Agreeing to be bound by ICC Rules excludes right to appeal under domestic law, Singapore court rules

In what Justice Woo said was the first ruling (11-page / 83KB PDF) by the Singapore High Court to decide the point, the court held that a provision waiving the parties' right to "any form of recourse" included such appeals under Singapore's own Arbitration Act (AA).

The parties were already in agreement that they could exclude the right to such appeals under the AA by adopting rules of arbitration, Justice Woo said. He added that nothing in the AA prevented parties from excluding the jurisdiction of the Singapore courts from their arbitration agreements if they chose to.

"It was quite clear ... that the purpose of [the provision in the ICC Rules 1998] was to widen the scope of the [rule in its predecessor, which applied to 'appeals' rather than 'recourse']," Justice Woo said. "It was also quite clear that, by adopting the ICC Rules 1998, the parties had agreed to exclude the right of appeal [on a point of law under the AA]."

The AA generally governs arbitrations in Singapore when the parties have not made any arrangements to the contrary. In certain circumstances, parties can appeal to the domestic courts on questions of law arising out of an arbitration award.

The ICC Rules are the most widely-used institutional arbitral rules in the world, especially in relation to international construction and energy disputes. The latest version of the Rules came into force on 1 January 2012 and applies to all arbitrations governed by the ICC that began on or after that date, unless the parties have agreed that the previous version of the rules will apply.

Awards made under the ICC Rules are "binding" on the parties. The relevant provision states that parties must "carry out any award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made".

The underlying substantive disputes, involving salary payment, contractual breach and misrepresentation issues, arose out of a joint venture agreement between Daimler South East Asia and Front Row Investment signed in 2005. It was common ground that the previous version of the ICC Rules, published in 1998, applied to the disputes; what was disputed was whether parties had also agreed to exclude the right to appeals under the AA.

International arbitration practitioner Kelvin Teo, a partner in Pinsent Mason's joint law venture partner Pinsent Masons MPillay said that the relevant provision was "almost word for word" the same as in the 2012 version.

"In other words, when parties agree to use the ICC Rules 2012 in an arbitration clause, they exclude any right of appeal on a point of law under the AA," Teo said. "This is despite there appearing to be some ambiguity in what the word 'recourse' means in the relevant provision of the ICC Rules 2012."