GUMUSUT-KAKAP SEMI-FLOATING PRODUCTION SYSTEM (LABUAN) LIMITED v SABAH SHELL PETROLEUM COMPANY LIMITED

Case Significance

A significant illustration of the principle that the limited, procedural grounds under sections 37 and 39 of the Arbitration Act 2005 for setting aside or refusing enforcement of an arbitral award cannot be used to reopen and re-argue the merits of the tribunal's decision.

This Court of Appeal decision concerns the enforcement of an international arbitration award and an attempt to set it aside under the Arbitration Act 2005. The dispute lay between two companies in the oil-and-gas sector, the appellant, Gumusut-Kakap Semi-Floating Production System (Labuan) Limited, and the respondent, Sabah Shell Petroleum Company Limited, and arose from an award made in 2020 in an arbitration administered under the KLRCA rules by a distinguished three-member tribunal. The respondent had obtained an ex parte order to enforce the award under section 39 of the Arbitration Act 2005, and the appellant had applied to set the award aside under section 37, relying on grounds in sections 37(1)(a)(iv) and (v) and the corresponding enforcement-refusal grounds in section 39, together with the provisions of the UNCITRAL Model Law reflected in the Act. The appeals challenged the High Court's decisions upholding enforcement and refusing to set the award aside. The Court of Appeal dismissed the appeals. Endorsing the view of the High Court judge, it held that all the complaints advanced by the appellant were, in substance, an appeal against the merits of the award: the appellant was seeking to reopen, rehash and re-argue the issues already determined in the arbitration, which is not permissible on an application to set aside or resist enforcement. Consistent with the narrow, procedural nature of the setting-aside and enforcement-refusal grounds, the court declined to revisit the tribunal's findings. It dismissed the setting-aside appeals with costs to the respondent. The court's reasoning underscores that the supervising court's task is not to ask whether it would have decided the underlying dispute differently, but only whether one of the confined statutory grounds is genuinely engaged, and that dressing a merits complaint in the language of natural justice or excess of jurisdiction will not bring it within those grounds. The judgment is a significant illustration of the principle that the limited grounds under sections 37 and 39 of the Arbitration Act 2005 cannot be used to re-argue the merits of an arbitral award.