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

[2024] SGHC(I) 19 Singapore International Commercial Court 28 June 2024 • SIC/OA 23/2023 ( SIC/SUM 21/2024 ) |SIC/OA 1/2024 • 39 min read

10 cases cited (9 SG, 1 foreign) Cited by 1 case

Catchwords

Arbitration — Agreement — Scope Arbitration — Agreement — Breach Arbitration — Permanent anti-suit injunction

Practice Areas

Arbitration

Judges (1)

Sir Henry Bernard Eder Delivered

Counsel (11)

Prolegis LLC Firm Rev Law LLC Firm WongPartnership LLP Firm Chan Kit Munn Claudia Counsel Claimant Charlene Wee Swee Ting Counsel Claimant Daniel Chia Hsiung Wen Counsel Claimant Ker Yanguang (Ke Yanguang) Counsel Claimant Koh Swee Yen Counsel Defendant Liew Yik Wee Counsel Defendant Ng Tse Jun Russell Counsel Defendant Wong Wan Chee Counsel Defendant

Parties (3)

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

Case Significance

Pertamina International Marketing & Distribution Pte Ltd v P-H-O-E-N-I-X Petroleum Philippines, Inc (also known as Phoenix Petroleum Philippines, Inc) and another matter [2024] SGHC(I) 19 was decided in the Singapore International Commercial Court on 28 June 2024 by Sir Henry Bernard Eder IJ, following a hearing on 25 June 2024. The proceedings comprised Originating Application No 1 of 2024 and Originating Application No 23 of 2023 (Summons No 21 of 2024), brought under Section 8 of the International Arbitration Act 1994 and engaging Articles 6 and 34 of the UNCITRAL Model Law as set out in the First Schedule to that Act, together with Order 23 of the Singapore International Commercial Court Rules 2021.

The judgment concerned an arbitration brought under the auspices of the Singapore International Arbitration Centre (SIAC) in SIAC Case No ARB No 084 of 2022. The catchwords identify the issues as the scope and breach of the arbitration agreement and a permanent anti-suit injunction. The claimant was Pertamina International Marketing & Distribution Pte Ltd, represented by counsel from Prolegis LLC, including Daniel Chia Hsiung Wen and Charlene Wee Swee Ting. The defendants were P-H-O-E-N-I-X Petroleum Philippines, Inc and Udenna Corporation, with counsel from WongPartnership LLP and Rev Law LLC, including Koh Swee Yen. The matter cited the International Arbitration Act, the Arbitration Act, the Civil Law Act and the Supreme Court of Judicature Act.

Summary

SUPREME COURT OF SINGAPORE

28 June 2024

Case summary

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

Outcome: The SICC dismissed P-H-O-E-N-I-X Petroleum Philippines, Inc (a.k.a. Phoenix Petroleum Philippines, Inc)’s (“Phoenix”) application in SIC/SUM 21/2024 (“SUM 21”) to set aside the court’s previous order allowing Pertamina International Marketing & Distribution Pte Ltd (“PIMD”) to enforce a final arbitral award against the Phoenix and Udenna Corporation (“Udenna”) in Singapore.

In relation to SIC/OA 1/2024, the SICC granted PIMD’s prayer for a declaration that the award is final, valid and binding on Phoenix. The SICC also granted PIMD’s prayer for a permanent anti-suit injunction against Phoenix restraining the latter from pursuing proceedings in the Philippines to seek declarations that the award and the corresponding arbitral proceedings are void.

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, 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. The background is set out in Pertamina International Marketing & Distribution Pte Ltd v P-H-O-E-N-I-X Petroleum Philippines, Inc (also known as Phoenix Petroleum Philippines, Inc) [2024] SGHC(I) 13 (“Judgment”). Essentially, 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 dated 18 December 2023 (“ORC 69”).

5. 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.

6. 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 an interim ASI by way of SIC/ORC 5/2024 (“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 Award. Phoenix took no steps to suspend the Philippines Action.

7. On 13 May 2024, Phoenix filed SUM 21, requesting that ORC 69 be set aside.

The court’s decision

SUM 21

8. In relation to SUM 21, it was common ground that no application has ever been made by Phoenix to set aside the Award in Singapore in accordance with Art 34 of the UNCITRAL Model Law on International Commercial Arbitration as set out in First Schedule to the IAA (“Model Law”) and the 3-month time limit for doing so has expired. Thus, it was not open to Phoenix to seek recourse against the Award under Art 34 of the Model Law: at [15].

9. Notwithstanding that Phoenix was precluded from seeking recourse against the Award under Art 34 of the Model Law, it was open to it to invite the Court to refuse enforcement of the award as a matter of the Court’s discretion pursuant to s.19 of the International Arbitration Act 1994 based on the grounds set out in Art 36(1) of the Model Law. Relevantly, Art 36(1)(a)(iii) of the Model Law provides that recognition or enforcement may be refused if there was “proof” that an award “deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration”: at [16] to [19].

10. The Court rejected PIMD’s contention that the Judgment precludes Phoenix from asserting that the Award was not valid and binding on the basis of res judicata and/or estoppel. Nothing in the Judgment dealt with the question of whether there was a relevant arbitration agreement nor whether the Court should grant or refuse recognition or enforcement of the Award: at [21].

11. The Court concluded that the disputes under the individual contracts for the supply of petroleum products executed during the months of May and June 2021 under which PIMD alleged that Phoenix owed the sum of USD 124,534,382.23 (“Sale Contracts”) fell within the scope of the arbitration agreement as found under Clause 10.2 of the Memorandum of Understanding dated 20 November 2019 between Phoenix and PIMD (“MOU”): at [22] and [57].

12. The starting point of any contractual interpretation exercise is the words used in the contract itself. The weight of the authority is clear that arbitration agreements should apply equally to disputes under related agreements, particularly where the related agreements do not contain different dispute resolution provisions. This accords with the normal Fiona Trust presumption of one-stop adjudication set out in Fiona Trust & Holding Corp v Privalov [2007] Bus LR 1719. The Sale Contracts arose out of or are connected with the MOU because they came into existence pursuant to the parties' implementation of the projects as defined in the MOU. There was nothing in the MOU which displaces this conclusion: at [42], [44], [46] and [47].

13. While the Court accepted that each Sale Contract was discrete in the sense that each contract related to a separate and distinct shipment involving a unique quantity of petroleum products and a unique price, they were all entered into as part of and pursuant to the “umbrella agreement” contained in the MOU. That the Sale Contracts did not refer to the MOU was not necessarily surprising and, in any event, did not assist with answering the critical question as to whether the disputes arose “out of or in connection with” the MOU: at [48] to [51].

14. The Court rejected Phoenix’s submission that the arbitration agreement under Clause 10.2 of the MOU had expired and ceased to bind PIMD and Phoenix by the time PIMD commenced ARB 84. A dispute resolution clause survives the substantive contract so as to resolve whatever disputes that may subsequently come to light even after the expiry of the main contract: at [55].

OA 1

15. The Court held that PIMD was entitled to a declaration that the Award was final, valid and binding on Phoenix given that Phoenix had not applied to set aside the Award within the 3-month deadline: at [59].

16. As for PIMD’s application for a permanent ASI, the Court accepted that the SICC has jurisdiction to grant a permanent ASI in aid of arbitration proceedings. The Court rejected Phoenix’s submission that the SICC does not have jurisdiction to grant a permanent ASI as O 23 r 3(1) of the SICC Rules 2021 provides that the SICC may hear “only proceedings relating to international commercial arbitration that the General Division may hear under the IAA” and that an application for a permanent ASI is not one made “under the IAA”. There was a difference between the basis for the court’s jurisdiction to deal with a matter, and the court’s powers to grant relief once the court’s jurisdiction to deal with the matter was established. Once the SICC has the jurisdiction to deal with a case under section 18D(2)(a) of the Supreme Court of Judicature Act 1969 (2020 Rev Ed), which plainly applies here, the SICC is thereby clothed with all the powers of the General Division of the High Court to grant appropriate relief including a permanent ASI in aid of the arbitration proceedings, and the Court can therefore go on to exercise the power under s 4(10) of the Civil Law Act 1909 (2020 Rev Ed): at [62] to [64].

17. The Court exercised its discretion to grant the permanent ASI sought against Phoenix as the proceedings brought by Phoenix in the Philippines go much further than an attempt to resist enforcement in that they seek a declaration that both the Award and ARB 84 itself are void: at [67].

18. The Court held that the case of Sun Travels & Tours Pvt Ltd v Hilton International Manage (Maldives) Pvt Ltd [2019] 1 SLR 732 was different from the circumstances in the present case for three reasons. First, recourse against the Award was to be had in the Singapore courts as Singapore was the seat of arbitration. The active steps taken by Phoenix by commencing and pursuing proceedings in the Philippines to persuade the Philippine Courts that the arbitration and the Award were void was contrary to Art 34 of the Model Law and therefore impermissible as a matter of Singapore law. Second, although comity was obviously an important consideration, it loses some significance in cases involving exclusive jurisdiction clauses and arbitration agreements. Third, the continued pursuit of the proceedings in the Philippines by Phoenix was held to be a breach of the order by this Court in ORC 5 and a contempt of court. Phoenix could not pray in aid the fact that the proceedings in the Philippines have progressed since 18 January 2024 in support of its case that such progress was a relevant factor to be taken into account in its favour: at [68] to [71].

19. The Court accordingly dismissed SUM 21 and granted the relief sought by PIMD in OA 1 subject to slight adjustments of the wording of the prayers therein: at [72].

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.

What was Pertamina v Phoenix Petroleum [2024] SGHC(I) 19 about?

Decided by the Singapore International Commercial Court on 28 June 2024, this matter concerned the scope and breach of an arbitration agreement and a permanent anti-suit injunction, arising from an SIAC arbitration (Case No ARB 084 of 2022) between Pertamina International Marketing & Distribution and Phoenix Petroleum Philippines.

Who decided the Pertamina v Phoenix Petroleum anti-suit injunction case?

Sir Henry Bernard Eder IJ decided [2024] SGHC(I) 19 in the Singapore International Commercial Court, in Originating Application No 1 of 2024 and Originating Application No 23 of 2023 (Summons No 21 of 2024), heard on 25 June 2024 and decided 28 June 2024.

What statutes were engaged in Pertamina v Phoenix Petroleum [2024] SGHC(I) 19?

The proceedings invoked Section 8 of the International Arbitration Act 1994, Articles 6 and 34 of the UNCITRAL Model Law in the First Schedule, and Order 23 of the Singapore International Commercial Court Rules 2021. The Arbitration Act, Civil Law Act and Supreme Court of Judicature Act were also cited.