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[From Singapore Office] Singapore Court of Appeal Sets Aside SIAC Award in a Rare Case

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December 2025

[From Singapore Office] Singapore Court of Appeal Sets Aside SIAC Award in a Rare Case

Author: Annia Hsu, Tamaki Ito (Co-author)

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Publisher: Nagashima Ohno & Tsunematsu

Journal / Book: NO&T Dispute Resolution Update No.20/NO&T Asia Legal Review No.109 (December, 2025)

Notes: A PDF file of the bilingual version is also available by clicking on “Download full text (PDF)”. For details on our Dispute Resolution Team at the Singapore Office, please refer to this PDF file.

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*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.

Introduction

On 10 October 2025, the Singapore Court of Appeal set aside an SIAC award arising from a dispute over the construction of a thermal power plant in Vietnam. Vietnam Oil and Gas Group v Joint Stock Company (Power Machines – ZTL, LMZ, Electrosila Energomachexport) [2025] SGCA 50 is noteworthy given the low success rate of setting aside applications in Singapore, reflecting its policy of minimal curial intervention. The decision offers important guidance on when the fair hearing rule is breached and clarifies how that differs from a tribunal acting in excess of jurisdiction.

Background of Case

The dispute arose from an engineering, procurement and construction contract (“Contract”) entered into in 2013 between the project owner Vietnam Oil and Gas Group (“PVN”) and a contractor consortium (“PM”), governed by Vietnamese law with SIAC arbitration seated in Singapore.

The project commenced in January 2015. On 26 January 2018, PM was designated a Specially Designated National by the US Office of Foreign Assets Control, leading many of PM’s subcontractors to suspend performance. On 5 February 2018, PM issued a termination notice relying on force majeure (the “First Notice”). On 8 February 2019, PM issued another termination notice on the ground of non-payment by PVN (the “Second Notice”). The dispute over the validity and effect of these two notices was referred to arbitration.

The arbitral tribunal found in favour of the contractor PM, holding the Second Notice valid and awarding about USD 300 million in damages. It was stated at paragraph 548 of the final award that “In the Tribunal’s opinion, a valid Second Notice issued while the contract remains on foot overrides and supersedes the ineffective First Notice. By issuing a Second Notice prior to the First Notice taking effect, [PM] must be taken to have intended the Second Notice to replace or, at the very least, supplement the First Notice.”

PVN applied to set aside the award, alleging, among others, breach of natural justice and excess of jurisdiction. The High Court found that the tribunal had breached the fair hearing rule and acted in excess of jurisdiction, and remitted the case to the tribunal for reconsideration. Both parties appealed.

Case Analysis

The Court of Appeal found that the tribunal’s finding that the Second Notice was valid and superseded the unlawful First Notice did not have a sufficient nexus to the parties’ cases and that the parties did not have reasonable notice of the tribunal’s intended approach.

A facet of the fair hearing rule “requires that a tribunal’s chain of reasoning should have sufficient nexus to the case advanced by the parties and be one[] of which the parties had reasonable notice that the tribunal could or might adopt.” A chain of reasoning is open to the tribunal if: “(a) it arises from the party’s express pleadings; (b) it is raised by reasonable implication by a party’s pleadings; (c) it does not feature in a party’s pleadings but is in some other way brought to the opposing party’s actual notice; or (d) the links in the chain flow reasonably from the arguments actually advanced by either party or are related to those arguments”.

The Court of Appeal held that tribunal’s conclusion ran contrary to PM’s pleaded position that the Second Notice was not intended to withdraw the First Notice, and was not addressed in either party’s expert evidence. As this conclusion was pivotal to liability and affected significant parts of the award, the Court of Appeal agreed with the High Court that PVN suffered prejudice as the opportunity to adduce further evidence and submissions had a real (not fanciful) chance of making a difference to the tribunal’s deliberations.

However, the Court of Appeal disagreed with the High Court’s finding that the tribunal had acted in excess of its jurisdiction. Whether the Second Notice overrode, superseded, replaced or supplemented the First Notice was a logically anterior issue within the scope of the submission to arbitration; the tribunal’s failure was not in exceeding its jurisdiction but in not alerting parties to its intended chain of reasoning.

Conclusion

The Court of Appeal allowed PVN’s appeal, setting aside paragraph 548 and consequential portions of the final award. The decision underscores the importance of arbitral tribunals providing parties with a reasonable opportunity to address any novel lines of reasoning departing from parties’ cases and serves as a timely reminder to tribunals to engage closely with the submissions and materials presented before them to ensure that their conclusions flow reasonably from the arguments that had been advanced.

December 11, 2025

This newsletter is given as general information for reference purposes only and therefore does not constitute our firm’s legal advice. Any opinion stated in this newsletter is a personal view of the author(s) and not our firm’s official view. For any specific matter or legal issue, please do not rely on this newsletter but make sure to consult a legal adviser. We would be delighted to answer your questions, if any.

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Lawyers

Annia Hsu

Counsel

Singapore

Tamaki Ito

Associate

Tokyo

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