Does an Arbitral Tribunal Only Have Jurisdiction to Decide a Matter Correctly?


One of the distinctive characteristics of arbitral awards are that they cannot be subject to an appeal. As they say, “arbitral awards are final and binding”. Against this background, the very interesting question of whether an arbitral tribunal only has jurisdiction to determine a matter correctly came up in Himalaya Food International Ltd v Simplot India LLC and Anor[1]. As the Singaporean High Court presided over by Andre Maniam JC put it, “Does an arbitral tribunal only have jurisdiction to decide a matter correctly, such that an erroneous decision would go beyond the scope of the submission and justify setting aside the resulting award?”. The court did not think so.  


The Plaintiff, H, entered into an agreement with the Defendants for, amongst other things, the sale to the Defendants of a Potato Pilling Equipment. The Defendants were expected to use the Potato Pilling Equipment to produce and sell potato products for the commercial market. The parties entered into a Master Agreement to cover this transaction. Under the terms of the Master Agreement, “… the Potato Processing Equipment shall be deemed to have met the “production requirements” if line 1 is capable of consistently producing 50 million pounds of Potato Products per year…” The Potato Peeling Equipment did not work according to plan. The Defendant’s commenced arbitration alleging that the Potato Peeling Equipment was not fit for purpose. The Arbitral tribunal agreed with the Defendants. According to the arbitral award under challenge, : “The MA clearly states…that the PPE is fit for the use and reasonably intended, and is capable of meeting the production requirement… the tribunal finds that the PPE was not fit for purpose.” The tribunal went on to award damages against the Plaintiff.

It is the Plaintiff’s case that the award ought to be set aside because it dealt with matters outside of the scope of the submission to arbitration. Specifically, the Plaintiff alleged that the tribunal misinterpreted the terms of the contract and as a result, the tribunal has exceeded the scope of the reference when it concluded that the sale of Potato Peeling Equipment came with an implied warranty that the goods were fit for purpose. According to the Plaintiff, there was no such implied warranty under Indian law for goods sold by description. The Plaintiff’ made this point ignoring an express warranty in the Master Agreement to the effect that the Potato Peeling Equipment was fit for purpose.


The court dismissed the Plaintiff’s challenge. According to the court, “An agreement to arbitrate is the foundation of an arbitral tribunal’s jurisdiction. Where parties have agreed on what is in issue before the tribunal, the losing party cannot thereafter fault the tribunal for dealing with that issue.” The court continued, “here it was common ground that whether the [Potato Peeling Equipment] could produce potato products of “quality” was in issue, and the tribunal did not exceed the scope of submission to arbitration in deciding that issue.” As a fall-back argument, the court noted that even if the “quality” question was not part of the issues to be determined by the court, “the parties by their conduct in the course of the arbitration would have conferred jurisdiction on the tribunal to deal with that issue[2]”. Further, the court was satisfied with the tribunal framing of the issue as: “whether the PPE was of satisfactory quality and/or fit for purpose, including whether the PPE was capable of meeting the Production Requirements and producing quality fries.”

The Court concluded that the tribunal did not exceed the scope of its reference, and that there was no basis for the setting aside of the award.

Photo by Benjamin Child on Unsplash

[1] [2020] SGHC 222

[2] PT Prima International Development v Kempinski Hotels SA and Others Appeals [2012] 4 SLR 98 at page 32. The reasoning of the court is consistent with the waiver of right provisions in Section 27 of Ghana’s Alternative Dispute Resolution Act, 2010 (Act 798) which provides that “a party who take part or continues to take part in arbitral proceedings, knowing that (a) the arbitrator does not have jurisdiction; (b) the proceedings are improperly conducted; (c) the arbitration agreement or this Act has not been complied with, or (d) there is an irregularity in respect of the arbitrator or proceedings and who fails to promptly or within the time specified in the agreement or under this Act to object to the proceedings shall be deemed to have waived the right to raise the objection.”

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