In 2005, Astro and Lippo entered into a joint venture for the provision of multimedia services in Indonesia. The parties signed a conditional subscription and shareholders’ agreement (SSA) which set out their obligations and intentions under the joint venture. In the interim period while the SSA remained conditional, three Astro subsidiaries provided funding for the joint venture. However, when the conditions fell through and the SSA failed to go unconditional, a dispute arose over the continued funding of the joint venture while the parties considered exit strategies. In October 2008, Astro commenced arbitration proceedings against Lippo in the Singapore International Arbitration Centre. Astro’s notice of arbitration sought to join the subsidiaries (Joinder Parties) to the arbitration, stating they had consented to being joined because they were not parties to the SSA. Lippo contested the joinder application; however the Tribunal held that it had the power to join additional parties as long as they consented. Thereafter between 2009 and 2010, the Tribunal rendered five awards in favour of Astro against Lippo, totalling in excess of US$130 million, approximately US$700,000 of which was awarded to the Joinder Parties as non-contractual, restitutionary relief. Lippo did not take any steps to challenge the awards or apply to have them set aside before the Singapore Court as the court of the Arbitration. Astro subsequently applied for and was granted leave to enforce the awards in Singapore by the High Court. It was not until Astro sought enforcement of the awards in various jurisdictions that First Media, a Lippo entity, opposed enforcement on jurisdictional grounds arguing that there was no agreement to arbitrate between First Media and the Joinder Parties as they were not parties to the SSA. While Astro sought enforcement in various jurisdictions, Lippo only resisted proceedings for recognition and enforcement of the award in Hong Kong, as it was the only relevant jurisdiction in which Lippo had assets that could be levied. Singapore Court of Appeal In a 2013 judgment, the Singapore Court of Appeal refused enforcement of the awards by the Joinder Parties against First Media on the grounds that there was no valid arbitration agreement between the Joinder Parties and First Media, and the Tribunal had no jurisdiction to make the awards it had in favour of the Joinder Parties against First Media.