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Commentary
The Shanghai Court’s decision was vetted by the PRC Supreme People’s Court (SPC), by virtue of the “reporting system” (under which lower courts must report any decision to refuse enforcement of a foreign arbitral award to the SPC for scrutiny). Therefore, the decision is significant and will be referred to as precedent for future decisions of PRC courts. The SPC has indicated a strong intent to safeguard party autonomy in such cases.
SIAC’s purported power to appoint a sole arbitrator in expedited proceedings, despite the parties having agreed a three-member tribunal, was also considered by Singapore High Court in AQZ v ARA [2015] SGHC 49. This was an application to set aside an arbitral award. A similar argument was raised by the applicant, i.e. that the arbitration should not have been conducted before a sole arbitrator (appointed, in this case, under the expeditedprocedure in the 2010 SIAC Rules (4 Edition)), since the parties had expressly agreed to arbitration before three arbitrators.
The Singapore High Court rejected this argument and upheld SIAC’s appointment of a sole arbitrator. The court adopted a “commercially sensible” construction of the arbitration agreement and decided that, by adopting the 2010 SIAC Rules into their contract, the parties had recognised the SIAC President’s power and discretion to appoint a sole arbitrator where the expedited procedure applied. The Shanghai Court, supported by the SPC, clearly takes a different view from the Singapore High Court.
SIAC has amended its latest rules (2016, 6th Edition), to prevent the same conflict from arising. Article 5.3 of the new rules provides: “[B]y agreeing to arbitration under these Rules, the parties agree that, where arbitral proceedings are conducted in accordance with the Expedited Procedure under this Rule 5, the rules and procedures set forth in Rule 5.2 shall apply even in cases where the arbitration agreement contains contrary terms” (emphasis added).
The Shanghai Court has not released its decision to the public. The information on the decision is derived from third party sources. We will update this post if the decision becomes available.
37 ReSolution | Nov 2017
Kathryn Singer
Partner
Tomas Furlong
Stella Hu
Senior Associate
Tomas Furlong
Senior Associate
PRC Court Refuses To Enforce An SIAC Award... Cont.-
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