CYW v CYX

CYW, an Indonesian state-owned company, was involved in a programme to buy cattle in Queensland for slaughter and import into Indonesia as beef. Its then director, Mr C, purportedly on CYW's behalf, signed an agreement with the Australian supplier, executed a security deed governed by Queensland law in favour of CYX (the Singapore branch of a Dutch banking cooperative, which bought the supplier's bills of exchange), and accepted 14 bills. After Mr C was removed in June 2018, CYW refused further bills, and CYX's receivers seized and sold the livestock.

CYW began an SIAC arbitration on 3 February 2020, claiming the deed was invalid for lack of capacity and authority. CYX counterclaimed on the bills. Over the following months CYW repeatedly missed deadlines for translations, document production and its reply, citing difficulty obtaining ministerial instructions and later Covid. In Procedural Order No 2 of 3 July 2021 the tribunal refused to suspend the arbitration and ordered CYW to file its witness statements, expert reports and English translations by 7 July 2021, failing which they would be excluded. CYW said its Indonesian law expert, Prof F, had Covid. It later withdrew under protest; the tribunal refused to allow withdrawal and proceeded. The award dismissed CYW's claim, upheld the deed and ordered CYW to pay USD8,249,702 with interest and costs. CYW applied to set the award aside under s 24(b) of the International Arbitration Act 1994 and Art 34(2)(a)(ii) of the Model Law (HC/OA 491/2022, transferred to the SICC as SIC/OA 3/2022).

1. Whether the tribunal's 3 July 2021 orders denied CYW a reasonable opportunity to present its case
2. Whether any breach caused real prejudice by depriving the tribunal of material with a real chance of making a difference

Following China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another [2020] 1 SLR 695, the court asked whether the tribunal's conduct fell within the range of what a reasonable and fair-minded tribunal might have done, giving deference to procedural decisions. It did. CYW had consistently failed to comply with directions despite repeated extensions; it had about eight months from CYX's defence to prepare its evidence; by 25 June 2021 it could give no timeframe for the outstanding material; there was only a June medical certificate and no evidence of Prof F's health when the deadline fell; further delay threatened firm hearing dates; and CYX had a legitimate interest in prompt determination of its substantial counterclaim. Unlike in L W Infrastructure, CYW was heard on the orders through its letters of 5 and 7 July 2021. Had the only reason for excluding Prof F's report been that expert evidence on Indonesian law was unnecessary, CYW's complaint might have had some force, since the parties had contemplated expert evidence on foreign law, but the orders were justified on the other grounds. Covid could hardly explain the missing translations of documents filed in September 2020.

On prejudice, there was no evidence of what Prof F would have said. The tribunal had unanimously held, under Queensland law, that Mr C had ostensible authority or that CYW was estopped from denying it; even the dissenting arbitrator, who read Indonesian company law differently on actual authority, agreed with that. Nothing suggested Prof F could have displaced that finding. On the Language Law, the tribunal held it irrelevant to a Queensland-law deed and in any case not in force or retrospective at the time, and nothing suggested Prof F would have disagreed.

The court dismissed the application and ordered CYW to pay CYX's costs, with directions for submissions on quantum if the parties could not agree within 14 days.