Refusal to recognise an award

Where arbitrators have ruled that a contract is lawful, it will be difficult to sustain a challenge to the award. The challenge will have to be made on the ground that it would be contrary to public policy to enforce the award, and the definition of public policy in this context is a very narrow one. AJT v AJU [2010] SGHC 201, a decision of Chan Seng Onn J, is an exceptional case in which a public policy challenge was made out.

AJT: the facts

A company associated with AJT, a British Virgin Islands company, entered into a contract with AJU, a Thai company, with respect to the production of television programmes. The contract was governed by the law of Singapore and provided for arbitration by the Singapore International Arbitration Centre. Disputes arose between the parties and AJT (as assignee of the rights under the contract) initiated arbitration proceedings in August 2006. In November AJU made a complaint to the Thai police against AJT’s sole director and shareholder, and two others, asserting that they had been guilty of fraud and forgery. The Thai police commenced an investigation but, before the matter had been resolved, the parties entered into a settlement – the Concluding Agreement – in February 2008. The Concluding Agreement, which was governed by Singapore law provided that it would take effect (the Closing Date) when AJU received evidence of the termination of all criminal proceedings, and that AJU would pay AJT the sum of US$470,000. It was also agreed that all legal action by the parties would come to an end and that all claims would be regarded as fully settled.