While arbitrations are built on the concept of efficiency, obstacles may arise in the course of events that cause delay or halt proceedings entirely. To avoid proceedings being stuck in limbo, the UNCITRAL Model Law on International Commercial Arbitration provides that the arbitral tribunal may terminate proceedings where their continuation has become unnecessary or impossible.
DRL v DRK [2026] SGHC 32 involved an arbitration that had been terminated by the arbitral tribunal on the basis that continuing proceedings had become impossible due to various sanctions that had been imposed on the Applicant. The Singapore High Court dismissed the application to set aside the tribunal’s award, upholding the termination of proceedings.
The termination of the arbitration had significant impact on the Applicant as the limitation period that governed its claim against the Respondent expired before the tribunal terminated the arbitration, meaning that the Applicant could not commence a fresh arbitration. Nonetheless, the Court maintained that the sole issue in deciding termination under the relevant provision is the existence of impossibility; there is no room to consider the prejudice to either party or who caused the impossibility.
The Court’s decision is particularly relevant in the current global economic context, where the imposition of international sanctions has greatly escalated in recent years.
The Respondent in this matter was successfully represented by Lee Eng Beng SC, Chew Xiang and Timothy Chong of Rajah & Tann Singapore LLP.
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