Despite Singapore's position as a leading arbitral venue, there have been relatively few cases where parties have sought to challenge the resulting award. The latest attempt by the Government of the Philippines *2 (GOP) against an ICC award relating to Terminal 3 of the Ninoy Aquino International Airport has, like many other cases, failed.
* 2 Government of the Republic of the Philippines v Philippine International Air Terminals Co, Inc  1SLR 278
In the underlying ICC arbitration, the GOP had objected to the tribunal's claim to jurisdiction over the dispute. Additionally, there was a separate dispute regarding the governing law of the arbitration agreement, and of the proceedings. The tribunal issued an order for the governing law dispute to be resolved first, before dealing with the jurisdictional objection. Both parties duly put in their submissions. In its award, the tribunal held that Singapore law was the governing law. In reaching this decision, the tribunal:
- reasoned that the parties had agreed to arbitrate in Singapore because it was a neutral venue (the Neutral Venue Determination); and
- applied the principle that the arbitration agreement was separate from the underlying concession contracts (the Severability Determination).
The GOP took issue with both of the above determinations and applied to set aside the award for, inter alia, breach of natural justice.
On the Severability Determination, the GOP argued that its submissions to the tribunal did not address this issue, because it believed that it would only be dealt with at the jurisdictional stage. The court rejected this argument and held that the Severability Determination was a necessary prerequisite for determination, before the tribunal could deal with the governing law issue. The court also accepted that in the GOP's submissions to the tribunal, the GOP had implicitly dealt with the severability issue.
On the Neutral Venue Determination, the GOP argued that the tribunal had no authority to rule on this issue as neither party had made any submission on it, and it amounted to a pre-determination of an issue which should only have been dealt with at the jurisdictional stage. The court disagreed, and found that the GOP's complaint was actually an appeal on the merits (which is outside the scope of an application to set aside an award). In any case, the tribunal's determination was not tantamount to a prejudgment of the jurisdictional objection, and the tribunal had not fettered its ability to freely decide the jurisdictional arguments on the basis of evidence and submissions put forward by the parties.
This case serves as a salutary reminder to parties to be clear on the issues that are open for determination before the tribunal, to take into account all ancillary points that a tribunal might consider, and to immediately raise concerns if they consider the issues at hand to be outside the scope of reference. The case also reaffirms the trend in mature arbitral jurisdictions such as Singapore and Hong Kong that the courts are reluctant to set aside an arbitral award unless an obvious and prejudicial procedural defect is shown.