What was Pertamina International Marketing & Distribution v Phoenix Petroleum [2024] SGHC(I) 13 about?

It was a Singapore International Commercial Court decision of 26 April 2024 by Sir Henry Bernard Eder IJ concerning a SIAC arbitration (ARB 84) and a Final Award dated 28 November 2023, addressing breach of an arbitration agreement, an anti-suit injunction, and service of process.

What did the SIAC Final Award in the Pertamina v Phoenix dispute decide?

The Final Award dated 28 November 2023 in SIAC Case No ARB 084 of 2022 determined that Phoenix Petroleum Philippines, Inc and third-party guarantor Udenna Corporation were jointly and severally liable to Pertamina International Marketing & Distribution Pte Ltd in aggregate amounts including US$142,932,694.04.

[2024] SGHC(I) 13 — Pertamina International Marketing & Distribution Pte. Ltd. v P-H-O-E-N-I-X Petroleum Philippines, Inc. (a.k.a. Phoenix Petroleum Philippines, Inc.)

SUPREME COURT OF SINGAPORE

26 April 2024

Case summary

Pertamina International Marketing & Distribution Pte Ltd v P-H-O-E-N-I-X Petroleum Philippines, Inc (a.k.a. Phoenix Petroleum Philippines, Inc) [2024] SGHC(I) 13
SIC/OA 1/2024 (SIC/SUM 8/2024; SIC/SUM 10/2024)

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Decision of the Singapore International Commercial Court (delivered by Sir Henry Bernard Eder IJ):

Outcome: In relation to SIC/SUM 8/2024 (“SUM 8”), the SICC makes no orders on P-H-O-E-N-I-X Petroleum Philippines, Inc (a.k.a. Phoenix Petroleum Philippines, Inc)’s (“Phoenix”) prayer for a declaration that the proceedings have not been validly served on Phoenix. The SICC dismissed the remaining prayers in SUM 8 with the consequence that the interim anti-suit injunction previously ordered in SIC/ORC 5/2024 (“ORC 5”) was to stand. The SICC ordered Phoenix to pay Pertamina International Marketing & Distribution Pte Ltd (“PIMD”) the costs of and incidental to SUM 8. The quantum of costs is to be assessed if not agreed between the parties.

In relation to SIC/SUM 10/2024 (“SUM 10”), SICC makes no order as to Phoenix’s prayer for a declaration at attempts at service by PIMD’s counsel on Phoenix’s counsel did not constitute valid service of the proceedings and ordered that PIMD pay Phoenix costs of and incidental to the application as follows: (a) S$1,000; and (b) the costs of filing and service of SUM 10 and filing and service of the 2nd Witness Statement of Socorro Ermac Cabreros filed on 4 March 2024, as per the statement of accounts to be rendered by the SICC Registry. The SICC ordered the costs of the application to be set off against the costs in SUM 8 that have been ordered in favour of PIMD.

Background

1. These proceedings concern an arbitration brought under the auspices of the Singapore International Arbitration Centre (“SIAC”) in SIAC Case No. ARB No. 084 of 2022 (“ARB 84”) and a Final Award signed and dated 28 November 2023 (“Award”) whereby it was determined that the defendant, Phoenix, and another third party guarantor, Udenna Corporation (“Udenna”), were jointly and severally liable to the claimant, PIMD. The claims advanced in the arbitration related to certain contracts formed by an exchange of emails between PIMD and Phoenix for the supply of petroleum products during the months May and June 2021.

2. Phoenix alleges that there was never any binding arbitration agreement between the parties and that therefore the arbitral tribunal in ARB 84 (the “Tribunal”) had no jurisdiction to hear the disputes. At a very early stage of the arbitral proceedings, Phoenix informed the tribunal of its jurisdictional objection and thereafter took no part in the arbitral proceedings. Despite Phoenix’s jurisdictional objections, the Tribunal proceeded to hear the dispute without its participation and subsequently made the Award. On 30 November 2023, SIAC registered and issued the Award in PIMD’s favour.

3. On 2 December 2023, Phoenix commenced proceedings in the Republic of the Philippines (the “Philippines Court”) by filing a Complaint against PIMD and Udenna (the “Philippines Action”) seeking a declaration that ARB 84 and the Award are void and the issuance of a permanent injunction enjoining PIMD and Udenna from enforcing or undertaking to enforce the Award against Phoenix. Phoenix also sought, as a matter of “extreme urgency”, the issuance of a Temporary Restraining Order and Writ of Preliminary Injunction pending the determination of the Philippines Action enjoining PIMD and Udenna from enforcing or undertaking any step to enforce the Award against Phoenix.

4. On 12 December 2023, PIMD filed an originating application without notice in SIC/OA 23/2023 (“OA 23”) to register and enforce the Award in Singapore which was granted by way of SIC/ORC 69/2023 (“ORC 69”).

5. On 27 December 2023, pursuant to the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (the “Hague Convention”) (to which both Singapore and the Philippines are signatories), PIMD filed the requisite Model Forms for service of OA 23 and ORC 69 out of Singapore pursuant to the Hague Convention.

6. On 12 January 2024, PIMD filed SIC/OA 1/2024 (“OA 1”) in this court against Phoenix for, among other things, orders that: (a) Phoenix withdraw the Philippines Action; (b) Phoenix be restrained from pursuing or continuing to pursue the Philippines Action so long as the Award is not set aside; and (c) Phoenix be restrained from pursuing or continuing to pursue any further and/or other proceedings of any nature in the Philippines or anywhere else in the world against PIMD, in relation to the setting aside of or challenge to the Award. On the same day, PIMD also filed SIC/SUM 2/2024 (“SUM 2”) in this court against Phoenix for an interim anti-suit injunction (“ASI”). SUM 2 was heard on 18 January 2024 by Sir Henry Bernard Eder IJ on an ex parte basis who granted interim ASI by way of ORC 5 with the proviso that nothing in the order prevented Phoenix from taking the necessary steps to resist any recognition or enforcement of the Final Award. Phoenix took no steps to suspend the Philippines Action.

7. On 30 January 2024, PIMD filed a Motion to Dismiss in the Philippines Action.

8. On 17 February 2024, Phoenix filed SUM 8 seeking, among other things, the following orders: (a) a declaration that these proceedings have not been validly served on Phoenix; (b) that the court decline to exercise jurisdiction to hear OA 1 and accordingly dismiss OA 1; (c) in the alternative to (b), that all proceedings in OA 1 be stayed, pending the final determination of the Philippines Action; and (d) that the injunction granted to PIMD against Phoenix pursuant to SUM 2, vide ORC 5, be set aside.

9. On 4 March 2024, Phoenix filed SUM 10 seeking, among other things, a declaration that attempts at service by PIMD’s counsel, ProLegis LLC, on Phoenix’s counsel, Rev Law LLC, did not constitute valid service of these proceedings on the Defendant and should be set aside.

The court’s decision

10. In relation to SUM 10, it was common ground between the parties that although PIMD has made and continues to make efforts to serve Phoenix through the appropriate diplomatic channels, there has, as yet, been no valid formal service of OA 1 on Phoenix. In these circumstances, the court considered it unnecessary to make any specific order as sought by Phoenix: at [26].

11. As for SUM 8, PIMD submitted that Phoenix was in contempt of court and that, in the exercise of its discretion, this court should refuse to hear Phoenix without first purging its contempt. The court disagreed with Phoenix that its efforts to continue the Philippines Action fell outside the scope of ORC 5 as Phoenix had actively sought an injunction from the Philippines Court. Furthermore, the Philippines Action could not be characterised as an attempt simply to resist enforcement and was in actuality an attempted pre-emptive strike. In any event, in seeking an order that ARB 84 and the Award were void the Philippines Action actively sought relief going beyond simple resistance of enforcement of the Award. Thus, the actions taken by Phoenix in the Philippines Action clearly constitute a breach of ORC 5 and contempt of court. Notwithstanding this, the court did not consider it appropriate to take the extreme course of refusing to hear Phoenix’s submissions in SUM 8: at [28], [32] to [35].

12. The court considered it unnecessary to deal at this stage with Phoenix’s submissions that the court had no jurisdiction to grant a permanent ASI in OA 1. At this hearing, PIMD did not seek a permanent injunction and Phoenix’s prayers in SUM 8 did not require determination as to whether the SICC has the jurisdiction to grant such relief: at [36] and [38].

13. The court rejected Phoenix’s submission that ORC 5 should be set aside in the absence of valid service of these present proceedings on Phoenix. First, Phoenix has submitted to the jurisdiction of this court by the issuance of SUM 8 and seeking the relief sought therein, in particular by inviting the court by way of a primary prayer to exercise its discretion to decline jurisdiction to hear OA 1 and accordingly dismiss OA 1. Second, even if that was wrong, as to whether OA 1 should be dismissed, the court reserved its decision on whether the SICC has the jurisdiction to grant a permanent ASI to a later stage of the proceedings. As to whether ORC 5 should be set aside, the court has the jurisdiction to issues interim order before formal service of the originating process in an appropriate case: at [39], [42] and [43].

14. Phoenix submitted that this court should decline to exercise jurisdiction over OA 1 because there was no arbitration agreement between PIMD and Phoenix. The court rejected this submission because the Tribunal has made express findings on the existence of the arbitration agreement applicable to the dispute between PIMD and Phoenix. These rulings are final and binding under Singapore law unless set aside. The time for Phoenix to apply to set aside the Award has passed: at [44], [45] and [47].

15. Phoenix submitted that the Philippines Action has now progressed, that PIMD has, in effect, submitted to the jurisdiction of the Philippines Court and that therefore, in the exercise of its discretion, this court should set aside ORC 5. The court rejected this submission for three reasons. First, the Singapore court, being the supervisory court, has the function of protecting the integrity of the Award. It is well established that the court can and generally will grant appropriate injunctive relief to protect an award to restrain breaches of an arbitration agreement even after arbitration proceedings have ended and an award rendered. Second, any progress made in the Philippines Action was due to active steps by Phoenix in breach of ORC 5 and hence did not carry nay weight. Third, PIMD has not voluntarily submitted to the jurisdiction of the Philippines Court by filing the Motion to Dismiss in the Philippines Action as it was merely a defensive step in objecting to the jurisdiction of the Philippines Court: at [50], [51], [53], [54] and [62].

This summary is provided to assist in the understanding of the Court’s judgment. 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 judgment.

Pertamina International Marketing & Distribution Pte. Ltd. v P-H-O-E-N-I-X Petroleum Philippines, Inc. (a.k.a. Phoenix Petroleum Philippines, Inc.)

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Summary

What was Pertamina International Marketing & Distribution v Phoenix Petroleum [2024] SGHC(I) 13 about?

What did the SIAC Final Award in the Pertamina v Phoenix dispute decide?

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