Raising new issues

Judith Prakash J, in her interesting judgment in Kempinski Hotels SA v PT Prima International Development [2011] SGHC 171, discussed a number of important questions as to how an arbitrator should deal with new information coming to light in the course of an arbitration where partial awards have been issued on other questions. The judgment makes it clear that it is necessary for that new information to be introduced formally into the arbitration rather than simply raised by way of clarification to the earlier awards.

Kempinski: the facts

KH, a Swiss company, operated a number of hotels worldwide. PT, an Indonesian company, owned a hotel in Jakarta. In April 1994 the parties entered into a long-term agreement governed by the law of Indonesia under which KH was to market, operate and manage the hotel. KH took over the operation and management of the hotel in June 1998. However, between November 1996 and May 2000 the Indonesian Ministry of Tourism issued three decisions under which the contract could be carried out only by a company incorporated in Indonesia. No changes were made. Disputes thereafter arose: in October 2001 PT gave notice to KH that it regarded KH as being in material breach of contract; in February 2002 PT gave notice terminating the contract; and in April 2002 PT announced that it had entered into a management contract with another hotel group.