Singapore

In summary

This chapter summarises the key developments in the Singapore international arbitration scene between the period of March 2019 and February 2020.

Discussion points

• Highlights from the Singapore International Arbitration Centre’s Annual Report 2019.
• Legislative developments concerning international arbitration in Singapore.
• Significant judgments handed down by the Singapore courts in relation to international arbitration.

Referenced in this article

• Singapore International Arbitration Centre.
• International Arbitration Act (Cap 143A, 2002 Rev Ed).
• UNCITRAL Model Law on International Commercial Arbitration.
• ST Group Co., Ltd. & 2 Ors v Sanum Investments Limited [2020] 1 SLR 1.
• BXS v BXT [2019] 4 SLR 390.
• BWF v BWG [2019] SGHC 81.
• BNA v BNB and another [2019] SGCA 84.
• China Machine New Energy Corporation v Jaguar Energy Guatemala LLC and another [2020] SGCA 12.
• Rex International Holding Ltd and another v Gulf Hibiscus Ltd [2019] 2 SLR 682.
• Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd [2019] 2 SLR 131.

2019 was a record year for international arbitration in Singapore.

New case filings at the Singapore International Arbitration Centre (SIAC) hit a new high of 479, with 87 per cent of those case filings (416 cases) being international in nature.

The SIAC’s 479 new cases came from parties in 59 jurisdictions (2018: 402 new cases from 65 jurisdictions). Out of those new cases, 454 (95 per cent) were administered by the SIAC (2018: 375 (93 per cent)), with the remaining 25 cases (5 per cent) being ad hoc appointments. This is the third consecutive year in which the SIAC’s caseload exceeded 400.

In addition, the SIAC’s total sum in dispute for new case filings rose by 14.6 per cent to US$8.09 billion (2018: US$7.06 billion).

Public consultation by the Ministry of Law on proposed amendments to the International Arbitration Act

In June 2019, the Ministry of Law initiated a public consultation to seek comments on various proposed amendments to the International Arbitration Act (Cap 143A, 2002 Rev Ed) (IAA).

The proposed amendments are intended to enhance Singapore’s international arbitration regime to provide parties more options to tailor an international arbitration agreement to suit their specific purposes, and include the following:

• introducing a default mode of appointing arbitrators in multi-party situations;
• allowing parties, by agreement, to request the arbitral tribunal to decide on jurisdiction at the preliminary award stage;
• providing arbitral tribunals and the Singapore High Court with powers to support enforcement of obligations of confidentiality in arbitration; and
• allowing parties to appeal to the Singapore High Court on questions of law arising out of an arbitral award where parties have opted in to such a mechanism.

The Ministry of Law has also sought feedback on whether two other proposals ought to be considered and adopted, that is, whether:

• parties should have the option to agree to waive or limit the annulment grounds stipulated in the UNCITRAL Model Law on International Commercial Arbitration (the Model Law) and the IAA; and
• to empower the court to make an order providing for costs of the arbitration following a successful application to set aside an award, whether wholly or in part.

The public consultation exercise concluded on 21 August 2019, and the Ministry of Law’s response to the feedback obtained is pending.

IAA amended to clarify arbitrability of intellectual property disputes in Singapore

Amendments to the IAA to clarify and confirm that intellectual property disputes in Singapore are arbitrable in Singapore came into effect on 21 November 2019.

The amended IAA also clarifies, among other things, that an arbitral award has effect only on the parties to the arbitration (in personam) and not against the whole world (in rem). Significantly, a third-party licensee or third-party holder of a security interest in respect of the intellectual property rights which are the subject of the arbitration (or any person claiming through or under such a person) would not be considered a party to the arbitration. Such persons would therefore not be entitled to rely on the arbitral award.

Memoranda of understanding between the SIAC and other institutions

The SIAC entered into several memoranda of understanding with other arbitral institutions to promote international arbitration as the preferred method of dispute resolution for resolving international disputes. Under these memoranda of understanding the SIAC will work with the other institutions to jointly promote international arbitration by, inter alia, co-organising conferences, seminars, workshops and training programmes, providing recommendations of arbitrators to each other, and conducting training programmes for each other’s staff:

• on 24 May 2019, with the Shanghai International Arbitration Centre (SHIAC);
• on 4 June 2019, with the Japan Association of Arbitrators (JAA) and the Japan International Dispute Resolution Center (JIDRC); and
• on 15 October 2019, with the Beijing Arbitration Commission/Beijing International Arbitration Center (BAC/BIAC).

The SIAC also entered into several memoranda of understanding with a number of institutions of higher learning: on 1 August 2019, 17 September 2019, 6 January 2020 and 17 January 2020, with the University of Malaya Faculty of Law (UM), the East China University of Political Science and Law (ECUPL), the Keio University Law School (KEIO Law) and the Chulalongkorn University Faculty of Law (Chula Law) respectively.

Under the memoranda of understanding, the SIAC will work together with those universities to place their law students in internships at the SIAC. In addition, the SIAC will collaborate with those universities to incorporate a module on ‘SIAC and Institutional Arbitration’ into their respective law programmes. Upon request by the SIAC or the UM, the ECUPL, KEIO Law or Chula Law, the parties will also conduct joint training programmes, seminars, workshops or other events in Malaysia, China, Japan or Thailand to promote the development and practice of international arbitration.

Case law

We summarise below some of the significant judgments released since our last report (from March 2019 to February 2020):

• In ST Group Co., Ltd. & 2 Ors v Sanum Investments Limited [2020] 1 SLR 1, the Court of Appeal declined to give leave to enforce an award made in an arbitration that was wrongly seated.
• In BXS v BXT [2019] 4 SLR 390, the Singapore International Commercial Court (SICC) held that the court does not have the power to extend the time limited under article 34(3) of the Model Law for applying to set aside an award.
• In BWF v BWG [2019] SGHC 81, the High Court held that the existence of a bona fide prima facie dispute was sufficient for the court to grant an injunction restraining winding up proceedings.
• In BNA v BNB and another [2019] SGCA 84, the Court of Appeal held that the phrase ‘arbitration in Shanghai’ was a reference to Shanghai, PRC, as the seat of the arbitration. This finding was reached even though the arbitration agreement was arguably invalid under PRC law.
• In China Machine New Energy Corporation v Jaguar Energy Guatemala LLC and another [2020] SGCA 12, the Court of Appeal clarified that a party’s right under article 18 of the Model Law to a ‘full opportunity’ of presenting its case is not unlimited, and set out the approach to be taken in determining whether this right has been breached.
• In Rex International Holding Ltd and another v Gulf Hibiscus Ltd [2019] 2 SLR 682, the Court of Appeal provided guidance on when a case management stay in favour of arbitration should be granted.
• In Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd [2019] 2 SLR 131 the Court of Appeal confirmed that a respondent to arbitration proceedings was entitled to decline to participate in arbitral proceedings that it considered to have been brought without jurisdiction, without losing its right to challenge the tribunal’s jurisdiction in setting aside proceedings before the supervisory court.

Award ensuing from wrongly seated arbitration not recognised and enforced

In ST Group Co., Ltd. & 2 Ors v Sanum Investments Limited [2020] 1 SLR 1, the Court of Appeal dealt with, inter alia, whether an award made in an arbitration that was wrongly seated may be enforced in Singapore.

The parties entered into a number of agreements relating to their business venture in Laos, two of which contained differing dispute resolution clauses. When a dispute arose, the claimant took various steps, including commencing arbitration proceedings in the SIAC. The respondent objected to the SIAC arbitration. The SIAC noted the objections, but determined that a valid arbitration agreement under the SIAC Rules existed, and proceeded to appoint a three-member tribunal, on the basis of the dispute resolution clause in one of the agreements entered into between the parties. The Tribunal subsequently determined that the seat of the Arbitration was Singapore, and issued an award in favour of the claimant. Shortly after the award was issued, the claimant sought and obtained leave to enforce the award in Singapore.

The Court of Appeal found in favour of the respondents, and declined to allow enforcement of the award in Singapore. It reasoned as follows:

• The dispute between the parties arose out of a different agreement between the parties, which provided for a sole arbitrator. On a proper reading, the applicable dispute resolution clause provided for Macau to be the seat of the arbitration.
• If an arbitration is wrongly seated, then absent any waiver of the wrong seat, any award that is made in that arbitration should not be recognised or enforced because the award has not been obtained in accordance with the parties’ arbitration agreement.
• The choice of seat is one of the most important matters for parties to consider in an arbitration agreement because it determines a number of important matters, including the supervisory court.
• It was not necessary for the party resisting enforcement of an award arising out of a wrongly seated arbitration to demonstrate actual prejudice arising from the wrong seat. It was sufficient that had the arbitration been correctly seated, the parties would have had recourse to a different supervisory court.

The Court of Appeal therefore set aside the order granting leave to enforce the award in Singapore.

Court does not have the power to extend the time limit for applying to set aside an award

In BXS v BXT [2019] SGHC(I) 10, the SICC held that the court does not have the power to extend the time limit under article 34(3) of the Model Law for applying to set aside an award.

Article 34(3) of the Model Law provides, among other things, that an application for setting aside ‘may not be made after three months have elapsed from the date on which the party making that application had received the award’.

The plaintiff applied to have the final award set aside almost five months after the final award was issued. The defendant then applied to strike out the plaintiff’s application on the grounds that it had been filed out of time.

The SICC held that the three-month time limit could not be extended under Singapore law. It took the view, among other things, that:

• the natural and ordinary meaning of article 34(3) of the Model Law indicated an absolute prohibition, with the result that a mandatory time limit was imposed. This was the position, notwithstanding the court’s general power to extend time under the Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed); and
• as the plaintiff had brought its application out of time, its setting aside application should be struck out, regardless of its merits.

The SICC also found that the SIAC’s appointment of a sole arbitrator under the expedited procedure was not contrary to the arbitration agreement, as the parties did not manifest a clear intention for the stipulation for three arbitrators in the arbitration clause to exclude the application of the expedited procedure.

The SICC therefore dismissed the plaintiff’s setting aside application and allowed the defendant’s striking out application.

Injunction granted to restrain winding-up proceedings where there existed a bona fide prima facie dispute over debt subject to an arbitration agreement

In BWF v BWG [2019] SGHC 81, the High Court held that the existence of a bona fide prima facie dispute was sufficient for the court to grant an injunction restraining winding up proceedings.

The defendant served on the plaintiff a statutory demand under section 254 of the Singapore Companies Act (Cap 50, 2006 Rev Ed), claiming for allegedly unpaid invoices under an agreement for the sale and purchase of crude oil that both parties had entered into. The agreement contained an arbitration agreement that provided for disputes to be referred to arbitration in London.

The plaintiff disputed the alleged debt claim and sought an injunction from the High Court to restrain the commencement of winding-up proceedings on the basis that the dispute should be referred to arbitration.

Finding in favour of the plaintiff, the High Court held that an injunction would be granted to restrain winding-up proceedings as long as there was a prima facie dispute that was subject to an arbitration agreement, and there were no indications that the issues were not raised bona fide; only where there has been a clear admission on liability and quantum or other abuse of court process would the court decline to grant the order.

In this case, the High Court found that the plaintiff had raised a bona fide prima facie dispute over the claimed debt and that the defendant had failed to show any abuse of process on the plaintiff’s part. It accordingly granted the injunction to restrain the defendant from commencing winding up proceedings.

The phrase ‘arbitration in Shanghai’ held to mean that Shanghai is the seat of the arbitration

In BNA v BNB and another [2019] SGCA 84, the Court of Appeal held that the phrase ‘arbitration in Shanghai’ was a reference to Shanghai, PRC as the seat of the arbitration. This finding was reached even though arbitration agreement was arguably invalid under PRC law.

The arbitration agreement between the appellants and the respondents read as follows:

14.1 This Agreement shall be governed by the laws of the People’s Republic of China.

14.2 With respect to any and all disputes arising out of or relating to this Agreement, the parties shall initially resolve all disputes amicably between themselves. If such negotiations fail, it is agreed by both parties that such disputes shall be finally submitted to the Singapore International Arbitration Centre (SIAC) for arbitration in Shanghai, which will be conducted in accordance with its Arbitration Rules. The arbitration award shall be final and binding on both parties.

When a dispute arose, the respondents initiated SIAC arbitration in Singapore. The appellants challenged the jurisdiction of the arbitral tribunal on the grounds that the proper law of the arbitration agreement was PRC law, which rendered the arbitration agreement invalid and entailed that the dispute had to be litigated in the PRC courts.

The majority of the arbitral tribunal held that it had jurisdiction. It took the view that Shanghai was not the seat, but merely the venue of the arbitration, as it would not have made commercial or logical sense for the parties to have intentionally selected a law that would invalidate the arbitration agreement.

The appellant challenged the arbitral tribunal’s decision on its jurisdiction before the Singapore courts.

The Court of Appeal applied the three-stage framework for determining the proper law of an arbitration agreement set out in BCY v BCZ [2017] 3 SLR 347 and held, among other things, that:

• An express choice of the proper law of the main contract does not, in and of itself, also constitute the proper law of the arbitration agreement, although it is a strong indicator of the governing law of the arbitration agreement.
• The phrase ‘arbitration in Shanghai’ was most naturally read as a reference to the seat of the arbitration.
• While the natural reading can be displaced by contrary indicia, the Court of Appeal found that there were no such indicia in this case. In that regard, the Court of Appeal rejected the respondents’ submission that the background contextual material of the parties’ pre-contractual negotiations showed that the intention was for the arbitration to be seated in a neutral forum (ie, Singapore). While Singapore law does not mandate a blanket prohibition against the admissibility of pre-contractual negotiations, that does not mean that such evidence is freely admitted. Extrinsic evidence will only be admitted if it is ‘relevant, reasonably available to all the contracting parties, and relates to a clear or obvious context’. The evidence sought to be relied on by the respondents did not satisfy these requirements.
• The Court of Appeal also disagreed with the respondents’ contention that the parties could not have chosen Shanghai as the law of the seat, given the potentially invalidating effect PRC law would have had on the arbitration agreement. For the respondents to advance this argument, they would have to proffer at least some evidence to show that the parties were aware that the choice of proper law of the arbitration agreement could have an impact upon the validity of the arbitration agreement. However, the evidence before the Court suggested the opposite, in that this consideration did not appear to operate in the minds of the parties.

As a result, the Court of Appeal held that Shanghai (and not Singapore) was the seat of the arbitration.

The Court emphasised that the parties’ manifest intention to arbitrate was not to be given effect at all costs. The parties’ particular choice to arbitrate – in a certain manner, in a certain place, under the administration of a certain arbitral institution – had to be given effect to by a process of construction that critically gave the words of the arbitration agreement their natural meaning, unless there were sufficient contrary indicia to displace that reading. If the result of this process of construction was that the arbitration agreement is unworkable, then the parties would have to live with the consequences of their decision.

Approach to determining whether a party has been given the ‘full opportunity’ of presenting its case clarified

In China Machine New Energy Corporation v Jaguar Energy Guatemala LLC and another [2020] SGCA 12, the Court of Appeal clarified that a party’s right under article 18 of the Model Law to a ‘full opportunity’ of presenting its case is not unlimited, and set out the approach to be taken in determining whether this right has been breached.

The parties’ underlying dispute centred on an engineering, procurement and construction contract (the EPC contract) under which the appellant contractor was to construct a power generation plant (the plant) for the respondent owners. When the works were delayed, the respondents exercised their rights to terminate the EPC contract, and engaged other contractors to complete the works.

The respondents then initiated arbitration against the appellant in accordance with the arbitration agreement contained in the EPC contract, claiming, among other reliefs, the cost of completing the plant (the ETC claim).

The arbitral tribunal found in favour of the respondents and allowed the ETC claim almost in its entirety.

The appellant then applied to have the award set aside under, among other things, article 34(2)(a)(ii) of the Model Law and section 24(b) of the IAA.

According to the appellant, the arbitral tribunal mismanaged the arbitration in three areas relating to document production:

• First, the arbitral tribunal had from time to time placed restrictions on the disclosure of certain sensitive documents that the appellant alleged greatly impaired its ability to assess and address the quantum of the respondents’ ETC claim. These restrictions included the production of certain documents on an ‘attorneys’ eyes only’ basis or with information identifying the respondents’ post-termination contractors redacted, in order to address the respondents’ concerns that the appellant might misuse the information in those documents to interfere with ongoing work to complete construction of the plant.
• Secondly, the appellant said that it did not have access to the project documents documenting the work it had completed before the respondents terminated the EPC contract (the construction documents), which it said was necessary to enable it to value its completed work, and assess and challenge certain aspects of the ETC claim. According to the appellant, it ceased to have access to the construction documents after it was compelled by the respondents to vacate the work site following the termination of the EPC contract.
• Thirdly, the appellant was dissatisfied with the respondents’ rolling production of documents to evidence the quantum of its ETC claim (the costs documents). The additional costs documents were produced in four tranches over a period of four to five months. The appellant contended that the arbitral tribunal’s failure to put an earlier stop to the continual updates to the quantum of the respondents’ ETC claim resulted in the appellant having inadequate time to prepare its response, and that its difficulties were exacerbated by the disorganised and haphazard manner in which the documents were produced.

The appellant also argued that the mismanagement of the arbitration prevented it from promptly preparing and filing critical lay and expert evidence addressing the quantum of the ETC claim. According to the appellant, this meant, for example, that a key responsive expert report prepared by its quantum expert (the Gurnham Responsive Report) was filed out of time and therefore not properly considered by the arbitral tribunal, in breach of the appellant’s right to be heard under article 18 of the Model Law.

The High Court judge dismissed the appellant’s application to have the award set aside. The appellant appealed to the Court of Appeal.

Dismissing the appeal, the Court of Appeal noted that a party’s right under article 18 of the Model Law to a ‘full opportunity’ of presenting its case is not unlimited, but is impliedly limited by considerations of reasonableness and fairness.

Setting out the approach that the court should take, the Court of Appeal highlighted that:

• What constitutes a ‘full opportunity’ is a contextual inquiry to be undertaken within the specific context of the particular facts and circumstances of each case.
• The proper approach for the court to take is to ask itself if what the tribunal did (or decided not to do) falls within the range of what a reasonable and fair-minded tribunal in those circumstances might have done.
• In undertaking this exercise, the court must put itself in the shoes of the tribunal. This means that: (i) the arbitral tribunal’s decisions can only be assessed by reference to what was known to and brought to its attention at the material time; and (ii) the court would accord a margin of deference to the tribunal in matters of procedure and would not intervene simply because it might have done things differently.

On that approach, the Court of Appeal found, among other things, that:

• The arbitral tribunal’s management of the disclosure of sensitive documents was not so unfair as to constitute a breach of natural justice. The orders made were not without basis and the fact that ‘attorney’s eyes only’ order adversely affected the appellant’s ability to prepare its case was not fatal to its legality, given that the tribunal had to strike a balance between both sides’ competing interests. The balance struck by the tribunal was not one which was so unfair or unreasonable as to fall outside the range of what a reasonable and fair-minded tribunal might have done in the circumstances.
• The appellant had not been prejudiced by the arbitral tribunal’s failure to order the respondents to disclose the construction documents. The evidence showed that the appellant had never requested the production of the construction documents for the purpose of preparing its case and the appellant’s own filings indicated that it was fully capable of assessing the value of its pre-termination work with reasonable accuracy.
• The appellant’s complaint that the arbitral tribunal had failed to consider the allegedly disorganised and haphazard production of the costs documents in its management of the arbitration was baseless. The appellant did not at any juncture highlight the respondents’ allegedly disorganised and haphazard production of documents in its requests to the arbitral tribunal for extensions of time for the filing of the Gurnham Responsive Report. It was not until after the extended deadlines had lapsed that the appellant did so, in its bid to belatedly have the Gurnham Responsive Report admitted.

The Court of Appeal further noted that the appellant had, by its continued engagement as a party in the arbitration, consistently expressed its intention to forge ahead with the main evidentiary hearing. If the appellant had believed that proceeding with the main evidentiary hearing was impossible, it should have brought home its concern to the arbitral tribunal. However, the appellant persisted in maintaining that it wished to press on with the hearing, which put the lie to its contention that the arbitral tribunal had conducted the arbitration in breach of its due process rights.

The Court of Appeal therefore declined to set aside the award on grounds of breach of natural justice.

Case management stay in favour of arbitration lifted; guidance given on when case management stays should be granted

In Rex International Holding Ltd and another v Gulf Hibiscus Ltd [2019] 2 SLR 682, the Court of Appeal clarified when a case management stay in favour of arbitration should be granted.

In 2016, the respondent initiated court proceedings against the appellants. The appellants sought a stay of proceedings on the basis of an arbitration agreement contained in a shareholders’ agreement between the respondent and the appellant’s subsidiary. The appellants were not parties to the shareholders’ agreement and the respondent’s claims against the appellants were, therefore, not subject to arbitration.

At first instance, a case management stay of proceedings was granted by the Assistant Registrar. On appeal to the High Court, the High Court judge upheld the Assistant Registrar’s decision, but made the stay subject, among other things, to the condition that the parties be at liberty to apply to the court to lift the stay if the dispute resolution mechanism in the shareholders’ agreement (which included the arbitration agreement) was not triggered by any party to the shareholders’ agreement, and an arbitration was not commenced, within three and five months the date of judgment respectively.

In April 2018, the respondent applied to lift the stay on the grounds. The High Court judge ordered that the stay be lifted on 31 May 2018 unless arbitration was commenced or another order of court was granted before that date.

The appellants appealed against the High Court judge’s decision to the Court of Appeal.

Dismissing the appeal, the Court of Appeal held that it was ill-conceived to stay the respondent’s claim against the appellants (which was not subject to any arbitration agreement) by reason of an arbitration agreement between the respondent and a non-party to the original dispute.

Elaborating on the circumstances under which a stay of proceedings on the basis of case management would arise, and when such a stay would be granted, the Court of Appeal highlighted that:

• The question of a case management would arise where there were overlapping issues that would have to be aired before different fora among different parties, some of whom were bound by an arbitration agreement while others were not. For example, where there was some overlap in respect of: (i) the parties to the putative arbitration and the parties to the suit; and (ii) the issues that would be aired in the putative arbitration and the issues in the suit.
• Unless there was the existence or at least the imminence of separate legal proceedings giving rise to a real risk of overlapping issues, it would be premature to consider, let alone grant, a case management stay.
• A case management stay should not be ordered merely because there might be a potential or theoretical overlapping of issues, parties or proceedings.
• The type of overlap that would attract a case management stay is one where the proper airing of the issues in the court proceedings depended on the resolution of the related putative arbitration. It is only in such circumstances that a case management stay would be required to secure the efficient and fair resolution of the dispute as a whole.
• The court must therefore consider precisely: (i) the potential fora for the resolution of the dispute; (ii) the different parties before each forum; and (iii) the issues to be determined before each forum.

The Court of Appeal took the view that in this case, the case management stay should not have been granted as the issues raised in the court proceedings did not depend on the resolution of issues that might arise in the putative arbitration. The respondent was at liberty to pursue its claims as it saw fit, and had chosen not to take action against the appellant’s subsidiary, which was party to the shareholders’ agreement. It had chosen to sue the appellants, who were not party to the shareholders’ agreement. Nor did the appellant’s subsidiary have any claims to bring against the respondent; there were no relevant disputes under the shareholders’ agreement.

The Court of Appeal therefore upheld the decision of the High Court to lift the case management stay.

Respondent entitled to decline to participate in arbitral proceedings without losing its right to subsequently challenge the tribunal’s jurisdiction in setting aside proceedings

In Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services (Pte) Ltd [2019] 2 SLR 131 the Court of Appeal confirmed that a respondent to arbitration proceedings was entitled to decline to participate in arbitral proceedings that it considered to have been brought without jurisdiction, without losing its right to challenge the tribunal’s jurisdiction in setting aside proceedings before the supervisory court.

In April 2015, the claimant commenced arbitral proceedings against the respondent. The respondent did not respond to the notice of arbitration and did not participate in the arbitration despite being given notice at various stages and having had ample opportunity to do so. The respondent did, however, record its objection to the tribunal’s jurisdiction.

The tribunal subsequently issued an award in favour of the claimant. The respondent applied to have the award set aside.

The Court of Appeal determined that the tribunal had no jurisdiction and set aside the award. In doing so, the Court found, among other things, that as the tribunal ruled on the issue of jurisdiction as a preliminary question, article 16(3) of the Model Law was engaged. However, article 16(3) of the Model should not be construed so as to compel a respondent to take part in arbitral proceedings that it considered to have been commenced without jurisdiction, and to let the opportunity to challenge the tribunal’s jurisdiction under article 16(3) of the Model Law go unutilised. The respondent was entitled to sit by and do nothing, without losing its right to challenge the jurisdiction of the tribunal in setting aside proceedings before the supervisory court. The Court considered that a respondent who chose not to participate was not contributing to any wastage of costs; the claimant who insisted on proceeding in such circumstances must take the risk of wasted costs.