SINGAPORE Trends and Developments Contributed by: Koh Swee Yen, Joel Quek, Alessa Pang and Andre Soh, WongPartnership LLP
Geopolitics, Sanctions and Third-Party Funding Costs The final set of developments concerns the effect of international sanctions and evolving funding arrange - ments on Singapore-seated arbitration, following the introduction of the SIAC Rules 2025. The impact of sanctions In DRL v DRK [2026] SGHC 32, the GDHC dismissed an application to set aside an award where the under - lying arbitration had been complicated by internation - al sanctions against the applicant, which resulted in its asset being frozen and impaired its ability to fund its participation in the arbitration and furnish security. The tribunal terminated the arbitration under Article 32 (2) (c) of the Model Law on the basis that its continuation had become impossible. The applicant sought to set aside the award on the basis that there had been a breach of natural justice, specifically: • the applicant had a fundamental right in the arbitra - tion to a determination on the merits of its claim against the respondent; • the tribunal had a duty, in making any decision, to apply its mind to and consider the essential issues and arguments raised by parties; and • the applicant had a right to fair and equal treat - ment, and an expectation that arbitrators would not act unreasonably or capriciously. The court held that there had been no breach of natu - ral justice and that the tribunal had properly applied Article 32 (2)(c): parties to an arbitration do not have an unqualified right to a determination on the merits, and a finding of impossibility under Article 32 (2)(c) obliges the tribunal to terminate the arbitration, which nec - essarily means there will be no determination on the merits. The tribunal had also properly applied its mind to the issue of whether the arbitration should be termi- nated. This decision illustrates that sanctions-driven impossibility can legitimately bring an arbitration to an end without offending a party’s right to be heard. Sanctions also featured in DKB v DKC [2025] SGHC(I) 11, where the assignee of a Swiss-seated award worth over USD315 million sought leave to enforce it. The assignee entered into a settlement deed with the award debtor, agreeing to stay enforcement of the
The approach in DRO v DRP was followed shortly afterwards in DSQ v DSR [2026] SGHC 67, which concerned a FIDIC-form construction contract with pre-arbitral procedures. The court held that non-com - pliance with such procedures is a matter of admissibil - ity, not jurisdiction, and also dismissed challenges to the award premised on breach of natural justice. DSQ v DSR is presently under appeal. Taken together, these decisions suggest that non- compliance with a procedural precondition may not readily be characterised as a jurisdictional defect capable of invalidating an award. Who are the parties? Assignment and scope The identification of the proper parties to an arbitration agreement was squarely in issue in Hyatt Terminal and Industrial Corp v Filipinas Third Millenium Realty Corp [2026] SGHC(I) 3. The SICC set aside an ICC award on the basis that the claimant was not a proper party to the arbitration agreement, because the purported assignment of rights and obligations under the under - lying lease required the counterparty’s consent, which had not been given, and was invalid under the gov - erning Philippine law. The decision is a reminder that arbitral jurisdiction is founded on consent, and that a defective assignment cannot bootstrap a stranger into an arbitration agreement. Hyatt Terminal is presently under appeal. By contrast, in DQR and another v DQT [2026] SGHC 23, the GDHC dismissed an application to set aside an award said to exceed the scope of submission to arbitration. The court found that the tribunal had care - fully refrained from determining matters governed by a separate joint-venture deed that lay outside the arbi - tration, and had properly directed payment of dam - ages to the successful party. The contrast between Hyatt Terminal and DQR v DQT illustrates the fact-sensitive nature of jurisdictional and scope challenges, and the courts’ insistence on a close reading of what was actually submitted to the tribunal.
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