The dispute was in relation to repayment of a loan under a Facility Agreement between DBP (the “Lender”) and DBO (the “Borrower”). The Borrower argued that they were not obliged to repay the loan because the Facility Agreement had been frustrated in the context of the COVID-19 pandemic.
The Facility Agreement provided for arbitration in Singapore with the SIAC Rules to apply. The Lender commenced arbitration proceedings against the Borrower under the SIAC Rules on December 6, 2021.
On October 18, 2022, the Lender brought an early dismissal application under Rule 29.1 of the SIAC Rules, seeking an early dismissal of the Borrower’s defence that the Facility Agreement had been discharged by frustration.
At the hearing of the early dismissal application, the Borrower sought to introduce a fresh pleading that there was a ‘collateral contract’ between the parties to the effect that the funds for repaying the loan would come only from certain specific income source.
The Tribunal permitted the Borrower to introduce the fresh point on the existence of a ‘collateral contract’ in their pleading, but ultimately found that the ‘collateral contract’ could not be made out on the facts. In the circumstances, the Tribunal found that the Facility Agreement had not been discharged by frustration and on January 30, 2023 issued a Partial Award in favour of the Lender.
On March 20, 2023, the Borrower applied to the Singapore High Court to have the Partial Award set aside. They alleged that the Tribunal had breached natural justice and deprived them of their right to present their case by summarily dismissing their case when the existence of the collateral contract was a “critical disputed fact.”
Source: Barandbench
