ReSolution | Nov 2017 38
The parties to the arbitration were the seller and buyer of iron ore. On 29 October 2014, they entered into a sales contract which appended the “globaORE Standard Iron Ore Trade Agreement”. The “globaORE Standard Iron Ore Trade Agreement” contained a clause providing for arbitration under the SIAC Rules then in force and with a three-member tribunal in Singapore.
On 14 January 2015, the seller commenced SIAC arbitration against the buyer and applied for the expedited procedure under the 2013 SIAC Rules. The buyer opposed the application of the expedited procedure and insisted that three arbitrators be appointed pursuant to the arbitration agreement. In the absence of party agreement, the Vice Chairman of SIAC appointed a sole arbitrator for the expedited procedure. The buyer refused to participate in the arbitration and an award was rendered in favour of the seller on 26 August 2015 (the Award).
The seller sought to enforce the Award before the Shanghai Court. One of the key arguments raised by the buyer in resisting enforcement was that SIAC’s appointment of a sole arbitrator was contrary to the parties’ agreement for a three-member tribunal.
The Shanghai Court upheld the buyer’s argument. It found that the expedited procedure under the 2013 SIAC Rules did not exclude other means of composing a tribunal, nor empower the Chairman of SIAC to compel parties to accept a sole arbitrator despite their agreement to a three-member tribunal. Despite the fact that the arbitration agreement explicitly provided for a three-member tribunal and the buyer had expressly objected, SIAC appointed the sole arbitrator and went ahead with the expedited procedure. The Shanghai Court held that the appointment of the sole arbitrator violated the parties’ arbitration agreement. The court refused to enforce the award under Article V(1)(d) of the New York Convention. In support of its decision, the Shanghai Court emphasised that party autonomy is the foundation of arbitration proceedings.
The Shanghai No.1 Intermediate Court (the Shanghai Court) recently refused to enforce a SIAC award under Article V(1)(d) of the New York Convention, which provides that the award may be refused if “[T]he composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties…” The SIAC award was made under the expedited procedure of the 2013 SIAC Rules (5th Edition).
PRC Court refuses to enforce an SIAC award made under Expedited Procedure
- India -
Kathryn Sanger, Stella Hu & Tomas Furlong