RELIANCE INFRASTRUCTURE LIMITED v SHANGHAI ELECTRIC GROUP CO LTD
4 cases cited
(3 SG, 1 foreign)
Catchwords
Practice Areas
Counsel (10)
Drew & Napier LLC Firm Providence Law Asia LLC Firm Aw Wei Jie Daryn Emmanuel Counsel Respondent Cavinder Bull Counsel Respondent Foo Yuet Min Counsel Respondent Lai Weng Han Counsel Respondent Liu Enning Counsel Appellant Tan Pei Han Counsel Respondent Tay Hong Zhi Gerald Counsel Respondent Vergis S Abraham Counsel Appellant
Case Significance
Reliance Infrastructure Ltd v Shanghai Electric Group Co Ltd [2024] SGCA(I) 10 is a decision of the Court of Appeal delivered on 17 December 2024 by Robert French IJ, sitting with Sundaresh Menon CJ and Steven Chong JCA. The appellant, Reliance Infrastructure Limited, had argued in the Singapore International Commercial Court that an arbitral award against it, based on a Letter of Guarantee, should be set aside for want of jurisdiction or on public policy grounds, both arguments depending on a contention that the Guarantee Letter was a forgery. The catchwords cover arbitration topics of separability of the arbitration agreement, recourse against an award by setting aside, and waiver of objections in the conduct of the arbitration.
The judgment records that the appellant had not, in its defence in the arbitration, advanced any objection to the Tribunal's jurisdiction based on an alleged forgery, and in its Opening Submissions had made clear it was not alleging the Guarantee Letter was a forgery, instead relying on fresh evidence only in the SICC. The SICC had found the appellant waived any objection to jurisdiction. Reliance was represented by Providence Law Asia LLC (including Vergis S Abraham and Liu Enning) and Shanghai Electric by Drew & Napier LLC (including Cavinder Bull). The grounds reference the Indian Penal Code and the Penal Code and cite four authorities.
Summary
SUPREME COURT OF SINGAPORE
17 December 2024
Case summary
Reliance Infrastructure Ltd v Shanghai Electric Group Co Ltd
Court of Appeal – Civil Appeal No 1 of 2024 [2024] SGCA(I) 10
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Decision of the Court of Appeal (delivered by International Judge Robert French):
Outcome: The Court of Appeal dismissed the appeal against the decision of the Singapore International Commercial Court (the “SICC”) in Reliance Infrastructure Limited v Shanghai Electric Group Co Ltd [2024] SGHC(1) 3 (the “Judgment”), and affirmed the SICC’s decision not to set aside an arbitral award.
Pertinent and significant points of the judgment
• It is impermissible to stake a certain position before the tribunal, and then completely change course subsequently when the award was not to its liking.
• The public policy exception is not meant to enable an unsuccessful party to an arbitration to completely undermine an award on grounds that it either disavowed before the tribunal, or if it raises the issue, where the tribunal, having considered the matter, rejects the contention.
Background to the appeal and the material facts
1 Reliance Infrastructure Limited (“RINFRA”) is a company incorporated in the Republic of India. Reliance Infra Projects (UK) Limited (“Reliance UK”) is related to the Appellant. The Respondent, Shanghai Electric Group Co Ltd (“SEC”), was incorporated in the People’s Republic of China. The present dispute arises out of a major construction project for an electricity generating power plant in Sasan Village, India, in which both the Appellant and the Respondent were involved.
2 On 26 June 2008, Reliance UK and SEC entered into a contract under which SEC was to supply requisite equipment and services for the Sasan project (the “Supply Contract”). Mr Agrawal, a Vice President of RINFRA, signed the Supply Contract on behalf of Reliance UK. On the same day, a Guarantee Letter was purportedly executed by RINFRA as guarantor of Reliance UK’s obligations to SEC under the Supply Contract.
3 A dispute arose, and SEC initiated arbitration against RINFRA based on the Guarantee Letter. RINFRA contended, in its Statement of Defence in the arbitration, that the Guarantee Letter was invalid. It claimed that it was not aware of its existence and that Mr Agrawal had had no authority to execute it. It did not assert that his signature was a forgery, nor did it plead in its defence that the Tribunal lacked jurisdiction. In its Opening Submissions to the Tribunal on 6 September 2021, RINFRA made clear that it was not alleging that the Guarantee Letter was a forgery. It did not adduce before the Tribunal any witness statements from Mr Agrawal nor any handwriting expert evidence to show that the Letter was a forgery.
4 On the last day of oral closing submissions on 21 January 2022, the Tribunal asked SEC if the RINFRA letterhead was embossed or computer-generated. In an email to the Tribunal dated 30 January 2022, SEC’s counsel clarified that the original Guarantee Letter (inclusive of the letterhead) had been printed in black and white but that Mr Agrawal’s signature, name and title on the last page of the Letter were in blue ink. RINFRA’s legal representative subsequently sent an email to the Tribunal and alleged, amongst others, that the Guarantee Letter was a “false instrument”. The Tribunal inquired by an email dated 16 February 2022 about the “specific findings” that the parties wanted the Tribunal to make in respect of the Guarantee Letter, and the legal representatives of RINFRA stated that the Tribunal should declare that the purported Guarantee Letter was invalid and unenforceable and that it ought to be disregarded in its entirety, but did not object to the jurisdiction of the Tribunal.
5 The Tribunal held that RINFRA had not put in issue whether the Letter was a forgery and must be taken to have conceded that it existed. On the other hand, Mr Agrawal’s authority to sign the letter was put in issue. The Tribunal found that he had apparent authority to sign it on behalf of RINFRA, and awarded damages to SEC.
6 In the SICC, RINFRA sought to set aside the Award, and sought to rely on fresh evidence never put before the Tribunal. The SICC also allowed five witnesses to be cross-examined at a hearing in January 2024.
7 RINFRA contended before the SICC that the Tribunal had lacked jurisdiction as the Arbitration Agreement was invalid and that the Award was affected by SEC’s fraud. Its factual premises were that SEC had forged the Guarantee Letter, and in the alternative, that Mr Agrawal had lacked authority to execute it. RINFRA contended that it had not waived its objections to the Tribunal’s jurisdiction on the grounds being advanced before the SICC, had lacked actual knowledge of the facts required to plead its case for forgery and had only learnt after the Award had been published that Mr Agrawal had never signed the Guarantee Letter. Prior to that time, it had been unable to obtain his cooperation because he was working for a competitor.
8 The SICC found that RINFRA had waived its right to object based on forgery, as it had knowledge of relevant facts during the arbitration but chose not to raise the issue. RINFRA also waived its right to object based on lack of authority, as it failed to challenge the Tribunal's jurisdiction on this ground during the arbitration.
9 Even if RINFRA’s challenges had not been waived, the SICC was not persuaded of the merits. There was objective evidence supporting the existence of the executed Guarantee Letter, including an email from Mr Agrawal to officers of the SEC on 26 August 2008. The SICC also found that Mr Agrawal had the apparent authority to commit RINFRA to agreements to arbitrate with SEC and would have dismissed its jurisdictional objection on that ground even if it had not been waived.
Decision of the court
10 RINFRA was, at the relevant time before the Tribunal, apprised of facts which might have raised a suspicion that the signature on the Guarantee Letter was not genuine — in particular, the alleged absence of any copy of the Letter or record of it having been made on RINFRA’s end. RINFRA did not have to say anything about fraud, or more particularly, to disavow such a contention, in its defence and absent such a disavowal, it might have still been open to it to later allege that the signature was forged if evidence of forgery later emerged. However, in its opening submissions to the Tribunal on 6 September 2021, RINFRA disclaimed reliance on any claim that the signature was forged, and it did not advance any such contention when it updated its Schedule of Issues before the Tribunal on 11 February 2022. While RINFRA had the right to take this definitive position without reserving its position pending further investigation, it cannot now raise this argument after the conclusion of the arbitration and in the face of an adverse award. The Court of Appeal noted that RINFRA could have taken other measures to investigate, even if it could not ascertain Mr Agrawal's position, and that it is precisely when facts are difficult to ascertain that a party typically reserves its position. RINFRA's failure to do so precludes it from raising this argument at this late stage: at [71] to [72].
11 There is nothing contrary to public policy in a party choosing to commit itself to a certain position, when it is not obliged to, and even more so when it evidently thought at the material time that the position was odd. Parties are entitled to choose what issues they will take in an arbitration and if it turns out that it made a wrong tactical or strategic choice, that is entirely of its own making and does not in any way implicate public policy. The public policy exception is not meant to enable an unsuccessful party to an arbitration to completely undermine an award on grounds that it disavowed before the tribunal, or if it raises the issue, where the tribunal, having considered the matter, rejects the contention: at [73] to [74].
12 RINFRA’s position would also amount to the worst kind of hedging, in that it was staking a certain position before the Tribunal, and then completely changing course subsequently when the award was not to its liking. The SICC rightly found that RINFRA was precluded from having the Award set aside on a ground going to jurisdiction which had been waived by its disclaimer before the Tribunal: at [75] to [76].
13 The decision of the SICC that there was not a forgery was soundly based on the evidence before it and plainly correct: at [77].
14 The appeal was dismissed: at [78].
This summary is provided to assist in the understanding of the Court’s grounds of decision. It is not intended to be a substitute for the reasons of the Court. All numbers in bold font and square brackets refer to the corresponding paragraph numbers in the Court’s grounds of decision.
What was the appeal about in Reliance Infrastructure Ltd v Shanghai Electric Group Co Ltd [2024] SGCA(I) 10?
Decided on 17 December 2024 by Robert French IJ with Sundaresh Menon CJ and Steven Chong JCA, the appeal concerned Reliance Infrastructure's bid to set aside an arbitral award founded on a Letter of Guarantee, on jurisdiction or public policy grounds, both resting on a contention that the Guarantee Letter was a forgery.
Why did the forgery argument fail in the Reliance Infrastructure v Shanghai Electric arbitration setting-aside case?
In [2024] SGCA(I) 10, the judgment records that Reliance Infrastructure raised no jurisdictional objection based on forgery in its arbitration defence and had expressly stated in Opening Submissions it was not alleging forgery, relying on fresh evidence only later in the SICC, which found it had waived the objection.
Statutes Cited
Cases Cited (4)
Referenced in
Statutes interpreted in this judgment
Legal concepts & references
Judgment
Read the full judgment on the official Singapore Courts portal.
Read on eLitigationSource: eLitigation ([2024] SGCA(I) 10)