Jurisdiction - Singapore
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Singapore – Court of Appeal Decision On The Enforceability Of “Interim Awards”.

26 June, 2015


Legal News & Analysis – Asia Pacific – Singapore – Dispute Resolution


In the case of PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation (Indonesia), the Singapore Court of Appeal (the Court) considered the issue of enforceability of interim awards. In short, the Contractor (CRW) had referred a number of contractual variation claims against the Employer (PGN) to a dispute adjudication board (DAB), and sought to enforce the DAB’s decision to promptly pay the adjudicated sum by way of an arbitration. The majority of the arbitral tribunal issued an interim award which CRW sought to enforce in Singapore in the manner of a judgment.


The majority of the Court found that an interim award which disposed of a preliminary issue was enforceable, in contrast to a provisional award, which was issued only to protect a party from damage during the course of an arbitration (which award was not capable of being enforced). The Interim Award made a final decision on PGN’s obligation to pay promptly to CRW the sums indicated in the DAB’s decision.


The Court’s decision is helpful in looking beyond terminology to the characterization of the types of tribunal decision which are enforceable and those which, despite being couched in the nomenclature associated with enforceability, are not enforceable. There is also considerable guidance given on the interpretation of the dispute resolution provisions in the FIDIC form of contracts which is discussed in more detail in our Construction Ebulletin.


PGN’s Challenge


PGN argued on appeal that the Interim Award was intended only to have interim finality and that the majority of the tribunal intended that the Interim Award would be varied and that it was indeed varied.   It also adduced arguments based on the construction of the dispute resolution provisions of the contract. PGN did not articulate the grounds of challenge but it was understood by the Court that PGN’s case was that the Interim Award, since it was not final and was subject to revision, was contrary to s19B of the Singapore International Arbitration Act (the IIA), which law governed the arbitration and that, therefore the arbitration was not conducted in accordance with the parties’ agreed process. On this basis, PGN’s challenge to the Interim Award fell within Article 34(2)(a)(iv) of the Model Law.


The Court Of Appeal’s Decision


The majority of the Court dismissed the appeal. The Court first elaborated on the definition of the various types of award. It described a “partial” award as one which finally disposes of part but not all of the parties’ claims. A “final” award can be understood in a number of ways: (i) an award which resolves a claim or matter in an arbitration with preclusive effect (ie, the same claim or matter cannot be re-litigated); (ii) an award that has achieved a sufficient degree of finality in the arbitral seat; or (iii) the last award made in an arbitration which disposes of all remaining claims (this is a “final” award in the sense used in Art 32(1) of the Model Law). An interim award does not dispose finally of a particular claim but instead finally decides a preliminary issue.


By contrast, a provisional award is one which does not reach a finding on or a determination of the substantive rights of the parties. Under the IIA the tribunal is permitted to issue such orders or directions but they are provisional in nature and are not to be regarded as awards for the purposes of the IIA. They are neither enforceable nor can they be challenged under the grounds which apply to awards. An example of such a provisional award would be an award for preserving assets.


The Court then considered the terms of the FIDIC contract and noted that clause 20.4(4) imposed an obligation on the parties to promptly give effect to a DAB’s decision. This obligation continued unless and until the decision was revised either by amicable settlement or an arbitral award. A notice of dissatisfaction might lead to either of these results but did not displace the binding nature of a DAB’s decision. If the tribunal opened up and revised the DAB’s decision, it would be considering a conceptually distinct question, namely, the state of the final accounts between the two parties. The Court did not consider that the majority of the tribunal intended the Interim Award to be varied by future awards but even if they did, the operation of s19B of the IIA rendered the Interim Award final and binding as regards the particular issue which it decided, in this case PGN’s obligation to make prompt payment of the adjudicated sum.


The Court also held that it was not necessary for the Contractor to refer the underlying dispute to arbitration at the same time as the dispute about prompt payment. It held that PGN’s failure to promptly comply with its obligation to pay was a dispute in its own right which was capable of being finally settled by arbitration. In this respect it disagreed with the previous decision of the Singapore Court of Appeal and the Lower Court. However it was open to PGN to raise the merits of the underlying disputes either by making a counterclaim in CRW’s arbitration or by filing a new request for arbitration.


Even if the Contractor did (as here) place both disputes before the same tribunal, the tribunal was entitled to make an interim or partial award which finally disposed of the question of whether the adjudicated sum should be promptly paid. This award would not be varied in the future course of the arbitration. In this case, whilst the later partial award issued by the tribunal did state that it “revised” the Interim Award, its real effect was to take a step in reviewing the merits of the parties’ underlying dispute.


The Court held that at the final award stage an account would have to be taken: if CRW had been found to be overpaid, then an order for repayment could be made. However, in the meantime the Interim Award was final and binding as regards the issue of prompt payment in accordance with the DAB’s decision.




The Court’s analysis of different types of “award” is based on substance rather than form, or rather, terminology and the decision which followed this analysis is both a practical and sensible one, generally and in the context of the dispute resolution regime provided by the FIDIC form. The Interim Award enforced the obligation to make prompt payment of the adjudicated sum in accordance with the DAB decision: the substantive issue to be determined by the tribunal was how much, if anything, CRW was entitled to be paid and this would be a question of determining the final account, rather than varying the Interim Award. The Court’s decision is significant in the context of the efficacy of the dispute resolution mechanism established in FIDIC contracts and all similar contracts which provide for a multi-tier dispute resolution process whereby the decision of the first decision-making body is immediately contractually enforceable, but can be challenged by virtue of arbitral proceedings. Such mechanisms are a frequent feature in the construction industry.


The provisions of the Singapore International Arbitration Act on which the Court made its decision in this case are based on the UNCITRAL Model Law on International Commercial Arbitration, which has been adopted in many jurisdictions. Even if those countries where the arbitration law is not based on the Model Law (such as the English Arbitration Act 1996), the reasoning of the Court may nonetheless be persuasive.


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For further information, please contact:


Alastair Henderson, Partner, Herbert Smith Freehills

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Craig Tevendale, Partner, Herbert Smith Freehills

[email protected]


Michael Mendelblat, Herbert Smith Freehills

[email protected]


Hannah Ambrose, Herbert Smith Freehills

 [email protected]


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