Successful protection of interests of the Belarusian company in the Singapore International Arbitration Centre

The arbitration team of REVERA law group has won another case concerning a recovery of advance payment, penalties and losses under a supply contract with a Malaysian company in another arbitration dispute considered by a sole arbitrator under the rules Singapore International Arbitration Centre (SIAC).

Belarusian company entered in a contract for the supply of goods with a large state-owned Malaysian company, a manufacturer of medical products. The goods were to be delivered by sea to the port of Klaipeda, and then transferred to Minsk, however the Malaysian supplier successfully delivered only a part of the goods. Moreover, during the acceptance procedure it turned out that the delivered part of the goods was partially damaged and unsuitable for use.

Pre-trial negotiations of the parties were unsuccessful and the Belarusian company decided to apply to arbitration to initiate a dispute on the collection of debts for undelivered and low-quality goods.

Interesting features of the case to notice

Expedited procedure

The agreement provides for the resolution of all future disputes according to the rules of SIAC by an arbitration consisting of 3 arbitrators. At the same time, resolving a dispute by 3 arbitrators entails significant costs for the parties, and the process itself usually lasts much longer than when the dispute is resolved by a sole arbitrator.

The SIAC Rules allow for the application of an expedited procedure with a sole arbitrator on the basis of a motion, despite the provisions on the number of arbitrators in the contract. The Chairman of SIAC considers the application and satisfies it if it meets certain criteria (by the nature of the dispute, by the amount of the claim, etc.). In this dispute, the REVERA team filed such a petition, which was considered and granted by the Chairman of SIAC. Due to this, the present dispute was considered by the sole arbitrator in a shorter time and with less expense for the client.

Applicable law to the contract

The key issue of the dispute became determination of the law applicable to the contract and on the basis of which the dispute was to be resolved since the contract did not expressly provide for the applicable law. Moreover, Malaysia is not a party to the Vienna Convention on Contracts for the International Sale of 1980.

In such a situation, the applicable law was to be determined on the basis of the conflict-of-laws rules of the law of the place of jurisdiction, that is, on the basis of the law of Singapore.

On the basis of the Singapore law and relevant court practice, REVERA was successful to prove that the dispute should be considered on the basis of the laws of the Republic of Belarus and the Vienna Convention as the most closely related to the contract, and not the law of the supplier's country i.e. Malaysian law.

As a result, the Sole Arbitrator agreed with the position of the Belarusian company and ordered the refund of the advance payment, the debt for partially undelivered and low-quality goods, the penalty for violation of terms of delivery and a fine for non-return of the advance payment at the first request of the Belarusian company, as well as all procedural expenses.

Arbitration of disputes at siac

In recent years there has been a significant increase in the popularity of Asian arbitration institutions. SIAC is the most famous of the arbitration institutions of the Asian region and, according to the results of the latest reports, is the 2nd most popular arbitration institution in the world.

In recent years there has been a significant growth in the popularity of Asian arbitration dispute resolution institutions. SIAC is the most famous of the arbitration institutes in the Asian region and, according to the results of a large study conducted by the international law firm White & Case together with Queen Mary University of London, is the second most popular arbitration institute in the world.

At the same time arbitration in Asia is not quite widespread among the CIS based companies. The most common reasons are their remoteness and insufficient knowledge of its Rules and procedure by Belarusian lawyers.

REVERA has experience in handling cases in all the most popular arbitration institutions in the Asian region, including the Court of Arbitration at the China International Economic and Trade Arbitration Commission (CIETAC) and the Singapore International Arbitration Center (SIAC). 

At the moment, REVERA provides representation of clients in arbitration disputes around the world, including Belarus, the CIS, Asian and European arbitration institutions.