Navigating Global Enforcement: Singapore Court Clarifies Limits Of Seat Jurisdiction

In the complex landscape of international arbitration, the interplay between seat courts and enforcement courts continues to shape the strategic decisions of award creditors and debtors alike. A recent decision by the Singapore High Court offers timely guidance on the territorial boundaries of a seat court's supervisory powers, particularly in the context of anti-enforcement relief. The article examines how the court's ruling reinforces the principle that enforcement courts retain independent discretion under the New York Convention; even when proceedings at the seat are ongoing.

In a significant decision for parties involved in international arbitration, the Singapore High Court in Vietnam National Industry - Energy Group v Joint Stock Company (Power Machines – ZTL, LMZ, Electrosila Energomachexport) [2025] SGHC 180 has reinforced the territorial limits of a supervisory (or "seat") court's powers. The court dismissed an application for an anti-enforcement injunction, confirming that it would not restrain a party from enforcing an arbitral award in other jurisdictions, even while setting-aside proceedings were ongoing in Singapore.

This decision serves as a critical reminder of the discretion afforded to enforcement courts under the New York Convention and underscores the high bar for obtaining anti-enforcement relief in Singapore.

Background of the dispute

The dispute arose after the defendant ("PM") obtained a favourable SIAC arbitral award (the "Final Award") against the claimant ("PVN"). Subsequently, two parallel streams of legal action commenced:

1. Enforcement Proceedings: PM began enforcement proceedings in Russia and also obtained leave from the Singapore High Court to enforce the Final Award in Singapore. Subsequently, PVN applied to the Singapore High Court to set aside the leave obtained by PM to enforce the Final Award.
2. Setting-Aside Proceedings: PVN applied to the Singapore High Court (as the seat court) to set aside a key part of the Final Award, arguing a breach of natural justice.

In July 2024, the Singapore court found that there had been a breach of the fair hearing rule. However, instead of setting aside the entire award, the judge exercised his discretion under the UNCITRAL Model Law to remit the problematic issue back to the arbitral tribunal for reconsideration.

The setting-aside application by PVN of PM's leave for enforcement was suspended, and the court ordered that PM could not enforce the award in Singapore pending the outcome of the remission. The application by PVN to set aside the final award was also adjourned to hear the remission. Both parties appealed the decisions.

The enforcement race in Russia

While the Singapore proceedings were ongoing, the enforcement action in Russia proceeded apace. The judgment details PVN's sustained but ultimately unsuccessful efforts to halt enforcement there (paragraphs 9-17).

Significantly, the Moscow City Arbitrazh Court refused to postpone its enforcement proceedings pending the outcome of the Singapore applications. It allowed recognition and enforcement of the Final Award, issued a writ of execution, and authorised the foreclosure of receivables due to PVN from its Russian entities. PVN's subsequent appeals, including a cassation appeal to the Supreme Court of the Russian Federation, were all dismissed.

Meanwhile, the arbitral tribunal issued a new award on the remitted issue (the "Remission Award"), confirming its original decision. PVN also requested the Moscow Court to reconsider its enforcement ruling earlier, but this request was also dismissed. PVN's attempts to suspend enforcement in Russia consistently failed. Faced with mounting enforcement pressure in Russia, PVN returned to the Singapore court, this time seeking a worldwide anti-enforcement injunction.

PVN's arguments for a worldwide injunction

PVN sought to restrain PM from enforcing the award anywhere in the world pending the final outcome of its setting-aside applications in Singapore (paragraphs 20-22). Its case was built on three primary arguments:

1. A contractual right: PVN argued that the parties' agreement to a Singapore-seated arbitration gave it a contractual right under Singapore law (specifically Article 36(1)(a)(v) of the Model Law) to prevent enforcement in any jurisdiction while the award was suspended by the Singapore court.
2. Ouster of jurisdiction: PVN claimed that enforcing the award elsewhere breached an implied term in the arbitration agreement that a party cannot oust the jurisdiction of the Singapore courts as the chosen supervisory authority.
3. The ends of justice: PVN asserted that an injunction was necessary to preserve the status quo pending the Singapore Court of Appeal's decision, arguing that its appeal was likely to succeed and would be rendered nugatory if enforcement proceeded.

The High Court's rejection of the injunction

The Singapore High Court decisively rejected all of PVN's arguments, providing a clear analysis of the legal principles governing the relationship between seat courts and enforcement courts.

(1) No implied contractual right to prevent enforcement.

The court found PVN's primary argument to be based on a misunderstanding of the law. It clarified that neither the Model Law nor Singapore's International Arbitration Act 1994 grants a contractual right to a party to block foreign enforcement. These provisions give an enforcement court the discretion to refuse enforcement if an award has been set aside or suspended at the seat; they do not create a right for the award debtor to injunct the award creditor.

(2) Foreign enforcement does not oust the seat court's jurisdiction (paragraphs 31-32)

The court dismissed the "ouster of jurisdiction" argument as "wholly unmeritorious." It held there was no basis to imply such a term into the arbitration agreement. More fundamentally, the judge clarified that the roles of a seat court and an enforcement court are distinct. A foreign court's decision to enforce an award within its own territory is an exercise of its own jurisdiction and does not impinge upon or "oust" the Singapore court's supervisory jurisdiction over the arbitral process itself.

(3) The New York Convention and the discretion of enforcement courts (paragraphs 36-41)

This was the core of the court's reasoning. The judge emphasised the established principle under Article V(1)(e) of the New York Convention: an enforcement court may, but is not required to, refuse enforcement of an award that has been set aside by a seat court. Citing the Singapore Court of Appeal's decision in The Republic of India v Deutsche Telekom AG [2024] 1 SLR 56, the judgment affirmed that this provision is permissive, not mandatory.

The court reasoned that granting the injunction would be inconsistent with the New York Convention, as it would improperly interfere with the discretion expressly granted to foreign enforcement courts. PVN's aspersions against the Russian courts were dismissed as unfounded. Even if PVN ultimately succeeded in having the award set aside in Singapore, the Russian court would still retain the discretion to enforce it. The fact that the Singapore appeal was still pending only made PVN's case weaker.

Key takeaways

1. Seat Court and Enforcement Court Powers are Distinct: The supervisory role of a seat court does not extend to dictating enforcement outcomes in other countries. Parties must be prepared to contest enforcement in each jurisdiction where assets are located.
2. Setting Aside is Not a Silver Bullet: A successful application to set aside an award at the seat is not a guaranteed shield against worldwide enforcement. The New York Convention framework allows enforcement courts the discretion to enforce awards that have been annulled at the seat.
3. Expect Parallel Proceedings: Parties in high-value disputes should anticipate and budget for parallel setting-aside and enforcement proceedings, which can proceed on different timelines with potentially different outcomes.

The Singapore High Court's decision underscores a fundamental tenet of international arbitration: while the seat court plays a critical supervisory role, it cannot dictate enforcement outcomes beyond its jurisdiction. Parties must be prepared to navigate parallel proceedings and respect the autonomy of foreign enforcement courts, even in the face of ongoing challenges at the seat. This case serves as a cautionary tale for award debtors seeking global relief and a reaffirmation of the New York Convention's framework for award enforcement.

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