CAN YOU SET ASIDE AN ARBITRAL AWARD WHERE YOU SIT OUT AN ARBITRATION?
Practice Areas
Lawyers
In DWJ v DWK [2026] SGHC(I) 18 (“DWJ”), the Singapore International Commercial Court dismissed an application to set aside an arbitral award brought by a party which had chosen not to participate in the arbitration.
The decision is a useful reminder that discussions about suspending or withdrawing an arbitration do not, without more, justify ignoring it, particularly where the tribunal continues to issue directions requiring participation (DWJ at [48]–[54]).
It also indicates that an arbitration in which a party chooses not to attend is not an ex parte or without notice proceeding attracting the same duty of full and frank disclosure (DWJ at [73]), and that, absent deceit, a participating party is not obliged to present arguments on behalf of an absent party (DWJ at [74]).
Background
DWJ, the Claimant in the setting-aside proceedings, provided financial advisory services under an agreement initially entered into with Defendant’s parent company and subsequently novated to the Defendant (DWJ at [3]–[6]).
An amendment to the novated agreement provided for refundable monthly payments, which would be refunded to the Defendant if the underlying transaction was not successful. (DWJ at [7]–[8]).
The agreement was terminated on 30 April 2024 without a successful transaction (DWJ at [9]-[11]). By that time, the Defendant had paid about S$2.7 million in refundable payments (DWJ at [9]–[11]).
The Defendant commenced arbitration, but the Claimant neither filed a defence nor attended the hearing, despite receiving procedural directions and an express reminder from the tribunal that the arbitration could proceed without its participation as per the SIAC Rules (DWJ at [14]–[20]).
The tribunal awarded the Defendant approximately S$2.7 million in damages (DWJ at [21]).
The Claimant sought to set aside the award on grounds that, amongst others, it was unable to present its case, that the award was induced by fraud, and that there had been a breach of natural justice (DWJ at [26]).
Unable to participate or choosing not to participate?
The Claimant relied on several grounds to make good the position that it was unable to present its case. Chief among them was that the Claimant “did not have the benefit of legal advice and did not know the consequences of non-participation in the arbitration” and that certain communications between the parties (i.e., messages sent by the Defendant’s CEO in October 2024, January 2025 and March 2025 concerning a possible suspension or withdrawal of the arbitration) led the Claimant to believe that participation in the arbitration was unnecessary (DWJ at [38]).
The Court noted that the Claimant was in the business of providing financial advisory services. Against that backdrop, there was no suggestion that the Claimant could not obtain legal advice. Further, the Claimant did not explain why legal advice was not sought, and as the Claimant did not do so after being reminded that the arbitration could proceed nonetheless, the facts pointed to that the Claimant “must have decided to ignore the arbitration and not to seek legal advice” (DWJ at [56]).
As to whether certain communications led the Claimant to believe that participation was unnecessary, the Court found that those communications were subject to qualifications, which were not fulfilled (DWJ at [44]–[51]).
Importantly, the Court also found that such communications were not unequivocal representations, and that the Claimant had not acted in reliance on them since it never fulfilled the conditions attached to them. This undermined the Claimant’s position that the Defendant was estopped from relying on Claimant’s non-participation in defence of the setting aside proceedings, for which estoppel requires clear and unequivocal representation (DWJ at [55]).
Accordingly, the Court found that such communications did not prevent the Claimant from presenting its case, but that it chose not to do so (DWJ at [48] and [54]).
Must a party present its absent opponent’s defence?
The Claimant also argued that the award was induced by fraud because the Defendant failed to disclose to the tribunal certain verbal assurances allegedly given in January and February 2023 by the then-CEO of the Defendant’s parent company, to the effect that the refundable payment provisions would not be enforced against the Claimant (DWJ at [31] and [62]).
The Court clarified that where non-disclosure or suppression of evidence is relied upon as fraud for setting aside purposes, “it is necessary to show deliberate (as opposed to innocent or negligent) concealment aimed at deceiving the arbitral tribunal” and that a “convincing case must be shown””, citing BVU v BVX [2019] SGHC 69 (DWJ at [64]).
This requirement was not satisfied. The Court accepted that the Defendant did not know of the alleged assurances until the setting-aside proceedings, and there was no evidence of deliberate concealment aimed at deceiving the tribunal (DWJ at [65]–[67]).
The Court further considered this issue from a natural justice point of view. The Court observed that the Claimant had not explained “why it is a rule of natural justice that the Defendant was obliged to make known material facts relating to the Claimant’s defence to the Tribunal”, nor pointed to any precedent supporting such a rule (DWJ at [71]).
Assuming that such a rule exists, the Court held that such an obligation does not attract to arbitration where “one party chooses not to attend the hearing” as it is “not ex parte or without notice” (DWJ at [73]).
Key takeaways
First, a party given the opportunity to present its case cannot turn its own decision not to participate into a complaint that it was unable to be heard, and an unexplained failure to obtain available legal advice does not cure that difficulty.
Tied to this is that a party that sits out an arbitration cannot ordinarily expect its opponent to present its defence, but such absence does not give the participating party a license deliberately to conceal material facts with a view to deceiving the tribunal.
Lastly, commercial discussions about suspending or withdrawing an arbitration should not be treated as permission to disregard procedural directions, particularly where those discussions are conditional and the tribunal makes clear that the proceedings are continuing.
This publication is not intended to be, nor should it be taken as, legal advice; it is not a substitute for specific legal advice for specific circumstances. You should not take, nor refrain from taking, actions based on this publication. Chancery Law Corporation is not responsible for, and does not accept any responsibility for, any loss or damage that may arise from any reliance based on this publication.