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FIDIC Contracts and the Enforceability of Interim Arbitral Awards

June 2015 - Litigation & Dispute Resolution. Legal Developments by Drew & Napier LLC .

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FIDIC Contracts and the Enforceability of Interim Arbitral Awards

9 Jun 2015

This update discusses the recent Singapore Court of Appeal (“CA”) decision in the case of PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation [2015] SGCA 30, where the CA was split 2:1 in its decision with the majority of the CA dismissing the appeal.  In the case of PT Perusahaan, the CA considered the interpretation of section 19B of the International Arbitration Act (Cap 143A) (“IAA”) in coming to its decision, as well as the question of whether an interim award  was an “award” as defined in section 2 of the IAA.

The majority decision of the CA in PT Perusahaan provides a degree of clarity on the status of interim arbitral awards - that interim arbitral awards can be final and binding on the parties to an arbitration, notwithstanding that a final decision has not been rendered in respect of the underlying issues in dispute between the parties and gives full practical effect to the dispute resolution mechanism envisaged in Clause 20 of the 1999 FIDIC Red Book.

Contracting parties who have incorporated the terms of the 1999 FIDIC Red Book no longer face uncertainty as an arbitral award ordering prompt compliance with a DAB Decision is immediately enforceable, as the decision of the majority of the CA in PT Perusahaan has now clarified that such an arbitral award is immediately enforceable as an award of the Singapore High Court under the IAA.

Directors Cavinder Bull, SC and Foo Yuet Min successfully represented the respondent, CRW Joint Operation in the appeal.

To read the update, please click here.