This case concerns a charter hire agreement dated February 15, 2013, between SINTRANS ASIA SERVICES PTE LTD (plaintiff), the disponent owner of the dredger Gibraltar, and INAI KIARA SDN BHD (defendant), the charterer. Under the agreement, the defendant hired the vessel for three months, with an option to extend. The vessel was delivered on February 23, 2013, and redelivered on May 30, 2013, after an eight-day extension.
The defendant failed to pay USD 1,921,424.05, breaching the agreement. Arbitration proceedings were initiated in Singapore as per Clause 22 of the agreement, which specified Singapore law as governing disputes. The tribunal awarded the claimed amount to the plaintiff on March 7, 2014. Despite the award, the defendant did not pay, prompting the plaintiff to seek enforcement through the Malaysian High Court.
The defendant argued that the arbitration clause was no longer applicable due to admiralty proceedings initiated in Malaysia and sought to invalidate the award under the Arbitration Act 2005. However, the Court of Appeal ruled that this clause remained binding, as Singapore was the seat of arbitration and the governing law. The defendant failed to raise objections in Singapore courts, making their arguments untimely.
The court emphasized that Malaysian courts serve as enforcement courts for valid arbitration awards, with supervisory jurisdiction lying in Singapore. It dismissed the defendant’s arguments regarding admiralty proceedings and procedural flaws, affirming the validity of the arbitration clause and award. The appeal was allowed, with costs awarded to the plaintiff.
This case underscores the importance of adhering to the agreed arbitration process and the primacy of the seat of arbitration in resolving disputes.
Click here to download this case study as pdf