06 Feb 2024
On 31 January 2024, the Singapore International Commercial Court (SICC) (a division of the Singapore High Court) upheld an award of approx. US$ 147 million passed in favour of Shanghai Electric Group (SEC) and against Anil Ambani’s Reliance Infrastructure Limited (Reliance Infra).
Previously, in December 2022, a SIAC tribunal passed a unanimous arbitral award in favor of SEC and against Reliance Infra whereby the latter was directed to pay an aggregate amount of approx. USD 147 million along with interest to SEC pursuant to a guarantee obligation dating back to June 2006. The SIAC arbitration arose out of a dispute between the parties in relation to non-payment against certain equipment and services supplied by SEC for the Sasan Ultra Mega Power Project at Sasan, Madhya Pradesh.
In March 2023, Reliance Infra challenged the arbitral award before the SICC arguing that the arbitral tribunal lacked jurisdiction since the arbitration agreement was invalid and marred by fraud. Reliance Infra argued that its former VP, Rajesh Agrawal did not sign the guarantee letter and his signatures were forged. Alternatively, Reliance Infra also argued that Agarwal lacked authority to sign the guarantee letter. On these grounds, Reliance Infra sought for the arbitral award to be set aside. In support of its position, Reliance Infra examined three witnesses including a handwriting expert who testified that the signatures were forged.
After hearing the parties and the testimony of five witnesses over two days, the SICC ruled in favour of SEC and upheld the arbitral award. It held that not only Reliance Infra failed to prove its accusations of forgery, but it had also waived its right to object to the validity of the award on this basis because it deliberately did not raise this ground before the SIAC tribunal. Further, it also failed to establish that Rajesh Agrawal lacked the authority to sign the arbitration agreement in the guarantee letter.
A complete copy of the judgement was published on 31 January 2024 as the parties had agreed to the decision being published without redactions after the SICC said the seriousness of the allegations “should be known” to the business community. This judgement is reported in the Global Arbitration Review and can be accessed through the following –
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