INTRODUCTION

1.The enforcement of foreign arbitral awards is a cornerstone of international commercial arbitration. It is governed by the New York Convention, which ensures the recognition and enforcement of such awards across jurisdictions. However, as the recent Singapore case of Wuhu Ruyi Xinbo Investment v Shandong Ruyi Technology^[1] demonstrates, the process is not without challenges, especially when procedural orders like “unless orders” come into play.

2.This case delves into the intersection of procedural discipline and international arbitration enforcement, raising significant questions about the consequences of non-compliance with court orders. Specifically, it examines whether an “unless order” – a court’s ultimate tool to compel compliance – should take effect when breached, and whether the New York Convention restricts the court’s authority to enforce such orders.

3.The case presents a compelling narrative of an award creditor’s attempt to enforce a foreign arbitral award in Singapore, the award debtor’s resistance, and the courts’ careful balancing of procedural rigour with principles of proportionality and fairness. By revisiting the role of “unless” orders and the application of the Rules of Court 2021 (“ROC 2021”), this judgment offers insights into the procedural frameworks underpinning arbitration enforcement in Singapore.

BACKGROUND

Parties and the Dispute

4.The dispute between the parties revolves around their competing claims to shares in SMCP SA (“SMCP”), a company incorporated in Luxembourg. The claimant, Wuhu Ruyi Xinbo Investment Partnership (Ltd Partnership) (“Xinbo”), asserts its rights to these shares based on a tripartite agreement dated 25 July 2018 (“Guarantee”), under which the second respondent, European Topsoho S.àr.l. (“ETS”), pledged 40 million shares in SMCP (comprising its entire holding) as security for a debt owed by the first respondent, Shandong Ruyi Technology Group Co, Ltd (“Ruyi”), to Xinbo.

5.Unbeknownst to Xinbo, ETS had already pledged 28 million of these shares (“Pledged Shares”) to secure the issuance of bonds (“Bonds”). When ETS defaulted on the Bonds, the bond trustee (“Trustee”), took possession of the Pledged Shares in October 2021. Upon learning of this double pledge, Xinbo acted to protect its remaining interests, issuing notices to secure the transfer of the remaining 12 million shares (“Remaining Shares”) to its nominee. This transfer was completed under a prior share sale agreement.

6.Meanwhile, the Trustee initiated enforcement actions, including proceedings in the English courts and a bankruptcy petition in Luxembourg against ETS. The Luxembourg courts declared ETS bankrupt in February 2023, leading to the appointment of a curator to manage ETS’s affairs (“Curator”).^[2]

7.Amidst these developments, Xinbo initiated arbitration proceedings on 18 November 2022 to address its rights to the Remaining Shares under the Guarantee. This arbitration resulted in an award in Xinbo’s favour (“Award”), which is the subject of the enforcement proceedings in Singapore.

The Unless Order

8.Xinbo initiated proceedings to enforce the Award, granted ex parte, which ETS sought to set aside. ETS through its Curator alleging that, inter alia, the Arbitration and Award were fabricated to unjustly prioritise Xinbo over ETS’s other creditors during its liquidation, particularly by granting Xinbo rights to the Remaining Shares. The Curator also noted a lack of internal documentation within ETS to corroborate Xinbo’s claims regarding the Arbitration or related agreements.

9.To address these alleged gaps, ETS sought the production of documents, which was granted (“Production Order”).

10.When ETS found Xinbo’s compliance with the Production Order inadequate, it requested an unless order, which was also granted (“Unless Order”). The Unless Order stipulated that failure by Xinbo to fully comply with the Production Order would result in the setting aside of enforcement order. Notably, Xinbo did not appeal against the Unless Order’s imposition.

11.ETS disputed Xinbo’s compliance with the Unless Order, seeking enforcement of the Unless Order’s consequences. The Assistant Registrar (“AR”) determined that Xinbo breached the Unless Order, leading to the imposition of its stipulated consequences. In doing so, the AR held that enforcing the Unless Order, even if it disrupted the enforcement of the Award, was consistent with the principle of minimal curial intervention and the New York Convention. The AR clarified that enforcing procedural orders does not equate to resisting an award under the New York Convention or the International Arbitration Act (“IAA”), as no review of the Award’s merits was involved. The court’s case management powers under ROC 2021 remain intact in arbitration cases, ensuring procedural compliance without undermining arbitration principles.

12.Subsequently, this decision became the subject-matter of Xinbo’s appeal before the High Court of the Republic of Singapore (“SGHC”).

THE SINGAPORE HIGH COURT’S DECISION

13.Xinbo’s position at the stage of appeal argued that enforcing the sanctions in the Unless Order, i.e., striking out its enforcement application and discharging the earlier enforcement order, contravened the pro-enforcement regime of the New York Convention and s. 31 of the IAA by creating a de facto new ground for refusing enforcement of arbitral awards. Xinbo contended that the sanctions were disproportionate, suggesting alternative remedies such as adverse inferences or cost orders. In contrast, ETS maintained that Xinbo’s non-compliance with the Unless Order, including inadequate explanations for missing documents and failure to permit inspection, justified the sanctions. ETS argued that enforcing the Unless Order did not violate the New York Convention, the IAA, or Singapore’s principle of minimal curial intervention, as the sanctions addressed procedural misconduct, not the merits of the award.

14.The court first determined that Xinbo had breached the Unless Order by failing to produce documents and adequately explain their absence, applying the disclosure principles under the ROC 2021. It emphasised that affidavits in response to production orders must address all relevant documents, include specific statements, and be unequivocal. The court found it “plain and obvious” that Xinbo had failed to meet these standards. On the effect of the Unless Order, the court reaffirmed that such orders are “self-executing”, taking automatic effect upon breach, with proportionality assumed given the prior non-compliance by the defaulting party. Proportionality would only be reassessed in the case of trivial breaches or material changes in circumstances, neither of which applied to Xinbo.

15.While the SGHC addressed procedural breaches, the key issue considered for the purpose of this article was whether the sanctions should take effect in light of the New York Convention’s pro-enforcement framework. The court rejected Xinbo’s argument that enforcing the Unless Order breached the New York Convention or the principle of minimal curial intervention, providing a detailed analysis of the interplay between domestic procedural rules and international enforcement obligations.

The New York Convention and Procedural Rules

16.Xinbo’s argument rested on the premise that striking out an enforcement application for non-compliance with an Unless Order violated Article V of the New York Convention, which provides exhaustive grounds for refusing enforcement. The SGHC highlighted the normative principle that any party invoking a Contracting State’s jurisdiction must comply with its procedural rules. Article III of the New York Convention explicitly allows enforcement to be subject to the procedural rules of the enforcing jurisdiction, provided such rules are non-discriminatory and equally applied to domestic and Convention awards. The Unless Order did not impose more onerous conditions on Convention awards than on domestic awards. Instead, it aligned with standard procedural safeguards, such as disclosure obligations and sanctions for non-compliance.

Precedents Supporting Procedural Sanctions

17.The SGHC drew heavily from precedents, particularly the English decision in Diag Human v Czech Republic^[3] (“Diag Human”). In that case, the English High Court upheld the imposition of procedural conditions, including Unless Orders, even in the context of enforcing New York Convention awards. The court clarified that procedural sanctions, such as dismissal of enforcement proceedings for non-compliance, do not constitute a refusal of enforcement under Article V. Instead, they represent legitimate enforcement mechanisms allowed under Article III.

18.This precedent was contrasted with Gater Assets v Naftogaz Ukrainiy^[4] (“Gater Assets”), where the English Court of Appeal expressed reservations about procedural sanctions that could practically impede enforcement. Rix LJ’s obiter comments in Gater Assets suggested that procedural requirements as a condition for enforcement might undermine the Convention’s pro-enforcement spirit. In a separate judgment, Buxton LJ observed that Article III inherently allows for procedural compliance as a condition for enforcement. This was subsequently following in Diag Human.

19.The SGHC favoured the reasoning in Diag Human, noting that Article III explicitly subjects enforcement to domestic procedural rules. The focus, according to the court, should be on whether the procedural rules are applied uniformly and fairly, not whether they lead to practical difficulties for the award creditor. The SGHC found this interpretation more aligned with the Convention’s structure, affirming that procedural compliance is a legitimate expectation when a party invokes a state’s jurisdiction to enforce an award.

Reconciling Pro-Enforcement Policy and Domestic Procedural Rules

20.Xinbo also invoked Singapore’s pro-enforcement policy, arguing that the striking out of an enforcement application undermined the Convention’s goal of making arbitral awards readily enforceable. However, the court clarified that pro-enforcement does not equate to absolute enforcement and that such a policy does not grant an award creditor immunity from complying with procedural orders or the consequences of breaching them.

21.Breaching an unless order, especially in a contumelious or intentional manner, undermines the court’s authority and the integrity of the enforcement process. The policy of pro-enforcement must coexist with the enforcement court’s responsibility to uphold its procedural rules and maintain the due administration of justice. The Unless Order was not an arbitrary imposition but a tool to compel compliance with legitimate procedural requirements, reinforcing the integrity of the enforcement process.

The Principle of Minimal Curial Intervention

22.The SGHC also rejected Xinbo’s reliance on the principle of minimal curial intervention. This principle aims to preserve the autonomy of the arbitral process and limit judicial interference in arbitration. The SGHC cited Soh Beng Tee & Co v Fairmount Development^[5], which elucidated that minimal curial intervention respects the finality of arbitration while acknowledging the limited recourse parties have to courts. However, procedural sanctions during enforcement are a matter entirely within the court’s domain and do not infringe upon the arbitral tribunal’s jurisdiction or autonomy.

23.Minimal curial intervention operates to prevent courts from re-litigating the merits of arbitral awards or interfering with the arbitration process. It does not, however, shield parties from complying with procedural rules during enforcement proceedings. The SGHC emphasised that the principle does not preclude courts from imposing sanctions for non-compliance with orders made during enforcement proceedings. Such sanctions relate to the court’s authority and procedural justice rather than the arbitral process.

CONCLUSION

24.The SGHC’s decision underscores the nuanced relationship between the New York Convention’s pro-enforcement objectives and the procedural sovereignty of Contracting States. While the New York Convention aims to facilitate the recognition and enforcement of arbitral awards, it explicitly allows enforcement to be subject to domestic procedural rules, provided they are non-discriminatory.

25.Xinbo’s attempts to characterise the Unless Order as a disguised refusal of enforcement under Article V were rejected. Instead, it affirmed that procedural compliance is a legitimate condition for invoking the jurisdiction of an enforcement court. Pro-enforcement and minimal curial intervention do not operate in isolation but must be balanced with the court’s responsibility to uphold procedural fairness and its own authority.

26.This judgment reinforces the principle that the New York Convention’s objectives are not undermined by legitimate procedural safeguards, ensuring that arbitration remains a robust yet procedurally accountable form of dispute resolution. However, this also introduces a grey area, as procedural requirements and their treatment may vary across jurisdictions, depending on how courts prioritise procedural compliance versus the New York Convention’s pro-enforcement goals, leaving room for divergence and debate.

Author: Natasha Kavalakkat