Out-Law / Your Daily Need-To-Know

Singapore court clarifies source of injunction powers

Out-Law News | 09 Apr 2018 | 1:34 pm | 1 min. read

The Singapore High Court has clarified the source of its power to grant permanent anti-suit injunctions in relation to foreign court proceedings in arbitration.

Handing down judgment in a case brought by hotel chain Hilton against a hotel company, the Singapore court disagreed with previous authorities over the source of its ability to grant anti-suit injunctions.

Instead of saying that these powers came from section 4(10) of the Civil Law Act, the High Court said they came from section 18(2), read alongside paragraph 14 of the First Schedule of the Supreme Court of Judicature Act which gives the court the power to "grant all reliefs and remedies at law and equity".

The court also decided that an article restricting the court’s intervention into matters governed by the recently-enacted Model Law on international commercial arbitration did not limit the court's power to grant a permanent anti-suit injunction.

The court ruled it had jurisdiction over foreign company Sun Travels for the purposes of granting an anti-suit injunction and declaratory relief as the originating process had been validly served on Sun Travels.

The case stemmed from a dispute between Hilton International Manage (Maldives) and Sun Travels & Tours, a company which owned a Maldivian hotel that Hilton was going to manage under its brand.

After Sun Travels gave notice to terminate the agreement, Hilton began arbitration in Singapore to claim damages for wrongful termination. Sun Travels counter-claimed, alleging breaches of the management agreement and fraudulent misrepresentation.

The arbitral tribunal issued a partial award in May 2015 in favour of Hilton, after which Sun Travels stopped participating in the arbitration. The tribunal then issued a final award ordering Sun Travels to pay Hilton $20 million in damages.

Sun Travels began counter-proceedings in the Maldivian Civil Court. That court handed down judgment in favour of Sun Travels and ordered Hilton to pay $16m in damages.

Hilton tried to enforce the arbitral award by beginning enforcement proceedings in the Maldives, but the Maldivian court refused enforcement. Hilton then applied to the Singapore High Court for an anti-suit injunction to restrain Sun Travels from taking legal action in the Maldives.

The Singapore court decided it did have jurisdiction over Sun Travels, and after ruling on the source of its anti-suit injunction powers, ruled that the Maldivian civil proceedings were in breach of an implied negative obligation in the arbitration agreement not to set aside or challenge the award in jurisdictions other than the seat of arbitration.

It also ruled that Sun Travels’ attempts to challenge the award in the Maldives were “vexatious and oppressive”, and granted a limited anti-suit injunction preventing Sun Travels from relying on the Maldivian civil proceedings judgment.