Case Summaries

Astro Nusantara International BV & Others v PT Ayunda Prima Mitra & Others

SUPREME COURT SINGAPORE

22 October 2012

Media Summary

Astro Nusantara International BV & Others v PT Ayunda Prima Mitra & Others [2012] SGHC 212
Originating Summons No 807 of 2010/F
(Registrar’s Appeal No 278 of 2011/T and Summons No 4065 of 2011/E)
and
Originating Summons No 913 or 2010/A
(Registrar’s Appeal No 279 of 2011/Y and Summons No 4064 of 2011/A)

Decision of the High Court (delivered by Justice Belinda Ang)

     This dispute arose out of a failed joint venture attempt between the Astro group (“Astro”) and the Lippo group (“Lippo”) to provide Pay TV services in Indonesia. While waiting for the deal to close, three companies from Astro (“P6 to P8”) provided interim pay TV services (“the Services”) to Lippo. US$250 million and 1 year later, both sides realised that the deal was not going to close. At arbitration, Astro claimed for the services provided by P6 to P8 which had not been paid for. Lippo claimed that the Services came free as part of an oral joint venture agreement. As P6 to P8 were not part of the Subscription and Shareholders Agreement (“the SSA”) signed between Astro and Lippo, an issue arose as to whether the arbitration clause in the SSA included P6 to P8 and the Services they provided.

2     In a preliminary award dated 7 May 2009 (“the 7 May 2009 award”), the arbitral tribunal (“the Tribunal”) found that it had jurisdiction over the issue of payment for the services, and exercised its power to join P6 to P8 to the arbitration. Lippo (and the second Defendant, PT First Media TBK (“FM”)) did not appeal the 7 May 2009 award and participated in the arbitration under protest. The arbitration was resolved in Astro’s favour. Astro then moved to enforce the awards in Singapore. Enforcement Orders (“the Orders”) were given, but FM claims that they never took service of the Orders.

3     This judgment deals with two issues:

  1. Whether the Orders which were obtained by Astro to enforce 5 arbitral awards (“the Awards”) worth US$250 million in Singapore were properly served on FM; and
  2. Whether FM could resist enforcement of the Awards on the ground that the Tribunal did not have jurisdiction to join P6 to P8, who were not part of the SSA containing the arbitration clause, to the arbitration.

4     On the first issue, the High Court held that leaving copies of the Orders at the registered address of FM was service in accordance with Indonesian law ([53]). However, the High Court found that the service was invalid as the process server took away unopened the sealed envelope addressed to FM containing the Orders, and there is no evidence that any of FM’s employees opened the envelope ([55] & [60]). The High Court concluded that FM did not have notice of Orders and of its right to apply to the Singapore court to set aside the Orders ([58]). As there was effectively no service of the Orders, the High Court found that the irregularities in the service could not be cured under the Rules of Court ([63]).

5     On the second issue, the High Court observed that as the Awards were made in Singapore, a party must challenge the recognition of the Awards and not simply their enforcement ([71]). An arbitral award is enforced in Singapore immediately (and only) after it is recognised as a final and binding Singapore judgment ([77]). An award is “final and binding” (see s 19B(1) of the International Arbitration Act (“the IAA”)) if it has not been set aside (annulled) under the grounds prescribed in Article 34 of the UNCITRAL Model Law on International Commercial Arbitration (“the Model Law”) and s 24 of the IAA ([79] & [93]). The High Court observed that FM had to take a positive step to challenge the Awards, which it did not do when it chose to wait until Astro sought to enforce the Awards ([88]).

6     The High Court found that FM could not revive the grounds under article 34 of the Model Law as the time limit had expired ([73] & [78]). The grounds under s 24 of the IAA (breach of natural justice and inarbitrability) also did not apply to a jurisdictional challenge. The High Court noted that the grounds under article 36 were inapplicable as article 36 was not part of the IAA because of Singapore’s pro-arbitration stance ([88] & [113]).

7    In the High Court’s view, FM should have acted within the 30 days prescribed by article 16(3) of the Model Law to appeal the 7 May 2009 Award. Since FM chose not to do so despite knowing of the final and binding nature of the 7 May 2009 Award, it could not revive the point on jurisdiction ([151], [156] & [162]). The only exception was where there was a breach of natural justice, which is already a ground of setting aside under s 24 of the IAA ([157]). The High Court observed that both the Model Law and the IAA would not permit envisage multiple court proceedings controlling one and the same arbitral decision on jurisdiction both at the setting aside and enforcement stages ([82] & [162]).

8    For the above reasons, the High Court dismissed the applications filed by FM (on behalf of Lippo) and found that Astro was entitled to move forward with the enforcement of the Awards in Singapore.

This summary is provided to assist in the understanding of the Court’s judgment. It is not intended to be a substitute for the reasons of the Court.

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