SETTING ASIDE OF ARBITRAL AWARD – BRQ AND ANOTHER V BRS AND ANOTHER AND ANOTHER MATTER [2019] SGHC 260
Is the three-month time limit stipulated in Art 34(3) of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”) a strict time limit? And when does the time begin to run if a party has made a request under Art 33 of the Model Law? These issues were considered and addressed by the High Court in BRQ and another v BRS and another and another matter [2019] SGHC 260 (“BRQ v BRS”).
Art 34(3) Model Law. Art 34(3) of the Model Law provides that an application for setting aside “may not be made after three months have elapsed from the date on which the party making that application had received the award or, if a request had been made under Article 33, from the date on which that request had been disposed of by the arbitral tribunal.”
The High Court held that the “weight of authority in Singapore is that [the three-month time limit] is strict and cannot be extended” ([35] BRQ v BRS); it is a “written law relating to limitation”, and therefore it “cannot be extended under the court’s general power to extend time” ([35] BRQ v BRS).
When does time begin to run if an application was made under Art 33? The issue then turned on whether, on the facts of the case, would the setting aside application fall under the first limb (3 months from date of receipt of award) or the second limb (3 months from date of disposal of a request under Art 33 Model Law) of Art 34(3) of the Model Law ([35] BRQ v BRS).
This was relevant because in BRQ v BRS, the award dated 24 January 2018 was received by the parties on 31 January 2018. However, the respondent’s application under Art 33 of the Model Law made on 1 March 2018 was only dismissed on 23 March 2018 ([36] BRQ v BRS). Given that the respondent’s setting aside application was made on 22 June 2018, if the first limb applied, the respondent’s setting aside application would be made out of time.
“Genuine” application and materiality needed? In this regard, the claimants had argued that the respondent’s request under Art 33 of the Model Law does not fall within the second limb of Art 34(3) of the Model Law, as such a request must be “genuinely made for one of the purposes set out in Art 33”, or “is material to the setting aside application which the aggrieved party ultimately brings” ([38] BRQ v BRS). These propositions were, however, rejected by the High Court.
At [44] – [50] BRQ v BRS, the High Court rejected the argument that the request under Art 33 must be “genuine” because (a) Art 33 of the Model Law itself provides fixed time-limits ([45] BRQ v BRS), (b) the “more contrived a request is, the quicker the tribunal will dispose of it” ([46] BRQ v BRS), and more importantly, (c) introducing a “qualitative test… would introduce great uncertainty post-award” and would cause issues with when the three-month time limit under Art 34(3) would begin to run, which is “inimical to the fundamental principle of finality of awards.”
At [51] – [54] BRQ v BRS, the High Court also rejected the argument that the request needed to be “material” to the setting aside application, on the basis that under the Model Law, “the commencement of the time limit for challenging an award is postponed by every application to correct an award” ([53] BRQ v BRS, emphasis in original).
Conclusion. BRQ v BRS makes clear that the three-month time-limit is a strict time-limit (which is not new), and more importantly, that the commencement of the three-month time-limit under Art 34(3) Model Law would be postponed whenever a party makes a request under Art 33, regardless of whether the request is “genuine” or “material” to any subsequent setting aside application.
Tags: UNCITRAL Model Law on International Commercial Arbitration; Setting Aside; Art 34(3) Model Law; Art 33 Model Law; three-month time limit
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