1 In Originating Summons No 534 of 2016 (“OS 534/2016”), the plaintiff, [BQP] (“the Plaintiff”), appealed under s 10 of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”) against the jurisdictional ruling of the arbitral tribunal (“the Tribunal”) entitled “Decision on Bifurcated Jurisdictional Defences” (“the Award”) in Singapore International Arbitration Centre (“SIAC”) Arbitration No 197 of 2014, where the Plaintiff was the respondent, and the defendant, [BQQ] (“the Defendant”), was the claimant.

2 I heard oral arguments on 27 June 2017 and I gave my decision with 16-page brief oral grounds on 27 September 2017, dismissing the Plaintiff’s challenge on the Award.

3 The Plaintiff then sought leave to appeal against my decision under s 10(4) of the IAA in Summons No 4722 of 2017 (“SUM 4722/2017”). Its main ground for leave was that there was a question of general principle to be decided for the first time, and upon which further argument and a decision of a higher tribunal would be to the public advantage. This question was whether pre-contractual negotiations were admissible in evidence to construe written agreements – a point left open by the Court of Appeal (see Xia Zhengyan v Geng Changqing [2015] 3 SLR 732 (“Xia Zhengyan”), Sembcorp Marine Ltd v PPL Holdings Pte Ltd [2013] 4 SLR 193 (“Sembcorp Marine”) and Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd [2008] 3 SLR(R) 1029 (“Zurich Insurance”)).

4 At the hearing before me on 20 November 2017, I considered, with respect, that both parties’ written submissions did not fully address the issues. Having referred counsel to the Evidence Act (Cap 97, 1997 Rev Ed) (“the EA”), some articles and material facts, the most important being Procedural Order No 1 issued by the Tribunal and the SIAC Rules, counsel asked for an opportunity to look at the same and address them by way of written submissions. I agreed and directed that the parties file further simultaneous written submissions by 11 December 2017 and written reply submissions, if any, by 18 December 2017. The parties then informed me they did not need an oral hearing but were content for me to read their further submissions and to make my ruling.

5 Having considered the parties’ respective submissions, I dismiss the Plaintiff’s application in SUM 4722/2017 for leave to appeal, and now give the full grounds for my decision in two parts:

(a) the facts, findings and ruling of the Tribunal on jurisdiction, the Plaintiff’s challenge thereto, and my decision on its challenge, which is an expansion of my brief oral grounds; and

(b) the reasons for my refusing leave to appeal.

6 The following largely appears in the Award and are not really disputed.

7 The Plaintiff is a company incorporated in the British Virgin Islands (“BVI”). The Defendant is a company organised under the laws of Indonesia. The Plaintiff and the Defendant (“the parties”) and their affiliates have had commercial dealings in the forestry industry since at least 2003, in the course of which various disputes arose. ¹

8 The parties then decided to settle all their disputes and there were extensive negotiations over a short period of time resulting in a suite of agreements being executed.

9 On 30 August 2009, the group of companies to which the Defendant belongs and [CAH], an affiliate of the Plaintiff, entered into a Memorandum of Understanding (“August 2009 MOU”), with the aim of settling all outstanding disputes and issues arising out of the previous dealings between the parties and/or their affiliates.

10 On 18 September 2009, the Plaintiff and the Defendant signed a Master Agreement under which the Defendant agreed, in gist, to sell to the Plaintiff:

for monetary consideration of US$8 million and the supply of 450,000 cubic metres of round logs over a period of three years. The Master Agreement contemplated implementation through various separate agreements, both onshore (in Indonesia between Indonesian entities) and offshore (between the Defendant and non-Indonesian entities).

11 Recital (C) of the Master Agreement states:

Recital (E) states:

12 In addition to the August 2009 MOU being annexed to the Master Agreement as Annex 4, there were three other Annexes (the “MOAs”) attached:

13 Relevant clauses of the Master Agreement include:

14 Relevant clauses of the JOA MOA include:

15 The Shares MOA, which closely tracks the JOA MOA, was signed by the parties on 18 September 2009 and as noted above, attached as Annex 2 to the Master Agreement. Its recitals (A) and (B) state that the Defendant and affiliates are to sell all the shares in [NUS] to the Plaintiff.

16 Relevant clauses of the Shares MOA include:

17 The RLS MOA, attached to the Master Agreement as Annex 3, differs in several respects from the JOA MOA and the Shares MOA.

18 The purpose of the RLS MOA is set out in Clause 3, “ROUND LOGS Supply”:

19 Certain “indicative terms” are set out in the clauses that immediately follow, including:

20 Clause 10A, “Log Shortfall Corporate Guarantee”, of the RLS MOA contemplates cross-corporate guarantees:

21 Clause 13, “Binding Legal Agreements”, which is central to the issue in the arbitral and these proceedings, states:

22 Clause 14, “Governing Law”, provides for Singapore law:

23 Clause 16, “Arbitration”, calls for SIAC arbitration:

24 Clause 18, “Termination”, provides:

25 The Plaintiff nominated [SUM] to supply the round logs. On 10 December 2009, the Defendant and [SUM] entered into the Merchantability Wood Agreement (“MWA”) for delivery of round logs. The language of the MWA is Bahasa Indonesia, with the title on at least one English translation appearing as “Agreement of Selling Woods”. The MWA, and within it Cl 20 (set out at [28] below), forms part of the critical issue before the Tribunal and these proceedings.

26 Clause 2 of the MWA sets the type of wood to be delivered; Clause 3 and Appendix A, the specifications; Clause 4, the quality; Clause 5, the place of delivery and loading schedule; Clause 6, the price of wood; and Clause 8, the terms of handover inspection.

27 Clause 11, “Penalties/Fines”, provides:

28 Clause 20, “Governing Law and Disputes”, provides for Indonesian governing law and Indonesian National Board of Arbitration (“BANI”) arbitration:

29 It can be seen that the overall transaction was structured so that the Plaintiff fulfilled its total consideration obligations to the Defendant by way of: (i) payment of US$4 million for the Forestry Licence and JOA Interest under the JOA MOA; (ii) payment of US$4 million for the [NUS] Shares under the Shares MOA; and (iii) supply of the round logs in accordance with the RLS MOA.

30 However, for accounting and other reasons, including the uncertainty in relation to regulatory issues, the MWA required the Defendant to pay for the round logs delivered, but those payments were effectively neutralised through a separate agency relationship and Commission Entitlement Agreement (“CEA”) dated 18 September 2009 between the Plaintiff and [PER], an affiliate of the Defendant. The CEA was therefore entered into to neutralise the Defendant’s payments under the MWA via the payment of a commission to [PER]. ²

31 On or around 10 December 2009, the Defendant and the Plaintiff’s second nominated company, [LES], entered into a performance bond. Under the terms of the Performance Bond, [LES] agreed to guarantee [SUM]’s performance of its obligations under the MWA. Clause 4(a) of the Performance Bond (translated from Bahasa Indonesia) states:

32 Disputes arose after the signing of these agreements. The Defendant alleged, inter alia, that the Plaintiff breached the RLS MOA that was annexed to the Master Agreement. Both these agreements contained Singapore International Arbitration Clauses (“SIAC”) arbitration clauses. On 3 November 2014, the Defendant and [PER] commenced SIAC arbitration proceedings against the Plaintiff and [SUM] in Singapore. The Defendant subsequently withdrew both [PER] and [SUM] as parties from the arbitration. ³

33 In its Statement of Claim, the Defendant alleged breaches of the Master Agreement, the RLS MOA, the CEA and the Reconciliation Deed. The Defendant made the following eight claims (“the Identified Claims”) under the RLS MOA: ⁴

34 The Plaintiff objected to the Tribunal’s jurisdiction on the grounds that (i) the RLS MOA had been superseded by the MWA, which contains a BANI clause, and disputes should be resolved by BANI arbitration in Indonesia, or in the alternative, (ii) the majority of the Identified Claims properly fall only under the MWA and hence under the BANI arbitration clause.

35 On the Plaintiff’s application, the Tribunal bifurcated the arbitration into jurisdiction and merits phases. The Tribunal framed the question for resolution in the jurisdictional phase as: “Does the Tribunal have jurisdiction, based on the arbitration agreement in the [RLS MOA], to adjudicate the Identified Claims?” The parties agreed to break this question into two jurisdictional issues:

(a) Jurisdictional Issue 1: Has the MWA superseded the RLS MOA or are the MWA and RLS MOA both valid and separately enforceable?

(b) Jurisdictional Issue 2: Even assuming that the MWA has not superseded the RLS MOA, are the Identified Claims properly brought on the basis of the RLS MOA within the scope of the SIAC arbitration agreement or are they in fact premised on the MWA?

36 On 29 April 2016, following a two-day hearing, the Tribunal issued the Award. ⁵ As to the first jurisdictional issue, the Tribunal determined that the MWA had not superseded the RLS MOA, which remained valid and separately enforceable. As to the second jurisdictional issue, the Tribunal took the view that this could only be definitively determined at the merits phase and decided to carry these claims into the merits phase without prejudice to the Plaintiff’s jurisdictional defence that some of these fall properly under the MWA. The Plaintiff does not challenge the Tribunal’s decision on this secondary issue before me.

37 The essential question is therefore whether the RLS MOA (dated 18 September 2009) has been superseded by the MWA (dated 10 December 2009). If it has, it follows that the Tribunal lacks jurisdiction over the claims ⁶ submitted to it pursuant to an arbitration clause in the RLS MOA as the MWA provides for arbitration in Indonesia under BANI pursuant to Cl 20(d). If the RLS MOA has not been superseded by the MWA, then the Tribunal has, subject to the second jurisdictional issue, jurisdiction to hear the disputes under Cl 16 of the RLS MOA which provides for SIAC arbitration in Singapore.

38 At the heart of this dispute is the interpretation or construction of Cl 13 of the RLS MOA (“Cl 13”), the material part of which I set out once more for convenience:

39 In brief, the Plaintiff interprets Cl 13 to mean that once the MWA, being the “definite legal agreement”, was signed, the RLS MOA ceased to be in force and was no longer valid and binding on the parties. The Plaintiff contends, inter alia, that this is because: ⁷

(a) The effect of Cl 13 is that the RLS MOA will cease to be in force upon the signing of a “definite legal agreement”. The “definite legal agreement” in Cl 13 refers to an onshore legal agreement. The MWA, being an onshore agreement, therefore superseded the RLS MOA by virtue of Cl 13.

(b) In the context of the overall commercial arrangements between the parties, it was clear that the RLS MOA was always intended to be superseded by a more detailed implementation agreement.

(c) The differences and inconsistencies between the RLS MOA and the MWA suggest that the two agreements were not intended to co-exist in parallel, and that one was meant to replace the other.

The Plaintiff’s contentions are set out at [119]–[135] of the Award. ⁸

40 In brief, the Defendant disagrees and interprets the phrase “definite legal agreement” in Cl 13 as referring only to a subsequent offshore legal agreement entered into between the parties. Since the MWA is an onshore legal agreement, and no subsequent offshore legal agreement was entered into, the RLS MOA remained in force and continued to be valid and binding on the parties. As such, the Identified Claims were validly brought under the SIAC arbitration agreement in Cl 16 of the RLS MOA. ⁹ The Defendant’s contentions are set out at [136]–[149] of the Award. ¹⁰

41 The rival submissions before the Tribunal and before me illustrate that the meaning of the phrase “definite legal agreement” in Cl 13 is not plain or obvious on a perusal of that clause and that phrase alone. In particular, it does not indicate whether the “definite legal agreement” was to be an “onshore” or an “offshore” legal agreement. It is clear that one has to look to the context to derive some assistance. Some of that relevant context must include the provisions within the RLS MOA and the MWA, the various other agreements and their provisions as well as the factual matrix within which the parties entered into a suite of agreements with the aim of settling the disputes that had arisen over their commercial dealings since at least 2003. Those agreements were both “onshore” and “offshore” agreements. The former category contained BANI arbitration clauses and the latter SIAC arbitration clauses. Each party had subsidiaries and affiliates in Indonesia and the BVI. The Plaintiff explained that “offshore” agreements refer to agreements between the Defendant and a non-Indonesian entity chosen by the Plaintiff’s affiliate, [CAH], which would be governed by Singapore law, and the “offshore” agreements would then be implemented by “onshore” agreements between Indonesian companies and would be governed by Indonesian law. ¹¹

42 Given the rival submissions before me, the first important thing of note is that before the Tribunal, the parties’ documentary and witness testimony focused on the negotiating history. The Award notes this at [81] and then deals comprehensively with the witness and documentary evidence placed before the Tribunal. ¹²

43 I also note that it was the Plaintiff’s Statement of Defence on Jurisdiction dated 4 May 2015 which, besides relying on the provisions of the agreements, first pleaded: ¹³

(a) the pre-contract negotiations by referring to the emails between the parties dated 9 and 15 September 2009 to show the parties’ understanding of the structure and organisation of onshore versus offshore agreements (see [16], [29]); and

(b) the “drafting history” of the RLS MOA (see [31]–[36] and [37], especially the references to “evidence”).

In contrast, the Defendant’s Statement of Claim did not refer to any pre-contractual negotiations. Also it was the Plaintiff’s Witness Statement of [SI] that first placed these pre-contract negotiation emails before the Tribunal.

44 I find that the Tribunal has correctly stated the respective burdens and standard of proof, viz, that while it is ultimately the Defendant’s burden to prove jurisdiction, the Plaintiff carries the burden to prove, on a balance of probabilities, the facts supporting its affirmative jurisdictional defences. ¹⁴

45 The Tribunal also analysed the evidence, which as noted above, included the pre-contract negotiations, and came to its conclusions. I agree with its analysis and conclusions and set out the following relevant evidence, much of which is taken from the Award.

46 The relevant backdrop to the parties’ negotiations to settle their disputes includes the nature of the parties in this dispute. The Defendant states that the parties and their affiliate companies have had commercial dealings in the forestry industry since 2001. ¹⁵ The Plaintiff states that the parties are large commercial institutions with significant experience in the Indonesian timber business and at all relevant times the parties were advised by their respective legal counsel which included the following lawyers:

47 [SI] is Legal Vice-President of [RAA] (a company associated with the Plaintiff) who assisted the Plaintiff in drafting the Master Agreement and the MOAs. [CH], Financial Controller at [KAA] and Personal Assistant to [ED], Chief Commissioner of the Defendant, assisted the Defendant in reviewing the Master Agreement and the MOAs.

48 The Tribunal’s chronology of the facts starts at 2 September 2009, when [SI] sent the first drafts of the JOA MOA and the Shares MOA to [CH]. At that time, the draft JOA MOA and the draft Shares MOA carried the title of “Memorandum of Understanding” (“MOU”). The title was eventually amended to “Memorandum of Agreement” as reflected in the final agreements.

49 In the first drafts of the JOA MOU and the Shares MOU, Clause 1.1, “Effective Date”, read:

50 Clause 6, “Definitive Legal Agreements”, of the first draft JOA MOU and (in similar language) the first draft Shares MOU read:

51 In the first drafts, Clause 10.4 of the JOA MOU and (in similar language) Clause 11.4 of the Shares MOU, “General”, read:

52 On 3 September 2009, one day after sending the draft JOA MOU and draft Shares MOU, [SI] sent via email the first draft of the RLS MOU to [CH] and others. Like the other drafts, what became the RLS MOA was referred to at that time as an MOU, in particular, the “Memorandum of Understanding Wood Supply” (“RLS MOU”) and not as an MOA.

53 Clause 3, “Wood Supply”, of the first draft RLS MOU read:

and Clause 13, “Binding Legal Agreements”, of that draft read:

54 Two days later, on 5 September 2009, [SI] sent an email to [CH] and others attaching the first draft of the Master Agreement with the annexed MOUs.

55 On 7 September, [SR], a representative of the Plaintiff, sent [CH] and others an email attaching a draft “Wood Supply Onshore Agreement”. The email stated:

56 In an email dated 10 September 2009, [SA], external corporate counsel from Messrs Shook Lin & Bok LLP assisting the Defendant in drafting the Master Agreement and the MOUs, sent to [SI] and others a revised draft of the Master Agreement and MOUs. [SA] stated in this email:

57 The revised draft attached to [SA]’s email contained an amendment adding two paragraphs to Cl 13 “Binding Legal Agreements” of the RLS MOU (the Defendant’s additions underlined):

58 In that same set of revisions, the Defendant also proposed that Clause 5 of the Master Agreement be amended to read (the Defendant’s amendments underlined):

59 The next day, on 11 September 2009, [SI] sent an email to [SA], copied to [CH] and others, attaching revised drafts notated with comments by the Plaintiff. In relation to Clause 13 of the draft RLS MOU “Binding Legal Agreements”, which read:

The Plaintiff commented:

60 On 14 September 2009, [SI] sent an email to [SA] attaching another revision of the Master Agreement, which changed the title of the annexed draft JOA MOU and draft Shares MOU by referring to the respective agreements as a “Memorandum of Agreement” as opposed to an “MOU”. The title to the annexed draft of what became the RLS MOA remained “MOU”. The Plaintiff added the following comment to Clause 6, “Definitive Legal Agreements”, in the draft JOA MOA:

I pause to note that the italicised word “onshore” above is clearly an error and should read “offshore”.

61 The Plaintiff’s prior comment remained in Clause 13 of the RLS MOU, “Binding Legal Agreements”, although the phrase “ISSUES TO CONSIDER” was deleted:

62 On 16 September 2009, [SA] sent an email to [SI], copied to [CH] and others, which attached a revised draft of the RLS MOA with the title changed from MOU to Memorandum of Agreement. The Plaintiff’s comment (see [61] above) that the “‘definitive legal agreement’ refers to a definitive offshore legal agreement” was deleted in this draft.

63 In the same email chain, [SA] requested a cross-corporate guarantee to be arranged by the Plaintiff, which [SI] said the Plaintiff was agreeable to.

64 On 17 September 2009, [SI] sent to [SA], [CH] and others a further revised draft of the Master Agreement, in which the Plaintiff commented with respect to Clause 6 of the JOA MOA (the Plaintiff’s comments italicised and in bold):

65 In an email on the same day, [CH] posed a question in relation to the Plaintiff’s comment to Cl 6 of the JOA MOA (the Defendant’s comments underlined):

66 On 18 September 2009, [SI] circulated an email internally in the Plaintiff, attaching revisions of the Master Agreement and the annexed MOAs that amended Clauses 1, 6.2 and 6.3 of the draft JOA MOA and the draft Shares MOA (see the earlier draft language at [49] and [50] above) with the language ultimately used in the final versions. Clauses 6.2 and 6.3 were replaced with a new Clause 6.2. The language in Clause 13 of the draft RLS MOA (see the earlier draft language at [53] above) remained unchanged. ¹⁷ According to the Plaintiff, it printed hard copies of these amended versions of the Master Agreement and annexes for the Defendant to review.

67 On 22 September 2009, [SR] sent an email to [CH] and others, attaching the checklist the Plaintiff had prepared to track the various agreements being signed. That checklist listed the JOA MOU, Shares MOU and RLS MOU under the Master Agreement as Item 1, signed on 18 September 2009.

68 With respect to negotiating a performance bond, [CH] made the following comments by email dated 14 October 2009:

69 On 3 November 2009, [PH], Legal Manager and colleague of [SI] at [RAA], responded to [CH]’s email by relaying comments from [FCA], a company affiliated with the Plaintiff:

70 In a separate email on 3 November 2009, [MU], a representative of the Defendant, wrote to [PH], [SI] and others, stating:

71 On 7 December 2009, [CH] wrote to [TJ], the Indonesian counsel of the Plaintiff’s Indonesian affiliates, and [SR]:

72 After execution of the full suite of agreements, the parties and their affiliates referenced them in various ways. For example, on 8 January 2010, after the MWA had been executed, [PER] and the Plaintiff signed an addendum to the CEA referring to round log supply under the RLS MOA:

73 In connection with the Defendant’s alleged falling behind on payment for wood delivered, the minutes of a meeting on 8 April 2011 stated:

74 On 16 November 2011, the Plaintiff wrote to the Defendant:

75 On 20 December 2011, the Plaintiff wrote to the Defendant:

76 And on 21 December 2011:

77 And on 5 June 2012:

78 As noted above, the witnesses were extensively cross-examined on the pre-contract emails passing between them. The Tribunal carefully considered all the factual material before it and came to its conclusion on the jurisdictional issues. I agree with the Tribunal.

79 First, in considering the text alone, although the phrase “definite legal agreement” by itself does not indicate whether it refers to an offshore or onshore agreement, it is followed by another phrase: “this MOA shall continue in force” [emphasis added]. If “this MOA” was to continue in force under Cl 13 absent entry into another agreement, it would tend to follow that the contemplated new “definite legal agreement” must also be another offshore agreement. That new offshore definite legal agreement would then logically supersede the existing offshore RLS MOA.

80 Turning to the context in which the RLS MOA was entered into, I note that the parties entered into a whole suite of agreements in settlement of their disputes. It was not a simple but a rather complex settlement with different parts and of high value. The agreements encompassed both onshore and offshore agreements. The need for some onshore agreements in relation to aspects of the forestry industry was obvious as there were regulatory considerations. It is accepted that the RLS MOA is an offshore agreement, being entered into by an Indonesian and a BVI entity and the parties did not enter into any other offshore agreement after the RLS MOA was concluded. Considering the context in which the RLS MOA was entered into, it confirms the construction that the phrase “definite legal agreement” must have been, on a balance of probabilities, an offshore agreement.

81 Secondly, when considering the Master Agreement for context, Cl 5 confirms this construction. To recapitulate, Cl 5 states:

82 The words chosen by lawyers in drafting the Master Agreement were clear – “will be implemented by”, ie, the RLS MOA would be performed by or carried into effect or given effect to by an onshore agreement. They did not use the word “supersede” as they did elsewhere, as in the first draft of Clause 1.1 of the JOA and Shares MOAs (see [49] above) which referred to “the date of execution of definitive legal agreements superseding this MOU” [emphasis added]. These parties were aware in drafting these agreements of the concepts of “supersession” and “implementation”. The extra detail in the MWA confirms this process of “implementing” the RLS MOA’s comparatively general provisions.

83 The Tribunal also stated, at [161] of its Award, and I agree, that Cl 5 of the Master Agreement was consistent with the parties’ dual track onshore offshore structure. Cl 5 expressly states in the first sentence their agreement to implement the RLS MOA by finalising an onshore wood supply agreement. In the second sentence, they agree to “enter into” a binding legal agreement “substantially on the terms” of the RLS MOA. Given the industry they were in, the Plaintiff, as a BVI entity, could not have entered into a binding onshore agreement and hence the binding legal agreement that they agreed to “enter into” in the second sentence of Clause 5 must refer to a subsequent offshore agreement. It follows that by Cl 13 of the RLS MOA, the parties were referring to a subsequent and more definite offshore agreement.

84 Thirdly, the RLS MOA contains several provisions describing the direct role of the Plaintiff in connection with the round log supply to the Defendant and this suggests that the MWA is intended to operate in tandem with the RLS MOA, as opposed to supersede and replace it. The Defendant correctly pointed out that Cl 3 of the RLS MOA, “ROUND LOGS supply”, expressly states that if the Nominated Companies fail to supply the agreed volume of round logs, “[the Plaintiff] shall provide the round logs from its concessions within [Sumatra]” [emphasis added]. Similarly, but admittedly less directly, Cl 8(b), “Round Logs Grading, Scaling”, places an obligation on “[the Plaintiff] (or the Nominated Companies)” [emphasis added] to render full cooperation in scaling and grading the round logs. Also Cl 10, “Compensation for underperformance”, provides that if the quarterly supply volume of round logs is not met “due to the negligence or default of the obligations under this MOA of [the Plaintiff] and/or the Nominated Companies”, then “[the Plaintiff] and/or the Nominated Companies shall compensate [the Defendant] for the amount of the shortfall” [emphasis added].

85 Fourthly, when we compare the parallel wording in Cl 6, “Definitive Legal Agreement”, of the JOA MOA and the Shares MOA, we find that Cl 6.2 expressly mentions a binding onshore legal agreement:

whereas this language is missing in the RLS MOA. Whilst the Plaintiff contends that this shows that the Defendant did not intend to secure a double track regime comprising offshore and onshore agreements for the RLS MOA, as it did for the JOA and Shares MOAs, I agree with the Tribunal that in fact it shows the contrary, viz, that the approach for two of the MOAs under the parties’ Master Agreement implicitly supports interpreting Cl 13 of the RLS MOA as being focused on a subsequent offshore MOA superseding the RLS MOA rather than a parallel onshore agreement like the MWA.

86 The Plaintiff submitted that [CH]’s testimony showed that Cl 6.3 of the JOA MOA and the Shares MOA “inspired” the Defendant’s insertion on 10 September 2009 of the new paragraphs in Cl 13 of the RLS MOA and the Defendant saw fit to retain Cl 13 even after Cl 6.3 had been deleted from the JOA MOA and the Shares MOA. Therefore, according to the Plaintiff, the retention of Cl 13 of the RLS MOA by the Defendant was deliberate as a different regime from that in the JOA MOA and Shares MOA was intended. In response to the Tribunal’s questions, the Plaintiff candidly offered an explanation at the hearing for this “different regime”, viz, the Plaintiff is the beneficiary under the JOA MOA and the Shares MOA as the purchaser of the Forestry Licence, JOA Interest and [NUS] Shares whereas the Defendant is the beneficiary of the round logs supply commitment in the RLS MOA. ¹⁸ Like the Tribunal, I am of the view that this explanation for the difference in wording between Cl 6 of the JOA and Shares MOAs, and Cl 13 of the RLS MOA at best shows that the difference was probably missed by the Defendant which thus failed to make a similar amendment to the RLS MOA. I note that the current wording of Cl 6.2 of the JOA and Shares MOAs were last minute amendments introduced on 18 September 2009 the day of the signing, at 11.06am. ¹⁹ The earlier drafts of Cl 6 of the JOA and Shares MOAs were substantially similar to Cl 13 of the RLS MOA. As late as 17 September 2009 (the day before the signing), Cl 6 of the JOA MOA and (in similar language) Cl 6 of the Shares MOA read: ²⁰

87 I agree with the Tribunal that while Cl 13 of the RLS MOA would have benefitted from language like that in Cl 6 of the other MOAs, the Plaintiff’s candid explanation shows, at best, that the Defendant was out-drafted with the final Cl 6 of the JOA and Shares MOAs. However I would note that even in this form, Cl 6 was clearly intended by the parties to refer to a future offshore agreement, see the Plaintiff’s comments on Cl 6 at [60] and [64] above. The reference in Cl 6 to an “onshore” agreement was added to make this more explicit, more clearly sorting out offshore from onshore agreements, and its absence from Cl 13 is therefore inconclusive. In my judgment, the absence of the word “onshore” from Cl 13 does not change the reasonable interpretation of Cl 13 of the RLS MOA.

88 Fifthly, given that the phrase “definite legal agreement” presents an ambiguity in the context of the rival interpretations advanced by the parties, ie, whether it refers to an offshore or onshore agreement, I turn, as the Tribunal turned, to the negotiating history which constituted a large percentage of the factual record.

89 The evidence, as set out above, shows that the parties drafted and executed a large number of agreements in a comparatively short period of time. One thing stands out clearly from these negotiations, viz, the Plaintiff originally took the unequivocal position that phrase “definite legal agreement” in Cl 13 meant a different, and presumably more detailed, offshore agreement to follow the offshore RLS MOA (see [59] and [61] above).

90 The Tribunal did not accept, as I do not, the Plaintiff’s contention that this meaning somehow silently evolved into a “definite legal onshore agreement”. If so, one would expect to see documents, documented discussions, email exchanges or some credible evidence that the intention changed and that change was consistent with good commercial sense, given that the parties were exchanging emails almost daily and expressly discussing draft onshore agreement language for Cl 6 of the JOA and Shares MOAs. I also agree with the Tribunal that the technical switch of the title from MOU to MOA, even though it occurred later for the RLS MOA than the JOA and Shares MOAs, could not have somehow added “onshore” to the phrase “definite legal agreement” in Cl 13 of the RLS MOA.

91 Like the Tribunal, I also find the Plaintiff’s argument of silent evolution undermined by its acknowledged concession at the hearing before them, that Cl 18(b) of the RLS MOA (“Termination”) must have survived post-MWA, for its own contractual protection. This is inconsistent with its original case that the entire RLS MOA had been superseded by the MWA and if “definite legal agreement” in Cl 13 meant only an onshore agreement, then with the execution of the MWA some three months after the RLS MOA, given that there were no obligations that had to be performed by either party in the interim, then nothing in the RLS MOA survived.

92 I also note that the Plaintiff has now changed its case regarding Cl 18(b) of the RLS MOA. To recapitulate, Cl 18 essentially ensures that the Plaintiff would not be put in the position of having to deliver the same amount of round logs to the Defendant despite not having acquired the Forestry Licence and/or [NUS] shares. While it had previously taken the position before the Tribunal that Cl 18(b) was somehow ‘carved out’ and survived the supersession of the RLS MOA, the Plaintiff now argued, before me, that Cl 18(b) would not survive, and is not required for the Plaintiff’s protection because its contractual obligations under the RLS MOA would be discharged upon the MWA coming into effect, while the Nominated Companies could simply insist on payment for the round logs supplied under the MWA. ²¹ Be that as it may, the point remains that there is no credible evidence on which to found the Plaintiff’s argument that the parties’ intentions regarding the meaning of “definite legal agreement” had undergone such a drastic evolution.

93 Indeed, it is difficult to see why the parties would have signed the RLS MOA on 18 September 2009, if some three months later, it was going to be superseded, given there were no obligations to be performed by either party in the meantime. ²² Moreover, had the parties intended the RLS MOA to be superseded by the MWA, they would have referred to the MWA in the CEA. Instead the CEA was stated to terminate “upon the termination or completed performance of the [RLS MOA]”. ²³ If the RLS MOA was superseded as the Plaintiff contends, then the CEA must also have been terminated. That cannot have been intended by the parties, because the purpose of the CEA was to neutralise payments due from the Defendant for the round log supply under the MWA. It is not disputed that the Defendant has never paid [SUM] for the supply of round logs under the MWA. ²⁴ If the CEA were terminated, the Defendant would be put in the disastrous position of having to pay the Plaintiff about US$10m ²⁵ for the logs supplied under the MWA, over and above having transferred the Forestry Licence and [NUS] Shares.

94 Sixthly, the Plaintiff submits that Cl 8 of the Master Agreement, which permits novation, shows that the Defendant did not intend the Plaintiff to remain separately liable under the RLS MOA once an onshore agreement was executed between the Defendant and the Plaintiff’s Nominated Companies. ²⁶ The Plaintiff sought to rely on an e-mail sent on 10 September 2009 by [SA], corporate counsel assisting the Defendant in drafting in the Master Agreement and MOUs. ²⁷ The e-mail expressed a preference to have an Indonesian party as the purchaser or contracting entity, and to that end proposed an assignment/novation clause in lieu of a nomination clause (see [56] above). The Plaintiff submitted that this showed that the parties did not intend the Plaintiff to remain separately liable under the RLS MOA after an onshore agreement was entered into. I find it would be inappropriate to draw any conclusion about how Cl 13 of the RLS MOA should be interpreted from [SA]’s comments about a novation clause in the Master Agreement. The nexus between the two was not strong enough to support such an inference. Moreover, the Plaintiff’s submission is flatly contradicted by the JOA and Shares MOAs, in respect of which the Plaintiff remains liable notwithstanding the execution of onshore agreements. In any event it is not disputed that neither party novated its contractual rights and obligations.

95 The Plaintiff also submitted that the corporate guarantee arrangements show that the Defendant did not intend the Plaintiff to remain liable after the MWA came into force. Clause 10A of the RLS MOA calls for cross-corporate guarantees between the Defendant and the Plaintiff’s Nominated Companies, and the performance bond was entered into between the Defendant and [LES]. But this again is inconclusive: just because the Defendant sought certain contractual protections under the MWA from the Nominated Companies does not mean that it did not also intend the Plaintiff to remain liable under the RLS MOA.

96 Finally, I do not see any difficulty with the RLS MOA and the MWA concurrently having legal effect. Many of the so-called inconsistencies identified by the Plaintiff are simply instances of the MWA containing more detail than the RLS MOA. Where there are true inconsistencies, one possible resolution may be in Cl 19(d) of the MWA where it is provided that the MWA shall prevail in the event of contradiction, incompatibility or difference with other agreements. ²⁸ However that is something that the Tribunal will deal with and decide at the merits hearing; what I state here is just in answer to an argument put forward by the Plaintiff for the purposes of this jurisdiction challenge. For the avoidance of doubt, nothing I say here is to bind the Tribunal in the merits or any other phase of the arbitral proceedings. Notwithstanding that Cl 3 of the RLS MOA uses the phrase “indicative terms”, the RLS MOA contains agreement on essential matters in sufficient detail to constitute a binding agreement. In any event, the Plaintiff does not dispute that the RLS MOA was a binding agreement; it only says that it was superseded by the MWA.

97 Like the Tribunal, and for the reasons set out above, I agree that Cl 13 of the RLS MOA refers to a definite offshore legal agreement and that the Defendant’s entry into the onshore MWA did not supersede the RLS MOA in its entirety or in part. The RLS MOA and the MWA co-exist and the RLS MOA is valid and separately enforceable from the MWA. The Tribunal therefore had jurisdiction to hear these disputes. The scope and impact of the separate enforceability of the RLS MOA is a different matter. The Tribunal accepts that it has jurisdiction only over disputes brought under the RLS MOA, and to decide liability for the alleged breaches of the RLS MOA and not the MWA.

98 I find it germane to point out that the parties appeared to take the admissibility of the pre-contractual negotiations for granted during the proceedings before the Tribunal. The Defendant points out that: (i) the Plaintiff had never objected to the admissibility of evidence of the negotiating history of the agreements, and (ii) the Plaintiff had itself relied on such evidence to advance its case. ²⁹

99 In reply, the Plaintiff highlighted certain extracts from the transcripts of the jurisdictional hearing before the Tribunal purporting to show that it had indeed made objections to the admission of the pre-contractual negotiations. ³⁰

100 On the first day of the hearing, Mr Paul Tan (“Mr Tan”), counsel for the Plaintiff, said: ³¹

101 In relation to the second day of the hearing, the Plaintiff highlights the following passages: ³²

102 In my view, the exchanges cited above do not amount to an objection against the admissibility of evidence of pre-contractual negotiations:

(a) First, Mr Tan did not expressly object to the admission of evidence of the parties’ negotiations. For example, Mr Tan only stated that “courts are hesitant” to have reference to evidence of negotiations, not that courts cannot have reference to such evidence, nor that the evidence of negotiations put before the Tribunal in those proceedings was inadmissible. The exchanges cited above disclose, at best, words of caution to the Tribunal against placing heavy weight on evidence of pre-contractual negotiations, and not a resolute objection to the admissibility of the evidence.

(b) Secondly, these words of caution seem directed at the proper weight that should be accorded to the evidence, and not their admissibility; Mr Tan spoke of the proper “emphasis” that should be placed on the evidence, and the “effect” that that evidence should have on the interpretation of the RLS MOA.

I find that the admissibility of the pre-contractual negotiations was accepted by both parties.

103 The Defendant’s second point is that the Plaintiff had itself relied on the evidence of pre-contractual negotiations to advance its case:

(a) As early as the Plaintiff’s Witness Statement of [SI] dated 4 May 2015, reliance was placed on several emails from [SA], the Defendant’s external legal counsel, to advance its submission that the round logs supply was to be implemented by way of an onshore agreement only. The Plaintiff stated that this intention was “confirmed by the drafting history of the RLS MOA”, and referred to draft agreements circulated by [SA] in emails dated 9 and 10 September 2009. ³³ In the course of the arbitral hearing, Mr Tan cross-examined the Defendant’s witness, [CH], on [SA]’s email of 9 September 2009 (see also references in the Plaintiff’s Statement of Defence dated 4 May 2015 at [43] above). ³⁴

(b) In the Plaintiff’s Opening Statement on Jurisdiction before the Tribunal, dated 29 February 2016, the Plaintiff positively relied on the “drafting history of the RLS MOA”: ³⁵

(c) In [RY]’s Affidavit dated 27 May 2016, the Plaintiff referred to evidence of the parties’ negotiations (eg, email correspondence between the parties’ respective representatives, draft agreements, etc) as “The Relevant Documents”. The Plaintiff explained: ³⁶

104 In response to my question during the hearing on 20 November 2017 as to why he had cross-examined the Defendant’s witnesses on the issue of pre-contractual negotiations, Mr Tan said that he had done so because the Defendant had relied heavily on various comments on the draft agreements, and he therefore had to cross-examine the Defendant’s witnesses to show that those comments were taken out of context. Essentially, the Plaintiff’s position is that it had only relied on the pre-contractual negotiations to the extent that it was necessary to meet the Defendant’s case. ³⁷

105 With respect, I find this explanation to be implausible given the matters set out above. I note that the Plaintiff had referred to and relied on [SA]’s emails and comments on the draft agreements as early as the first round of witness statements (see [103(a)] above), which was prior to any witness statements being filed by the Defendant. ³⁸ I have also noted, at [43] above, the Plaintiff’s references to the pre-contract emails and “drafting history” of the RLS MOA in its Statement of Defence on Jurisdiction dated 4 May 2015.

106 For the reasons discussed above, I find that the RLS MOA was not superseded by the MWA.

107 I now give my reasons for the dismissal of the Plaintiff’s application in SUM 4722/2017 seeking leave to appeal against my decision on jurisdiction.

108 It is not disputed that an applicant seeking leave to appeal must demonstrate that there exist questions falling within at least one of the following three limbs (Lee Kuan Yew v Tang Liang Hong [1997] 2 SLR(R) 862 at [16]):

109 The Plaintiff submits that there are three questions which fall into one or more of the limbs enumerated above: ³⁹

110 I find that question (b) and question (c) are, in essence, appeals against the arbitral tribunal’s and my construction of the clauses within the special facts of this case. Given the central issue in this case and the contextual approach adopted, such questions are very fact-sensitive and the factual context in which they arise are unique to these parties. We have before us two groups of companies who have had commercial dealings in the forestry industry since 2001, or at least 2003, who, with the aim of settling all disputes between them, entered into a slew of specially drafted agreements. In doing so, they were advised and assisted by legally qualified persons who attended to the drafting of these bespoke agreements.

111 Additionally, in relation to question (b), the entities to the agreements, and therefore the parties governed by the two arbitration clauses, are dissimilar. The RLS MOA was entered into between the Plaintiff and the Defendant but the MWA was entered into between [SUM] and the Defendant. The Plaintiff also seems to advance the ground that if the MWA did not supersede the RLS MOA and the latter therefore remains valid and binding as well, then the claims that were brought under the RLS MOA should be brought under that MWA. However, the Tribunal has not made a decision on this issue as there were insufficient facts to do so and instead reserved it to the merits hearing.

112 Question (c) is again without any merit. It was common ground before the Tribunal and before me that “definite legal agreement” should either be read as a definite offshore legal agreement or a definite onshore legal agreement. It cannot be right that the Plaintiff can now ask for leave to appeal on the ground that the arbitral tribunal and the court strayed into rectification by saying that “definite legal agreement” means an offshore legal agreement and when they contend it should read “onshore” legal agreement.

113 As to question (a), the Plaintiff submits that the question of whether pre-contractual negotiations are admissible falls within the First Time and Public Importance Limbs. The Plaintiff points out that this question was left open in the Court of Appeal decisions of Zurich Insurance (at [132(d)]), Y.E.S. F&B Group Pte Ltd v Soup Restaurant Singapore Pte Ltd [2015] 5 SLR 1187 (“Soup Restaurant”) (at [39]–[40]), Xia Zhengyan (at [62], [69]) and Sembcorp Marine (at [75]). ⁴⁰ It further submits that this is an issue of public importance due to its potential impact on the conduct of pre-contractual negotiations; for example, a rule of permitting general admission of such evidence may result in defensive practices being adopted. ⁴¹

114 In its Supplementary Submissions for Leave to Appeal, the Plaintiff explained that question (a) could be described in terms of three sub-issues, all of which fall within the First Time and Public Importance Limbs: ⁴²

115 In relation to question (a), I accept that at first blush, the question of whether an absolute exclusionary bar against the admissibility of pre-contractual negotiations exists is one of great public importance which has not yet been decided by the Court of Appeal. This was made clear in the judgments of Zurich Insurance (at [132(d)]), Soup Restaurant (at [39]–[40]), Xia Zhengyan (at [62], [69]) and Sembcorp Marine (at [75]). However, there is an important difference because these were all cases commenced in the Singapore courts, ie, domestic litigation, whereas these proceedings before me arise from an international arbitration and a challenge to an award on jurisdiction. It comes before our courts because Singapore is the seat, thereby making our courts the curial court.

116 I brought counsel’s attention to a number of articles which debate whether the admissibility of evidence is an evidentiary rule or whether it is a substantive rule in international arbitration. At the first hearing for leave to appeal, the authorities relied upon by counsel were all cases involved in domestic litigation.

117 In considering these articles, authors like Jonas Rosengren in “Contract Interpretation in International Arbitration” (2013) 30(1) Journal of International Arbitration at p 6, put forth the view that the current role of exclusionary rules of common law systems stirs up confusion in international arbitration. The learned author says the proper characterisation of these rules is a fundamental issue. He opines that:

118 There are authors who hold the contrary view that the admissibility of evidence is an evidentiary, not substantive rule, see Jeffrey Waincymer, Procedure and Evidence in International Arbitration (Wolters Kluwer 2012, at para 10.16, although he seems to moderate his view in the context of parol evidence at para 10.16.4, where he refers to Lew, Mistelis and Kroll’s suggestion that the treatment of parol evidence is “in the grey zone between substance and procedure”. Patrick Ostendorf, in “The exclusionary rule of English law and its proper characterisation in the conflict of laws” (2015) 11(1) Journal of Private International Law 163 holds the view that the prevailing opinion that the admissibility of extrinsic evidence is directly concerned with the decision on the merits and hence functionally belongs within the realm of contract interpretation, is flawed. He opines that “only issues concerned with the decision on the merits rather than merely affecting it should be governed by the lex causae instead of the lex fori” [emphasis in original] since almost any procedural rule “may in some way or other affect the material outcome of a given case” (at 172). In Mr Ostendorf’s view, the “characterisation of the exclusionary rule as a matter of substantive law can only be justified if its function is more closely intertwined with principles of contractual interpretation, such as the objectivity principle, the contra proferentem rule, the holistic approach or the contextual dimension, rather than with matters of evidence and procedure” [emphasis in original] (at 175). Mr Ostendorf cites [65] of Sembcorp Marine to support his view that the “admissibility of extrinsic evidence is not directly concerned with the interpretation of contracts though it may certainly affect the material outcome of a given case” [emphasis in original] (at p 177).

119 I referred counsel to further academic discussions of this issue, see Carol Mulcahy, “What Does It Mean – Contractual Interpretation in International Commercial Arbitration” (2015) 9 Dispute Resolution International 15; Joshua D. H. Karton, “International Commercial Arbitrators’ Approaches to Contractual Interpretation” (2012) International Business Law Journal 383 and also “The Arbitral Role in Contractual Interpretation” (2015) 6(1) Journal of International Dispute Settlement 4; James Spigelman,