Jurisdiction in International Commercial Arbitration

8/19/2019 Jurisdiction in International Commercial Arbitration

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L1020-C

THE 8TH

LAWASIA INTERNATIONAL MOOT COURT, 2013

IN THE KUALA LUMPUR REGIONAL ARBITRATION CENTRE

AT SINGAPORE

BETWEEN

JACK SMALL LIMITED

Claimant

AND

TAN SEN IMPORTS

Respondent

--MEMORIAL FOR THE CLAIMANT--


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I


TABLE OF CONTENTS

INDEX OF AUTHORITIES ............................................................................................... VI

STATEMENT OF JURISDICTION ................................................................................. XIII

QUESTIONS PRESENTED ............................................................................................ XIV

STATEMENT OF FACTS .................................................................................................XV

SUMMARY OF PLEADINGS ...................................................................................... XVIII

PLEADINGS ........................................................................................................................ 1

I.

THE ARBITRAL TRIBUNAL HAS THE AUTHORITY TO ADJUDICATE

MATTERS PERTAINING TO UNFAIR TRADE PRACTICES. .................... ... 1

A. The Law governing the Arbitration Agreement is the Law of Malaysia. ................. 1

i. Institutional rules must be considered in deciding the Lex Arbitri. ........................ 1

ii. The Law governing the Arbitration Agreement shall be the law of the Seat of

Arbitration. ................................................................................................................ 2

iii. The Arbitration agreement will not be governed by the Law of the Place of

Arbitration. ................................................................................................................ 2

B. The present matter is arbitrable before the Arbitral Tribunal even in the absence of

a private right of action. ................................................................................................. 3

i. The Arbitrability of the dispute must be decided in accordance with the Law of

the Seat – Malaysia. ................................................................................................... 3

ii. The Arbitrability of the dispute is not barred under Malaysian Law. ................... 4


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II


a. Arbitrability of the matter is not barred under the Arbitration Act, 2005. ......... 4

b. Arbitrability of the matter is unaffected by the public policy of Malaysia. ....... 4

iii. Disputes pertaining to Misleading & Deceptive Advertising and Consumer

Protection are arbitrable. ............................................................................................ 4

II.

THE RESPONDENT HAS ENGAGED IN UNFAIR TRADE PRACTICES. ........ 6

A. Singapore Law governs the subject matter of the dispute between the parties. ........ 6

i. The MAA requires the application of the Conflict of Laws Rules. ..................... ... 6

ii. Singapore Law must be applied to the subject matter of the dispute according to

the Conflict of Laws Rules......................................................................................... 7

B. The Laws of Singapore pertaining to Protection of Endangered Species have been

violated by the Respondent. ........................................................................................... 7

i. The Respondent is in violation of the Convention for International Trade in

Endangered Species (“CITES”). ................................................................................ 8

ii. The Respondent is in violation of the Endangered Species (Import and Export)

Act, 2008 (“Endangered Species Act”). ..................................................................... 8

C. The Laws of Singapore pertaining to Advertising have been violated by the

Respondent. ................................................................................................................... 9

i. The Respondent has violated the Singapore Code of Advertising Practice, 2008

(“SCAP”). ................................................................................................................. 9

a. The principles derived from the SCAP are applicable to the present matter. .... 9


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III


b. The Respondent has engaged in deceptive and misleading advertising under

SCAP. ................................................................................................................. 10

ii. The Respondent has violated the principles of Consumer Protection (Fair

Trading) Act, 2004 (“Consumer Protection Act”) .................................................... 11

a. The principles derived from the Consumer Protection Act are applicable in the

present matter. ......................................... ........................................ .................... 11

b. The advertisement was misleading and deceptive under the Consumer

Protection Act. ..................................................................................................... 11

iii. The intention of the Respondent is irrelevant to the present matter. .................. 12

iv. The Respondent’s knowledge of the misleading element is irrelevant in the

present matter. ........................................ ......................................... ........................ 13

III.

THE KLRCA HAS THE AUTHORITY TO ESTABLISH PENALTIES FOR

FUTURE SALE OF MISLABELED GOODS .................................................... 14

A. The KLRCA has broad powers to take punitive measures. ........... ........................ 14

i. The travaux preparatoires give arbitrators maximum freedom. ........................... 14

ii. The Arbitral Tribunal is empowered by the lex arbitri. ..................................... 14

iii. The Arbitral Tribunal has inherent powers to grant sanction. ........................... 15

iv. Article 14 of the Fast Track Rules gives the tribunal wide discretion. ............... 15

B. Monetary sanctions in the form of fines can have a stronger deterrence effect in

ensuring expeditious proceedings. ............................................................................... 16


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IV. THE KLRCA HAS THE AUTHORITY TO GRANT A PERMANENT

INJUNCTION ENFORCEABLE IN SINGAPORE. .......................................... 17

A. A future permanent injunction can be granted by the KLRCA. ............................. 17

i. The express mention of power to grant injunctive relief is not necessary. .......... . 17

ii. The KLRCA can grant a permenenat injunction….. ……………................18

iii. The KLRCA has inherent powers to grant injunctory relief. ........... ................... 18

iv. The KLRCA can award future injunctory relief. ...................... ........................ 19

v. The KL Rules incorporate Art. 26 of the UNCITRAL Rules and thereby

envisage greater flexibility for interim relief. ........................................................... 19

a. The UNCITRAL Rules differ from the UNCITRAL Model Law. .................. 20

b. The Rules do not limit the type of provisional measures. .............................. . 20

c. The Rules do not elucidate an exhaustive list of measures. ............................ 20

d. The Rules broaden the range of actions to be refrained from. ........................ 20

B. A permanent injunction granted by the KLRCA is an award enforceable by courts

in Singapore. ............................................................................................................... 21

i. Injunctions constitute “awards” under the KLRCA Rules................................... 21

ii. Awards granting injunctions are enforceable. .......... ......................................... . 21

iii. Arguendo: the permanent injunction is a “ partial award ”. ................................ 22

iv. Foreign awards can be enforced in Singapore............. ...................................... 22


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CONCLUSION AND PRAYER FOR RELIEF ................................................................... 23


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VI


INDEX OF AUTHORITIES

CASES

Adamas Mgt & Services Inc. v. Aurado Energy Inc., XXX Y.B Comm. Arb. 479 (New

Brunswick WB 2004) (2005) ............................... ........................................ .............. 18, 22

Anderman/Smith Operating Co. v. Tenn. Gas Pipeline Co., 918 F.2d 1215 (5th

Cir. 1990)... 20

Arrowhead Global Solutions Inc. v. Datapath Inc. 166 Fed.Appx. 39, 41 (4th Cir. 2006). .... 22

Bonython v. Commonwealth of Australia, [1951] AC 201, 219 (Privy Council on appeal from

Australia). ......................................................................................................................... 8

Bundesgerichtshof (German Supreme Court), Gewerblicher Rechtsschutz und

Urheberrecht, 1982, 374. ................................................................................................ 13

Comandate Marine Corp v. Pan Australia Shipping Pty Ltd ., [2006] FCAFC 192, 200. ........ 3

Comandate Marine Corp v. Pan Australia Shipping Pty Ltd ., [2006] FCAFC 192................. 6

Enron Corp. and Ponderosa Assets LP v. Argentine Republic, Decision on Jurisdiction,

ICSID Case No. ARB/01/3 (14th

Jan. 2004) ¶ 81. ............................................................ 19

Findlay v. Couldwell and Bcywiood Motors, (1976) 5 W.W.R. 340 at 345 (Canada). .......... 13

Freydberg Bros. Inc. v. Corey, 31 N.Y.S.2d 10 (N.Y.S.Ct 1941). ..................... ................... 18

Global Sportsman v. Mirror , (1984) 55 A.L.R. 25 at 30 (Australia) .................................... 13

Hamlyn & Co. v. Talisker Distillery, [1894] A.C. 202, 208 (House of Lords). .................... ... 2

IBM Australia v. National Distribution Services, (1991) 22 NSWLR 466. ............................ 5

ICC Case No. 6162 (1990), XVII Y.B. Comm. Arb. 153, 158 (1992). ............................... ... 4


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Inter Chem Asia 2000 PTE Ltd v. Oceana Petrochem, 373 F.Supp.2d 340 (S.D.N.Y. 2005) ¶

933 .................................................................................................................................. 15

Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046, 1049 (6th Cir. 1984). .... 18

Judgment of 26 May 1994, XXIII Y.B. Comm. Arb. 754, 757 (Bezirksgericht Affoltern am

Albis 1994 (1998) ............................................................................................................. 2

Judgment of 28 October 1997, Société Procédés de préfabrication pour le béton v. Libye,

1998 Rev. arb. 399 (Paris Cour d ’appel). ........................................................................... 3

Lesotho Highlands Development Authority v. Impregilo Spa, [2006] 1 A.C. 221 (House of

Lords). .............................................................................................................................. 2

Lloyd ’ s London v. Argonaut Ins., 264 F.Supp.2d 926,944 (N.D. Cal. 2003). ...................... . 17

LV Fiannce Group Ltd. v. IPOC Int ’ l Growth Fund Ltd. [2006] Bda LR 69 (Bermuda

Commercial Court) .......................................................................................................... 22

Minoutsi Shipping Corp v. Trans Continental Shipping Services (Pte) Ltd, [1971] SGHC 3 .. 2

NSW Racing v. T.A.B, [2002] N.S.W.S.C 742 ¶26 (New South Wales Supreme Court). ...... 18

P.T. Pukuafu Indah and Ors. v. Newmont Indonesia Ltd. and Anr., [2012] SGHC 187. ....... 23

Pac. Reins v. Ohio Reins, 9.35 F.2d 1019 (1991). ................................................................ 22

Parkdale v. PUXU (1982) 42 A.L.R. 1 at 6 (Australia). ............................... ........................ 13

Prima Paint Corporation v. Flood & Conklin Manufacturing Company, 18 L.Ed 2d 1270. ... 5

Prosecutor v. Tihomic Blaskic, IT-95-1 4-AR 108 bis (1997), ¶33. ..................................... 17

R. v. International Trustee for the Protection of Bondholders, [1937] A.C. 500, 529. ............ 2


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Re An Arbitration Between Hainan Machinery Import and Export Corp and Donald &

McArthy Pte Ltd., [1995] SGHC 232. ................................................................................ 5

Reed & Martin Inc. v. Westinghouse Electric Corporation, 439 F.2d 1268, 1273 (2nd Cir.

1971). ................................................................................................................................ 1

ReliaStar Life Insurance Company of New York v. EMC National Life Company. Docket No.

07-0828-cv, 2009 WL 941173 (2d Cir. April 9, 2009) ........... ......................................... . 16

Robson v. Chrysler Canada Ltd. [2001] B.C.T.C. 40 (Canada). ................... ........................ 12

Rushak v. Henneken, (1991) 84 D.L.R (4th) 87 (Canada). .................................................... 14

Steven v. Coudert Brothers, 662 N.Y.S.2d 42 (N.Y. App. Div. 1997). ................................ ... 1

Techno-Impex v. Gebr. Van Weelde Scheepvaartkantoor B, [1981] QB 648. ...................... . 16

Vita Foods Products Inc. v. Unus Shipping Co. Ltd., [1939] A.C. 277, 299 (P.C.). ................ 2

Whitworth Street Estates (Manchester) Ltd. v. James Milller and Partners Ltd. [1970] AC

583, 603. ........................................................................................................................... 8

Wilkinson v. Katies, (1986) 67 A.L.R 137 (Australia). .......... ............................................... 14

Y.K. Fung Securities Sdn Bhd v. James Cape (Far East) Ltd , 3 [1997] 2 MLJ 621. ............... 8

AWARDS

Award of 22 April 2008, ICSID, ¶¶726-730. ....................................................................... 16

Award of 31 March 1986, 2 ICSID Rep. 343, 378. .............................................................. 16

Rainbow Warrior (Fr. V. N.Z), R.I.A.A., Vol. XX, 1990, P.217, at 270, ¶ 114 ................... . 19

Trail Smelter Case, (U.S. v. Canada), 3 R.I.A.A. 1905...........................................................20


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STATUTES/CONVENTIONS

Consumer Protection (Fair Trading) Act, 2004. ............................................................. 12, 13

Convention for International Trade in Endangered Species, 2008. .................... ............. 23, 33

Endangered Species (Import and Export) Act, 2008. ....................................................... 9, 10

International Arbitration Act (Singapore). ........................................................................... 23

Malaysian Arbitration Act, 2005. ............................................................................... 7, 15, 19

Singapore Code of Advertising Practice, 2008. .................................................................... 11

REPORTS

Singapore Report for ACCP (ASEAN Committee on Consumer Protection), June 2008. ..... 11

UNCITRAL, Report of Working Group II (Arbitration and Conciliation) on the Work of its

Fiftieth Session, ¶ 92, delivered to the General Assembly, U.N. Doc. A/CN.9/669 (March

9, 2009). .......................................................................................................................... 21


Forty-Fifth Session, ¶¶17-19, delivered to the General Assembly, U.N. Doc. A/CN.9/614

(Oct. 5, 2006) ¶51............................................................................................................ 20


Forty-Fifth Session, ¶¶17-19, delivered to the General Assembly, U.N. Doc. A/CN.9/614

(Oct. 5, 2006). ................................................................................................................. 20

UNCITRAL, Settlement of Commercial Disputes: Revision of the UNCITRAL Arbitration

Rules, Note by the Secretariat, ¶ 13, art. 26(2), delivered to Working Group II (Arbitration


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and Conciliation), U.N. Doc. A/CN.9/WG.II/WP.151/Add.1 (Aug. 6, 2008) with 2010

Arbitration Rules, Art. 26(2)............................................................................................ 21

United Nations Commission on International Trade Law, Summary Record of the 10th

Meeting of the Committee of the Whole(II) (UN Doc A/CN.9/9/C.2/SR.10) ¶59. ........... . 15

RULES

Kuala Lumpur Regional Centre for Arbitration Fast Track Rules, (2nd Edition, 2012)... passim

UNCITRAL Arbitration Rules, 2011. .................................................................................. 15

BOOKS

Brown, Chester, A Common Law of International Adjudication New York, (Oxford University

Press 2007). ..................................................................................................................... 17

Claudia Alfons, Recognition and Enforcement of Annulled Foreign Arbitral Awards,

(Frankfurt: Peterl Lang, 2010) ........................................................................................... 5

Gary B. Born, International Commercial Arbitration, Vol. I (3rd ed., The Hague, Kluwer

Law International, 2009) ................................................................................................... 1

Gary B. Born, International Commercial Arbitration, Vol. II (3rd ed., The Hague, Kluwer

Law International, 2009) ................................................................................................... 7

Schreuer, Christopher The ICSID Convention: A Commentary (Cambridge University Press

2001) ............................................................................................................................... 17

Trevor Cook and Alejandro I. Garcia, International Intellectual Property Arbitration, 270

(Kluwer Law International 2010).............................................................................................19


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ARTICLES

Antoine Kirry, Arbitrability: Current Trends in Europe, 12 Arb. Int. 4, (1996), P.379. .......... 4

Carlos Alfaro & Flavia Guimarey, Who Should Determine Arbitrability? Arbitration in a

Changing Economic and Political Environment , Arb. Int, 1996, Vol. 12 No. 4, 416-420. .. 5

Gaeta, P. “Inherent Powers of International Courts and Tribunals” in Vohrah, L.C. et al (eds)

Man’s Inhumanity to Man: Essays on International Law in Honour of Antonio Cassese

(Kluwer Law International 2003) 370-71 [“Gaeta”] ......................................................... 17

Hanotiau, Bernard, Caprasse, Oliver, “Public Policy in International Commercial

Arbitration”, in Gaillard & Di Pietro (eds.), Enforcement of Arbitration Agreements and

International Arbitral Awards: The New York Convention in Practice, (Cameron May,

2008), P.819. ..................................................................................................................... 5

J. Edward Russo, Barbara L. Metcalf and Debra Stephens, Identifying Misleading

Advertisement , Journal of Consumer Research, Vol. 8, No. 2 (Sep., 1981), pP.119-131. .. 13

Margaret Griffiths, Unfair Commercial Practices - A New Regime, Comms. L. 2007, 12(6),

196-204. .......................................................................................................................... 11

Neil, Philip D., The Power of Arbitrators to Award Monetary Sanctions for Discovery Abuse

(Nov. 2005/ Jan. 2006) 60 Disp. Res .J. 60, 3. ................................................................. 15

Stavros L. Brekoulakis, On Arbitrability: Persisting Misconceptions and New Areas of

Concern in Mistelis, Loukas, A & Stavros L. Brekoulakis, Arbitrability: International &

Comparative Perspectives (The Hauge, Kluwer Law International, 2009), P.32. ............... 4


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Yves Fortier, Arbitrability of Disputes in Gerald Aksen et al., Global Reflections on

International Law, Commerce and Dispute Resolution: Liber Amicorum in honour of

Robert Briner (Paris, ICC Publishing, 2005) P.273 ............................................................ 5


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STATEMENT OF JURISDICTION

Jack Small Limited (“

Claimant”

) and Tan Sen Imports (“

Respondent”

) jointly submit the

present dispute to the Kuala Lumpur Regional Centre for Arbitration (“KLRCA”), Malaysia,

according to the KLRCA Fast Track Rules (“KLRCA Rules”).

The dispute includes issues on the Tribunal’s jurisdiction. Pursuant to Article 6 of the

KLRCA Rules, the Tribunal may elect to rule on its jurisdiction as a preliminary question or

in an award on its merits. Both parties shall accept the judgment of the Tribunal as final and

binding and execute it in good faith in its entirety.


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QUESTIONS PRESENTED

I.

WHETHER THE

ARBITRATION

TRIBUNAL HAS THE AUTHORITY TO ADJUDICATE

MATTERS PERTAINING TO UNFAIR TRADE PRACTICES?

II. WHETHER THE R ESPONDENT HAS ENGAGED IN UNFAIR TRADE PRACTICES?

III. WHETHER THE KLRCA HAS THE AUTHORITY TO ESTABLISH PENALTIES FOR

FUTURE SALE OF MISLABELLED GOODS?

IV.

WHETHER THE KLRCA HAS THE AUTHORITY TO GRANT A PERMANENT INJUNCTION

ENFORCEABLE IN SINGAPORE?


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STATEMENT OF FACTS

BACKGROUND

There is a business dispute between two parties, Jack Small Ltd. (hereinafter CLAIMANT) and

Tan Sen Imports (hereinafter R ESPONDENT) who own and operate Singapore departmental

stores selling garmensts, including fur garments. There are two types of fur sold in the

market, real fur and faux fur. Faux fur is synthetically designed to resemble real fur. It is an

animal friendly alternative to real fur. In some countries, it has been seen that real fur is

promoted as faux fur.

The claimant complained to the Enforcement Support Office of the Convention on

International Trade in Endangered Species (CITES) that the Respondent was selling real fur

products made from the fur of an endangered species, the ‘Asian Golden Cat’. Trade or sale

in the fur of any endangered species listed under the CITES is prohibited. The Asian Golden

Cat is listed under Appendix I of the CITES and as a ‘ Near Threatened ’ species by the IUCN.

DISPUTE

Upon investigation, it was found that the Respondent was indeed selling real fur of the Asian

Golden Cat, not faux fur, and advertising it as “having the touch, feel and smell of real fur ”.

Up to 8 of these small cats are required to make one single fur coat.

The Respondent claims to have acquired these products from China Fur, who represented the

fur as being made from the pelts of “Asian cats”. The samples were shown to the Respondent

prior to importing. The labels on these goods were designed and supplied by the Respondent.

Unable to resolve their dispute, the parties agreed to submit their dispute to binding

arbitration in accordance with the rules for arbitration of the Kuala Lumpur Regional Centre

for Arbitration (hereinafter “KL Rules”), namely the “Fast Track ” rules. All hearings and


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proceedings were to be held in Singapore. The parties did not decide the applicable law to

apply in resolving the dispute.

CLAIMS AND COUNTER -CLAIMS

Around 60% of the claimant’s total sales include fur products, which amount to over 90% of

its profits. Since the Respondent started to sell real fur of the Asian Golden Cat, the

claimant’s total sales reduced by 40% and fur products sale by 70%. The claimant asserted

before the Tribunal that the Respondent has engaged in unfair practices by violating the

Endangered Species (Import and Export) Act and CITES and not disclosing to the public that

the fur was made of endangered species.

It was contended that the Respondent was engaging in deceptive and misleading advertising

by advertising the fur products as “having the touch, feel and smell of real fur ”.

Further, the claimant requested an order to refrain the Respondent from carrying out,

promoting, and/or selling the fur of any endangered species. A penalty of 500 USD was

claimed for each item containing the fur of an endangered species, and this amount would be

donated to The Nature Society (Singapore).

The Respondent contended that it had no knowledge of the fur being real, and that buyers too

could not generally tell the difference between real and faux fur. It stated that primarily,

neither the Endangered Species (Import and Export) Act, nor CITES allows a private right of

action between businesses for the violation of their provisions. Only the Government has the

authority to enforce its laws and treaty obligations. Further, it was asserted that the Arbitral

Tribunal lacks the authority to award a “ penalty” for the future sale of mislabelled goods. The

Respondent held that the under the KL rules (which follows Article 26 of UNCITRAL

Arbitration Rules) the Arbitral Tribunal does not possess the authority to impose future


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injunctive relief. Under Article 26 only an interim relief can be claimed, not a permanent

injunction and that a Singapore Court would not enforce such an order.


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SUMMARY OF PLEADINGS

I. THE ARBITRAL TRIBUNAL HAS THE AUTHORITY TO ADJUDICATE MATTERS

PERTAINING TO UNFAIR TRADE PRACTICES.

By virtue of the KLRCA Fast Track Arbitration Rules, 2012, since Malaysia has been

designated as the seat of arbitration, the law governing the arbitration agreement would be the

laws of Malaysia. Therefore, since disputes pertaining to the practice of unfair trade practices

are arbitrable under Malaysian Arbitration Law, the Arbitral Tribunal can decide the matter

pertaining to the Respondent’s engagement in unfair trade practices.

II.

THE R ESPONDENT HAS ENGAGED IN UNFAIR TRADE PRACTICES.

By virtue of the application of the Conflict of Laws Rules, the laws of Singapore govern the

subject matter of the dispute between the parties before the Arbitral Tribunal. It is therefore

contended that the Respondent has violated the laws of Singapore pertaining to prevention in

trade and sale of endangered species. Further, the Respondent has engaged misleading and

deceptive advertising of his products, thereby amounting to unfair trade practices.

III. THE KLRCA HAS THE AUTHORITY TO ESTABLISH PENALTIES FOR FUTURE SALE OF

MISLABELLED GOODS.

The KLRCA has the authority to establish penalties because first it has broad powers to take

punitive measures. They stem from the travaux preparatoires and the lex arbitri. Moreover, it

has inherent powers to grant sanction. Further, Article 14 of the Fast Track Rules gives the

tribunal wide discretion. Second , monetary sanctions in the form of fines can have a stronger

deterrence effect in ensuring expeditious proceedings.


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IV. THE KLRCA HAS THE AUTHORITY TO GRANT A PERMANENT INJUNCTION

ENFORCEABLE IN SINGAPORE.

The KLRCA is authorized to grant a future permanent injunction because injunctions

constitute awards. Additionally, awards granting injunctions are enforceable. Arguendo, the

permanent injunction is a “ partial award ”. Further, foreign awards can be enforced in

Singapore. In any case, a permanent injunction granted by the KLRCA is an award, which is

enforceable by courts in Singapore.


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PLEADINGS

I. THE ARBITRAL TRIBUNAL HAS THE AUTHORITY TO ADJUDICATE

MATTERS PERTAINING TO UNFAIR TRADE PRACTICES.

1. Since the law governing the arbitration agreement is that of Malaysia [A], and such law

envisages the arbitrability of the present matter [B], the Arbitral Tribunal can decide on

the Respondent’s engagement in unfair trade practices.

A. THE LAW GOVERNING THE ARBITRATION AGREEMENT IS THE LAW OF MALAYSIA.

2.

In order to determine the law governing the arbitration agreement, institutional rules

should be considered [i]. Furthermore, the lex arbitri shall be governed by the Law of the

Seat of Arbitration [ii] and not the Place of Arbitration [iii].

i.

Institutional rules must be considered in deciding the Lex Arbitri.

3. Institutional arbitration rules may be resorted to for the selection of the seat of arbitration,

when the parties have not agreed upon the place where the arbitration is to be held. 1 In the

present case, the parties have agreed to arbitrate their dispute pursuant to the rules

prescribed under the KLRCA Fast Track Rules, 2012.2 Therefore, it is contended that the

dispute must be referred to the same for resolution under such rules. 3 Furthermore, when

the rules authorize the KLRCA to designate the arbitral seat as Malaysia, 4 challenges to

the institution’s selection should not be furthered.5

1 Gary B. Born, International Commercial Arbitration, Vol. I (3rd ed., The Hague, Kluwer Law International,

2009), P.1679 [hereinafter “Gary Born I”].2 Proposition, P.3.3 Steven v. Coudert Brothers, 662 N.Y.S.2d 42 (N.Y. App. Div. 1997).

4 Art. 6(2), Kuala Lumpur Regional Centre for Arbitration Fast Track Rules, (2nd Edition, 2012) [hereinafter“Fast Track Rules”].5 Reed & Martin Inc. v. Westinghouse Electric Corporation, 439 F.2d 1268, 1273 (2

nd Cir. 1971).


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ii.

The Law governing the Arbitration Agreement shall be the Law of the

Seat of Arbitration.

4. It is a fundamental principle of the rule of conflict of laws that intention is the general test

of what law is to apply.6

In the absence of an express choice-of-law provision regarding

the arbitration agreement, the arbitration clause must be interpreted according to the law of

the seat of the Arbitral Tribunal.7 By seating the arbitration in a particular State, the parties

are regarded to have impliedly agreed that the Law of the Arbitral Seat should govern the

arbitration clause.8

5.

By virtue of the express intent of the parties to resort to the KLRCA Fast Track Rules,

2012 for the settlement of their dispute,9 the seat of the arbitration is Malaysia.10 In light of

the above, it is contended that the law governing the arbitration agreement must, by the

same reasoning, be the laws of the State of Malaysia.

iii.

The Arbitration Agreement will not be governed by the Law of the Place

of Arbitration.

6.

The arbitral seat is the “ juridical seat” of the arbitration, and therefore, the arbitral seat is

not necessarily the place where the hearings of the arbitration proceedings are held.11

Rather, it is the place where the parties have agreed upon as the “legal place of the

arbitration”.12 Since the concept of the arbitral seat is a legal construct, not a geographic or

physical location, the law applicable to the arbitration is unaffected even if arbitral

6 Vita Foods Products Inc. v. Unus Shipping Co. Ltd., [1939] A.C. 277, 299 (P.C.).

7 Judgment of 26 May 1994, XXIII Y.B. Comm. Arb. 754, 757 (Bezirksgericht Affoltern am Albis 1994 (1998);

Minoutsi Shipping Corp v. Trans Continental Shipping Services (Pte) Ltd, [1971] SGHC 3; R. v. InternationalTrustee for the Protection of Bondholders, [1937] A.C. 500, 529.8 Hamlyn & Co. v. Talisker Distillery, [1894] A.C. 202, 208 (House of Lords).9 Clarifications, First Set, P.4.

10 Art. 6(2), Fast Track Rules.11

Lesotho Highlands Development Authority v. Impregilo Spa, [2006] 1 A.C. 221 (House of Lords).12

Id.


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proceedings are physically conducted in places other than the seat of arbitration for any

reason.13

7. By providing that the arbitral proceedings shall be held in Singapore,14 the only plausible

inference is that the parties agreed for Singapore to be the “ place of arbitration” and not

the “seat of arbitration”. Therefore, although the place of arbitration, by virtue of the

arbitration agreement would be Singapore,15 it is argued that the seat of the arbitration

continues to be that of Malaysia and the laws thereof.

B.

THE PRESENT MATTER IS ARBITRABLE BEFORE THE ARBITRAL TRIBUNAL EVEN IN THE

ABSENCE OF A PRIVATE RIGHT OF ACTION.

8.

The law of the seat of arbitration, i.e., of Malaysia, is the determining factor regarding

questions of arbitrability [i], and the arbitrability of the present matter is not barred by

Malaysian law [ii]. Furthermore, matters pertaining to unfair practices and consumer

disputes are arbitrable under common law [iii]. Therefore, the present matter is arbitrable

before the Tribunal, irrespective of whether a private right of action exists or not.

i.

The Arbitrability of the dispute must be decided in accordance with the

Law of the Seat – Malaysia.

9.

It has been held that the words “capable of being settled by arbitration” or “arbitrability”

are to be understood as dealing with the question "whether the dispute is of the type that

comes properly within the domain of arbitration."16 It is internationally accepted that the

law of the seat of arbitration must be applied for the determination of the arbitrability of

the subject matter of the dispute.17 This is in furtherance of this proposition that the

13 Judgment of 28 October 1997, Société Procédés de préfabrication pour le béton v. Libye, 1998 Rev. arb. 399

(Paris Cour d ’appel).14

Proposition, P.3.15 Id. 16

Comandate Marine Corp v. Pan Australia Shipping Pty Ltd ., [2006] FCAFC 192, 200.17

ICC Case No. 6162 (1990), XVII Y.B. Comm. Arb. 153, 158 (1992).


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claimants argue that the Malaysian Arbitration Act, 2005 is applicable to the present

dispute.

ii.

The Arbitrability of the dispute is not barred under Malaysian Law.

a.

Arbitrability of the matter is not barred under the Arbitration Act, 2005.

10.

The Arbitration Act, 2005, states that “the fact that any written law confers jurisdiction in

respect of any matter on any court of law but does not refer to the determination of that

matter by arbitration shall not, by itself, indicate that a dispute about that matter is not

capable of determination by arbitration”.18 This is implicative of the fact that though a

matter may be subject to the jurisdiction of any court of law, this does not bar an Arbitral

Tribunal from exercising its jurisdiction over the same.

b.

Arbitrability of the matter is unaffected by the public policy of Malaysia.

11.

Furthermore, it has been argued that public policy, in the present day, has diminished in

relevance to the issue of arbitrability of international commercial disputes.19 It is

contended that, “relevance of public policy to the discussion of arbitrability is essentially

very limited, and therefore, the scope of inarbitrability should not be determined by

reference to public policy.”20 That being the case, even if the adjudication of the present

matter by the Arbitral Tribunal were in contravention to Malaysian public policy, the

present matter may be considered for adjudication by the Arbitral Tribunal.

iii.

Disputes pertaining to Misleading & Deceptive Advertising and

Consumer Protection are arbitrable.

12.

Judicial interpretations have held disputes pertaining to consumer protection to be

capable of settlement by arbitration pursuant to an arbitration clause that uses the words

18 §4(2), Malaysian Arbitration Act, 2005.19

Antoine Kirry, Arbitrability: Current Trends in Europe, 12 Arb. Int. 4, (1996), P.379.20 Stavros L. Brekoulakis, On Arbitrability: Persisting Misconceptions and New Areas of Concern in Mistelis,

Loukas, A & Stavros L. Brekoulakis, Arbitrability: International & Comparative Perspectives (The Hauge,Kluwer Law International, 2009), P.32.


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“related to this agreement or any breach thereof ”.21 It has also been expressly held by the

Full Court of the Federal Court of Australia that consumer protection claims under the

domestic statute were arbitrable.22 Furthermore, disputes that arise on the grounds of

misleading and deceptive conduct by parties to an arbitration agreement have also been

held to be arbitrable under various common law jurisdictions.23 By virtue of the

application of the aforementioned precedents, it is argued that matter submitted for

substantive adjudication before the Arbitral Tribunal pertains to the aforementioned

transgressions, and the present matter must also be held arbitrable.

21 supra note 24.

22 Comandate Marine Corp v. Pan Australia Shipping Pty Ltd ., [2006] FCAFC 192.23

Francis Travel Marketing v. Virgin Atlantic Airways, (1996) 39 NSWLR 160; Hi-Fert v. Kiukiang MaritimeCarriers, (1998) 159 ALR 142.


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II. THE RESPONDENT HAS ENGAGED IN UNFAIR TRADE PRACTICES.

13. The laws of Singapore govern the subject matter of the dispute between the parties to the

arbitral proceeding [A]. Furthermore, the Respondent has violated such laws pertaining

to protection of endangered species [B] and advertising [C] and therefore, unfair trade

practices have been alleged against them.

A.

SINGAPORE LAW GOVERNS THE SUBJECT MATTER OF THE DISPUTE BETWEEN THE

PARTIES.

14.

Section 30(4) of the (Malaysian) Arbitration Act, 2005 (hereinafter “MAA”) states that

the tribunal should apply the law determined by the conflict of laws rules whenever there

is no agreement relating to the choice of law [i]. Following these rules, the domestic law

of Singapore is the applicable law [ii].

i.

The MAA requires the application of the Conflict of Laws Rules.

15.

The MAA states that in the absence of an agreement deciding the law applicable, the

Arbitral Tribunal shall apply the law determined by the conflict of laws rule.24

Furthermore, they are also derived from a place, which the parties can be considered to

have impliedly regarded as acceptable.25 This is especially so where the place of

arbitration was agreed upon by the parties themselves.26 Employing the conflict rules of

the seat is certain and efficacious, avoiding the complexity and ambiguity of arbitrators

deciding between various existing conflicts rules, or even developing new ones.

24 §30(4), Malaysian Arbitration Act, 2005.

25 Gary B. Born, International Commercial Arbitration, Vol. II (3rd ed., The Hague, Kluwer Law International,2009), P.2139 [herinafter “Gary Born II”]26

Id.


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ii.

Singapore Law must be applied to the subject matter of the dispute

according to the Conflict of Laws Rules.

16. The applicable law under Malaysian conflict rules depends on express or inferred

intention of the parties.27

In the absence of intention, the applicable law is that with the

“closest and most real connection” to the transaction.28

17.

The Malaysia Court of Appeal held that the determination of the law with the “closest

and most real connection” involved consideration of several connecting factors. These

include: the place of performance, the place of contracting, the places of residence or

business of the parties, and the nature and subject matter of the contract.29 The facts in

this particular case provide no precise guidance as to the intention of the parties.30

Therefore, the closest and most real connection test should be applied. The place of

agreeing to arbitrate31 and the place of business of parties32 are both Singapore.

Furthermore, even the nature and subject matter of the contract point to Singapore Law

to govern the settlement of the dispute. The alleged false and misleading advertising and

violation of the laws of endangered species are within the territory of Singapore.33

Therefore, applying the closest and most real connection test, it is clear that the law

governing the substantive aspects of the dispute is the Singapore domestic law.

B.

THE LAWS OF SINGAPORE PERTAINING TO PROTECTION OF E NDANGERED SPECIES HAVE

BEEN VIOLATED BY THE R ESPONDENT.

18.

The Respondent has violated the laws dealing with the protection of trade in endangered

species namely the Convention for International Trade in Endangered Species [i] and the

Endangered Species (Import and Export) Act of Singapore [ii].

27 Whitworth Street Estates (Manchester) Ltd. v. James Milller and Partners Ltd. [1970] AC 583, 603.

28 Bonython v. Commonwealth of Australia, [1951] AC 201, 219 (Privy Council on appeal from Australia).

29 Y.K. Fung Securities Sdn Bhd v. James Cape (Far East) Ltd , 3 [1997] 2 MLJ 621.30

Proposition, P.3.31 Proposition, P.3.32

Proposition, P.1.33

Proposition, P.2.


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i.

The Respondent is in violation of the Convention for International

Trade in Endangered Species ( “ CITES ” ).

19. A specimen includes any animal or plant mentioned within the schedules, whether alive

or dead.34

Trade in such specimen must be particularly strict as they are threatened with

extinction. Trade is authorized only in exceptional circumstances,35 and is not permitted

except in accordance with the provisions of CITES.36 The Asian Golden Cat is

recognized as a scheduled species under Appendix I of the CITES.37 Since Singapore is a

party to the CITES, in order to export or import any of the species cited in Appendix I

within its territory, prior grant and permit is essential.38 As Respondent has not procured

any such permit,39 he has engaged in the illegal trade in an endangered species, and

therefore, has violated the CITES.

ii.

The Respondent is in violation of the Endangered Species (Import and

Export) Act, 2008 ( “ Endangered Species Act ” ).

20.

This domestic Act has been adopted in compliance with and in order to enforce the

CITES. No person can import/export or re-export and schedule species without a

permit.40 Further, no person is allowed to have possession, sell, offer or expose for sale

or display any of the schedule species without a permit.41 The Asian Golden Cat is a

scheduled specimen under the Endangered Species Act.42 The Respondent, has not

acquired any permit for import/export, is in possession and has offered for sale a

schedule specimen, which is in contravention to this Act.

34 Art. I, (b)(i), Convention for International Trade in Endangered Species, 2008 [ hereinafter “CITES”].

35 Article II, §1, CITES.

36 Article II, §4, CITES.

37 Catopuma temminckii, Appendix I, CITES.

38 Article III, §2, CITES; Article III, § 3, CITES.39

Clarifications, First Set, P.1.40 §4(1), Endangered Species (Import and Export) Act, 2008 [hereinafter “Endangered Species Act”].41

§4(2), Endangered Species Act.42

Part 1, Appendix I, Endangered Species Act.


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21. Further, the Respondent cannot take the defence of the trade being due to some reason

beyond his control. The Respondent, in this case, would be required to prove that he took

all reasonable precautions and exercised all due diligence to avoid the commission of

such offense.43

Before the import of the goods from the Respondent’s supplier, China

Fur, the Respondent was shown samples of the products.44 The Respondent has not

exercised due diligence to avoid the commission of such offence. Being in the business

of such trade, it is reasonably expected of the Respondent to have or acquire the

knowledge and details of the products put up for sale. Ignorance is not an excuse to avoid

the provisions of this Act. Therefore, the Respondent has clearly violated the Act.

C.

THE LAWS OF SINGAPORE PERTAINING TO ADVERTISING HAVE BEEN VIOLATED BY THE

R ESPONDENT.

22. The Respondent has engaged in deceptive and misleading advertising through unfair

trade practices. The Respondent has violated the laws of Singapore, namely the

Singapore Code of Advertising Practice, 2008 [i] and the Consumer Protection (Fair

Trading) Act, 2004 [ii]. Furthermore, neither the intention [iii] nor the knowledge [iv] of

the Respondent is relevant considerations in respect of such violations.

i.

The Respondent has violated the Singapore Code of Advertising

Practice, 2008 ( “ SCAP ” ).

a.

The principles derived from the SCAP are applicable to the present matter.

23.

The Singapore Code of Advertising Practice, by Consumer Association of Singapore

(CASE), has been formulated against the background of national law, international law

and practice including the International Code of Advertising Practice published by the

International Chamber of Commerce (ICC). It is a self-regulatory code, which is approved

43 §6(1), Endangered Species Act.

44 Clarifications, First Set, P.1.


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by the Agri-Food & Veterinary Authority (AVA), a governmental authority.45 The

Singapore government in many reports has recognized and applauded the principles of

SCAP and their necessity in the context of advertising.46 These self-regulatory codes are

approved in common law countries to be an effective part of regulatory controls over

misleading advertising.47 In Singapore too, the SCAP is a regulatory source of dealing

with misleading advertisement and thereby the principles have effect in this scenario.

b.

The Respondent has engaged in deceptive and misleading advertising under SCAP.

24.

Advertisements should not abuse the trust of the consumer or exploit his lack of

experience, expertise and knowledge.48 They should give a truthful presentation - there

should be no ambiguity or inaccuracy,49 and should not misrepresent any information to

mislead the consumers into believing any matter, which is not true, such as the source of

the product and the quality of the product.50 In this factual matrix, the Respondent has

misrepresented the material facts to the consumers through its advertisement. There

existed ambiguity, which led consumers to believe that the products are made of faux fur,

while they were actually made of the real fur of the Asian Golden Cat. The source of the

product and the quality of the product were not stated clearly. The advertisement is

misleading and deceptive in nature and therefore, the principles of the SCAP have been

violated.

45 Singapore Code of Advertising Practice, 2008 [hereinafter “SCAP”].

46 Singapore Report for ACCP (ASEAN Committee on Consumer Protection), June 2008.47

Margaret Griffiths, Unfair Commercial Practices - A New Regime, Comms. L. 2007, 12(6), 196-204.48 Part II, §3.1, SCAP.49

Part II, §5.1, SCAP.50

Part II, §5.1.b, SCAP.


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ii.

The Respondent has violated the principles of Consumer Protection

(Fair Trading) Act, 2004 ( “ Consumer Protection Act ” )

a. The principles derived from the Consumer Protection Act are applicable in the

present matter.

25.

In the British Columbian case of Robson v. Chrysler Canada Ltd.,51 it was held that a

local distributer who advertised and promoted products could be considered to be

involved in a ‘consumer transaction’. As the practices engaged in by the Respondent are

related to a ‘consumer transaction’, the principles of the Consumer Protection Act are

applicable, irrespective of whether there was a contract or agreement or not. In this

particular case, the Respondent is promoting his goods and advertising the fur to

consumers as having the “touch, feel and smell of real fur ”. By virtue of this

advertisement and promotion, the Respondent can be said to be involved in a ‘consumer

transaction’ and thereby the principles of Consumer Protection Act can be applied.

b.

The advertisement was misleading and deceptive under the Consumer Protection Act.

26.

An unfair practice is said to have occurred when the supplier states something as a result

of which a consumer might be reasonably deceived or misled.52 Representing goods to be

of a particular quality or origin, which they are not amounts to an unfair practice. 53 A

supplier should not take advantage of a consumer when he reasonably knows that a

consumer will not be able to ascertain the language, character, effect or any matter related

to the transaction.54 In this particular case, the Respondent has represented the goods to be

of a certain quality (faux) in an implied manner. It is reasonable to assume that an average

consumer will not be able to ascertain the quality of the product. Therefore, the

51 Robson v. Chrysler Canada Ltd. [2001] B.C.T.C. 40 (Canada).

52 §4(a), Consumer Protection (Fair Trading) Act, 2004 [hereinafer “Consumer Protection Act”].53

Second Schedule, Consumer Protection Act.54

§4(c)(ii), Consumer Protection Act.


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Respondent has indulged in unfair practices by misrepresenting his goods and not

disclosing material facts.

27.

Further, this misleading and deceptive advertising occurs if the non-disclosure of

material facts is likely to affect the decision-making process of a consumer.55 The aspect

of the misleading nature focuses wholly on consumer beliefs. If an individual’s belief in

a false claim is increased after exposure to the advertisement, it is deemed a misleading

advertisement.56 The Respondent himself has admitted that consumers are unable to tell

the difference between real and faux fur. This ambiguity in the belief of the consumers

was taken advantage of by the Respondent, as clear disclosure of the material facts is

likely to have affected the decision-making process of a consumer. The advertisement

therefore deceived the consumers into believing that the fur, which was actually real, was

faux.

iii.

The intention of the Respondent is irrelevant to the present matter.

28.

The standard of a reasonable man is applied to determine whether or not conduct of a

party has been misleading or deceptive. An intention to mislead is not a necessary

ingredient.57 The Singapore statute expressly points to reasonableness and therefore the

objective test is to be applied.58 In common law,59 it is an established principle that if a

fact conveys a meaning, which is misleading or false, that itself is enough to prove

misleading advertisement. It need not have a deliberate intent to deceive. If the act has

the capability of deceiving individuals, it is considered as misleading advertising. It has

been established that the advertisement by the Respondent had the capability of

55 Bundesgerichtshof (German Supreme Court), Gewerblicher Rechtsschutz und Urheberrecht, 1982, 374.

56 J. Edward Russo, Barbara L. Metcalf and Debra Stephens, Identifying Misleading Advertisement , Journal of

Consumer Research, Vol. 8, No. 2 (Sep., 1981), ¶¶119-131.57

Parkdale v. PUXU (1982) 42 A.L.R. 1 at 6 (Australia).58 §5(3)(a), Consumer Protection Act.59

Global Sportsman v. Mirror , (1984) 55 A.L.R. 25 at 30 (Australia); Findlay v. Couldwell and Bcywiood Motors, (1976) 5 W.W.R. 340 at 345 (Canada).


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deceiving individuals. The argument of the Respondent stating that there was no

intention to deceive does not stand, as intention is irrelevant in such disputes.

iv.

The Respondent ’ s knowledge of the misleading element is irrelevant in

the present matter.

29.

There is a positive duty on the supplier to ascertain the relevant facts, which may be of

interest to consumers.60 China Fur, the manufacturer, before the import, displayed

samples of the fur products to the Respondent.61 Given the Respondent’s experience in

the business and the description provided by him, the defence of not possessing the

knowledge of the element, which leads to a misleading act, does not stand.

30.

Further, it has been held that merely putting the label on a fabric is sufficient to hold a

seller liable for unfair practices, and not the manufacturer.62 In this factual scenario, the

manufacturer (China Fur) cannot be held liable if the Respondent himself has advertised

the goods. The defence of ignorance of the fact is irrelevant, as the Respondent has

labelled, advertised and sold the products.63 Therefore, it is the Respondent, who is to be

held liable, and not the manufacturer. It is irrelevant whether the Respondent actually

possessed the knowledge of whether the fur was actually real or faux.

60 Rushak v. Henneken, (1991) 84 D.L.R (4

th) 87 (Canada).

61 Clarifications, First Set, P.1.62

Wilkinson v. Katies, (1986) 67 A.L.R 137 (Australia).63

Clarifications, First Set, P.2.


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III. THE KLRCA HAS THE AUTHORITY TO ESTABLISH PENALTIES FOR

FUTURE SALE OF MISLABELED GOODS

31. The KLRCA has the authority to establish penalties because it has broad powers to take

punitive measures [A]. In addition, monetary sanctions in the form of fines can have a

stronger deterrence effect in ensuring expeditious proceedings [B].

A.

THE KLRCA HAS BROAD POWERS TO TAKE PUNITIVE MEASURES.

32.

The KLRCA’s broad powers stem from the travaux preparatoires [i]. Second , it is

empowered by the lex arbitri [ii]. Third , it has inherent powers to grant sanction [iii].

Finally, Article 14 of the Fast Track Rules gives the tribunal wide discretion [iv].

i.

The travaux preparatoires give arbitrators maximum freedom.

33. The UNCITRAL Rules allow the tribunal to make “separate awards on different issues at

different times”.64 The travaux preparatoires indicates that such broad powers give

arbitrators maximum freedom in issuing awards that ensures the maximum efficiency of

the proceedings.65 Moreover, the Malaysian Arbitration Act does not expressly forbid

international arbitrations from issuing fines.66 Hence, the penalties can be imposed by the

KLRCA since it has been accorded broad powers.

ii.

The Arbitral Tribunal is empowered by the lex arbitri.

34.

Article 21(3)(i) of the Malaysian Arbitration Act provides that such powers conferred

upon the Arbitral Tribunal include the power to “make such other orders as the tribunal

considers appropriate.”67 Thus, the lex arbitri warrants a very large power for the tribunal

to impose monetary sanctions without restriction. Since the power to impose sanctions is

expressly granted to the Arbitral Tribunal, the imposition of penalties will not give rise to

64 Art. 34(1), UNCITRAL Arbitration Rules, 2011.

65 United Nations Commission on International Trade Law, Summary Record of the 10

th Meeting of the

Committee of the Whole(II) (UN Doc A/CN.9/9/C.2/SR.10) P.59.66

Inter Chem Asia 2000 PTE Ltd v. Oceana Petrochem, 373 F.Supp.2d 340 (S.D.N.Y. 2005) P.933; Neil, PhilipD., The Power of Arbitrators to Award Monetary Sanctions for Discovery Abuse (Nov. 2005/ Jan. 2006) 60Disp. Res .J. 60, 3.67

§21(3)(i), Malaysian Arbitration Act, 2005.


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a ground for setting aside or refusal of enforcement of such award. Hence, the Arbitral

Tribunal is empowered by the lex arbitri to impose penalties. Therefore, the tribunal can

establish a penalty of US $500 on Tan Sen for each item of clothing containing the fur of

an “endangered species” it sells.

iii.

The Arbitral Tribunal has inherent powers to grant sanction.

35.

In LETCO v. Liberia, the Arbitral Tribunal awarded the Claimant the full costs of

carrying out the arbitration, including its own legal representation, based on Liberia’s

procedural bad faith.68 Similarly, in Victor Pey v. Chile, the Arbitral Tribunal ordered

Chile to pay three-quarters of the arbitration costs and US$2million of the Claimant’s

legal fees because it failed to cooperate in the arbitration.69 In ReliaStar Life, the Arbitral

Tribunal expressly relied on its inherent authority by awarding fees against a party that

acted in bad faith during the arbitration and arbitration expenses.70 Thus, an Arbitral

Tribunal has inherent powers to establish penalties. Hence, the KLRCA can penalize Tan

Sen.

iv.

Article 14 of the Fast Track Rules gives the tribunal wide discretion.

36.

The tribunal can impose legal or other costs on the Respondent.71 Moreover, the Rules

give the Arbitral Tribunal to award costs in a summary and commercial basis and in such

manner and amount as it shall in its absolute discretion consider “fair, reasonable and

proportional” to the matters in dispute.72 Considering that Jack Small suffered total sales

have dropped by 40% and sales of fur products have dropped 70% respectively,73 the

68 Award of 31 March 1986, 2 ICSID Rep. 343, 378.

69 Award of 22 April 2008, ICSID, ¶¶726-730.

70 ReliaStar Life Insurance Company of New York v. EMC National Life Company. Docket No. 07-0828-cv,

2009 WL 941173 (2d Cir. April 9, 2009), Techno-Impex v. Gebr. Van Weelde Scheepvaartkantoor B, [1981]QB 648.71 §14(1)(e), Fast Track Rules.72

§14(2), Fast Track Rules.73

Clarifications, First Set, P.2.


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Arbitral Tribunal can impose costs on the Respondents since this is proportional and just.

Thus, KLRCA has the authority to establish penalties.

B. MONETARY SANCTIONS IN THE FORM OF FINES CAN HAVE A STRONGER DETERRENCE

EFFECT IN ENSURING EXPEDITIOUS PROCEEDINGS.

37.

Article 17 of the UNCITRAL Rules grants tribunals the power to fill gaps in the

procedural rules.74 In particular, tribunals will be minded to fill gaps in the procedural

rules where they are insufficient in ensuring expeditious arbitral proceedings.75 The

compensation would have a deterrence effect only if they are disproportionately higher

than the additional costs incurred.76 The KLRCA Fast Track Rules stem from the

KLRCA Rules, which are based on the UNCITRAL Arbitration Rules. Moreover, they

can fill gaps in expeditious proceedings under the Fast Track Rules since they do not

provide for necessary relief. Hence, the KLRCA can grant penalties in this matter.

74 Schreuer, Christopher The ICSID Convention: A Commentary (Cambridge University Press 2001), P.683;

Prosecutor v. Tihomic Blaskic, IT-95-1 4-AR 108 bis (1997), P.33.75 Gaeta, P. “Inherent Powers of International Courts and Tribunals” in Vohrah, L.C. et al (eds) Man’sInhumanity to Man: Essays on International Law in Honour of Antonio Cassese (Kluwer Law International2003) ¶¶370-71; Brown, Chester, A Common Law of International Adjudication New York, (Oxford UniversityPress 2007) ¶¶78-81.76

Certain Underwriters at Lloyd ’ s London v. Argonaut Ins., 264 F.Supp.2d 926,944 (N.D. Cal. 2003).


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IV.

THE KLRCA HAS THE AUTHORITY TO GRANT A PERMANENT

INJUNCTION ENFORCEABLE IN SINGAPORE.

38.

The KLRCA is authorized to grant a future permanent injunction [A]. Moreover, a

permanent injunction granted by the KLRCA is an award, which is enforceable by courts

in Singapore [B].

A.

A FUTURE PERMANENT INJUNCTION CAN BE GRANTED BY THE KLRCA.

39.

The Arbitral Tribunal can grant a future permanent injunction because the express

mention of power to grant injunctive relief is not necessary [i]. The KLRCA also has

inherent powers to grant injunctory relief [ii] and more specifically, permanent relief of

that nature [iii]. Moreover, the KLRCA can award future injunctory relief [iv]. Lastly,

the KL Rules incorporate Art. 26 of the UNCITRAL Rules and thereby envisage greater

flexibility for interim relief [v].

i.

The express mention of power to grant injunctive relief is not necessary.

40.

Even in the absence of an express agreement conferring powers of injunctive relief,

courts have routinely upheld granting of such relief.77 Common law courts have also

reached this conclusion,78 because the words used to confer power to resolve the dispute

confer almost unlimited flexibility in the method of its resolution. 79 Moreover, if there

are no specific limitations, the arbitrator has the power to award “any remedy of relief

which the arbitrator deems just and reasonable”.80

41.

The Fast Track Rules clearly establish that the seat of arbitration is Malaysia.81

Further, in principle, the law governing the Arbitral Tribunal’s power to grant interim

77 Adamas Mgt & Services Inc. v. Aurado Energy Inc., XXX Y.B. Comm. Arb. 479 (New Brunswick QB 2004)

(2005).78

Freydberg Bros. Inc. v. Corey, 31 N.Y.S.2d 10 (N.Y.S.Ct 1941).79 NSW Racing v. T.A.B, [2002] N.S.W.S.C 742 P.26 (New South Wales Supreme Court).80

Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046, 1049 (6th Cir. 1984).

81 Art. 6, Fast Track Rules.


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relief is that of the arbitral seat.82 Moreover, the Arbitral Tribunal has the power to make

such other orders, as the tribunal deems appropriate.83 In any case, the Arbitral Tribunal

has “absolute discretion” to grant an award which it considers “fair, reasonable and

proportional to matters in dispute.84

42.

Hence, the law of the seat does not prevent the tribunal from granting a permanent

injunction. This is in consonance with Malaysian law since it is based on British

Common law, whose principles have upheld such relief in the given circumstances.

Thus, the absence of provisions of injunctive relief in the KLRCA Fast Track Rules does

not preclude it from granting injunctive relief.

ii.

The KLRCA has inherent powers to grant injunctory relief.

43. The authority to issue an order for the cessation or discontinuance of a wrongful act

results from the inherent powers of a competent tribunal85, confronted with the

continuous breach of an international obligation in force and that continues to be in

force. The wrongful act must have a continuing character and the violated rule must still

be in force at the time in which the order is issued.86 Moreover, such relief is not limited

to inter-State disputes.87

44.

Tan Sen has violated international obligations by violating provisions of the CITES.88

Further, it will continue to use such fur of the Asian Golden Cat unless prevented from

doing so. Therefore, a permanent injunction is warranted. Thus, the KLRCA can grant

injunctory relief in this matter.

82 Gary Born II, P.1963.

83 §21(3)(i), Malaysian Arbitration Act, 2005.

84 Art. 14(2), Fast Track Rules.

85 Enron Corp. and Ponderosa Assets LP v. Argentine Republic, Decision on Jurisdiction, ICSID Case No.

ARB/01/3 (14th Jan. 2004) P.81.86

Rainbow Warrior (Fr. V. N.Z), R.I.A.A., Vol. XX, 1990, ¶¶217, at 270, P.11487 Enron Corp. and Ponderosa Assets LP v. Argentine Republic, Decision on Jurisdiction, ICSID Case No.ARB/01/3 (14

th Jan. 2004) P.81.

88 Article III, §2, CITES.


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iii.

The KLRCA can grant a permanent injunction.

Arbitral Tribunals can give the remedy of a permanent injunction in principle. 89 In the Trail

Smelter Arbitration, the Arbitral tribunal granted a future permanent injunction.90 Further, the

Texaco (TOPCO) v. Libyan Arab Republic91

clearly established that whether the parties to the

arbitration are States, is irrelevant in granting a relief of resitutio in integrum. Therefore,

Arbitral Tribunals can grant permanent injunctive relief. Hence, the KLRCA can grant such

relief.

iv.

Further, the KLRCA can award future injunctory relief.

45.

Awards fixing prices of disputed products for one year and the requirement to obtain the

tribunal’s approval in the future have been upheld.92 Therefore, the KLRCA can grant

future injunctive relief since there is no provision in the Malaysian Arbitration Act or

Fast Track Rules to prevent such relief. Hence, the tribunal has the requisite authority.

v.

The KL Rules incorporate Art. 26 of the UNCITRAL Rules and thereby

envisage greater flexibility for interim relief.

46.

The Kuala Lumpur Regional Rules do not actually contain an Article 26. They do,

however, incorporate the UNICTRAL Arbitration Rules, which do have an Article 26

that provides for interim protection.93 Hence, the Rules must be read in reference to Art.

26 of the UNCITRAL Arbitration Rules.

89 Kamakazi Music Corp. v. Robbins Music Corporation, 684 F.2d 228 (1982) (US Court of Appeals). Trevor

Cook and Alejandro I. Garcia , International Intellectual Property Arbitration, 270 (Kluwer Law International2010).90 Trail Smelter Case, (U.S. v. Canada), 3 R.I.A.A. 1905.91

Texaco Overseas Petroleum Company and California Asiatic Oil Company v. Government of the Libyan Arab Republic, Award on the Merits, 19th Jan. 1977, 53 I.L.R 389.92

Anderman/Smith Operating Co. v. Tenn. Gas Pipeline Co., 918 F.2d 1215 (5th Cir. 1990).

93 Clarifications, First Set, P.4.


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a. The UNCITRAL Rules differ from the UNCITRAL Model Law.

47. The UNCITRAL Arbitration Rules are different from the Model Law because they are

directed at parties94 designed to enable greater flexibility and compatibility to parties

from diverse States, than are available under national laws.95

Hence, the parameters of

the UNCITRAL Model Law are not applicable to the UNCITRAL Rules. Thus, the

measures for provisional relief must be read from the UNCITRAL Rules.

b.

The Rules do not limit the type of provisional measures.

48.

The Arbitration Rules omit from their definition a clause contained in the Model Law

providing that temporary measures are appropriate “whether in the form of an award or

another form.”96 Hence, by eliminating this clause, the Rules do not limit the form of the

temporary measure, but avoid explicitly encouraging awards as a permissible form for

interim measures.

c.

The Rules do not elucidate an exhaustive list of measures.

49.

The Rules’ definition of interim measures diverges from the Model Law by including the

words “for example and without limitation” in the chapeau of Article 26(2).97 Thus, the

insertion of “without limitation” contemplates the possibility of other types of interim

measures not found in the list.98 Hence, a permanent injunction may be granted by the

KLRCA. Therefore, it has the authority to pass such interim relief.

d.

The Rules broaden the range of actions to be refrained from.

50.

The Arbitration Rules clearly separate “current or imminent harm” from “ prejudice to the

arbitral process, the Rules expressly broaden the range of actions to be prevented or

94 UNCITRAL, Report of Working Group II (Arbitration and Conciliation) on the Work of its Forty-Fifth

Session, ¶¶17-19, delivered to the General Assembly, U.N. Doc. A/CN.9/614 (Oct. 5, 2006)95

Id. 96

Id. at P.5197 UNCITRAL, Settlement of Commercial Disputes: Revision of the UNCITRAL Arbitration Rules, Note by theSecretariat, P.13, Art. 26(2), delivered to Working Group II (Arbitration and Conciliation), U.N. Doc.A/CN.9/WG.II/WP.151/Add.1 (Aug. 6, 2008) with 2010 Arbitration Rules, Art. 26(2).98

UNCITRAL, Report of Working Group II (Arbitration and Conciliation) on the Work of its Fiftieth Session,P.92, delivered to the General Assembly, U.N. Doc. A/CN.9/669 (March 9, 2009).


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refrained from. Without the clear distinction between harm and prejudice, the clause

could be understood to refer only to prejudice to the arbitral process. Thus, by

eliminating ambiguity that existed under the Model Law, the Rules’ seemingly minute

clarification explicitly widens the categories of circumstances under which interim

measures may be granted.

B.

A PERMANENT INJUNCTION GRANTED BY THE KLRCA IS AN AWARD ENFORCEABLE

BY COURTS IN SINGAPORE.

51.

The interim relief granted by the KLRCA is enforceable in Singapore because

injunctions constitute awards [i]. Second , awards granting injunctions are enforceable

[ii]. Third , the permanent injunction is a “ partial award ”. Finally, foreign awards can be

enforced in Singapore [iii].

i.

Injunctions constitute “ awards” under the KLRCA Rules.

52. It is well settled that an award, within the meaning of the New York Convention,

includes instruments ordering non-monetary relief, such as injunctory relief.99 Moreover,

arbitral decisions granting provisional measures are to be treated as “final” awards and

subject to recognition and enforcement.100 Further, provisional relief is also termed as an

interim award.101 Singapore is a contracting party to the New York Convention. Thus,

the grant of a permanent injunction is an award.

ii.

Awards granting injunctions are enforceable.

53.

Under the New York Convention, interim awards of provisional relief “finally” dispose

of requests for such relief and should be capable of recognition and enforcement in

national courts, like other awards granting relief.102 Hence, the award of a permanent

99 Adamas Mgt & Services Inc. v. Aurado Energy Inc., XXX Y.B Comm. Arb. 479 (New Brunswick WB 2004)

(2005); LV Fiannce Group Ltd. v. IPOC Int ’ l Growth Fund Ltd. [2006] Bda LR 69 (Bermuda CommercialCourt); Gary Born II, P.2354.100 Arrowhead Global Solutions Inc. v. Datapath Inc. 166 Fed.Appx. 39, 41 (4th Cir. 2006).101

Pac. Reins v. Ohio Reins, 9.35 F.2d 1019 (1991).102

Gary Born II, P.2435.


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injunction can be enforced in Singapore since it is a contracting party to the NYC

Convention.

iii.

Arguendo, the permanent injunction is a “ partial award ” .

54.

The difference between an “interim” and a “ partial” award is that an interim award is not

a definite adjudication of a matter in dispute but is subject to a subsequent review by the

arbitration tribunal.103 A partial award is an award that is a final ruling on an isolated

matter that may be appropriate for resolution at an early stage such as the general basis of

liability.104 The permanent injunction is a ruling on the mislabelling of goods by the

Respondent. Moreover, it is permanent relief and not subject to review. Hence, it was

appropriate at this stage to prevent further damage to the Claimant by means of deceptive

advertising. Thus, it is a partial award of the KLRCA.

iv.

Foreign awards can be enforced in Singapore.

55.

A “foreign award ” means an arbitral award made in pursuance of an arbitration

agreement in the territory of a Convention country other than Singapore. Moreover, an

arbitral award passed by the KLRCA will be deemed to be an award passed in

Malaysia.105 Hence, the award passed by the KLRCA is classified as a “foreign award ” in

accordance with Singapore law.

56.

An “arbitral award ” under the Singapore International Arbitration Act includes any “an

interim injunction or any other interim measure.”106 Moreover, courts in Singapore have

refused to set aside interlocutory awards of Arbitral Tribunals in international

arbitrations.107 Thus, the foreign award passed by the KLRCA is enforceable in Singapore.

103 Howard M Holtzman & Joseph E. Neuhaus, A Guide to the UNCITRAL Model Law on International

commercial Arbitration: Legislative History (Boston: Kluwer Law and Taxation Publishers, The Hague, 1989).104 Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New YorkConvention, 156 (Kronke, Nacimiento et. Al, eds, Wolters Kluwer, 2010).105 Art. 6(3), Fast Track Rules.106

Chapter 148A, §12(1)(i), §27(1), Singapore International Arbitration Act, 2002.107

P.T. Pukuafu Indah and Ors. v. Newmont Indonesia Ltd. and Anr., [2012] SGHC 187.


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CONCLUSION AND PRAYER FOR RELIEF

Jack Small Ltd., the Claimant, respectfully requests this Tribunal to adjudge and declare as

follows:

I.

Award damages to redress the economic losses it has suffered from lost sale of its

faux fur products.

II.

Issue an order prohibiting the Respondent from continuing to carry, promote, and/or

sell clothing containing any fur of any endangered species on the relevant CITES

protected list.

III.

Establish a penalty of US $500 for each item of clothing containing the fur of an

“endangered species” the Respondent sells.

Documents

Jurisdiction in International Commercial Arbitration