Australia: A cautionary tale for joint venture parties – why arbitration works

The New South Wales Supreme Court recently determined an application by a joint venture party to set aside an order registering a judgment of the Singapore High Court in New South Wales.

The application was made by Mr Nyunt. Mr Nyunt, a national of Myanmar and citizen and resident of Australia, had entered into a joint venture agreement with First Property Holdings Pte Ltd (First Property), a Singaporean company, in 1998. Mr Nyuent's brother was also a party. Two further documents were executed in relation to the joint venture: a loan agreement and a convertible debenture. The joint venture involved the development of property projects in Myanmar (intended to occur through a Myanmar incorporated company).

The chronology is complex and spans the period from at least 1998 to the present – over two decades. The dispute involved litigation in Myanmar, followed by litigation in Singapore which led to litigation in the Federal Court of Australia. The litigation in Myanmar was described in the Federal Court judgment as running for 'many years'; no further details were disclosed.

The proceedings in the High Court of the Republic of Singapore were commenced by First Property against Mr Nyunt to recover a debt under the loan agreement and for breach of fiduciary duty. The breach was said to arise from Mr Nyunt's treatment of the joint venture assets. Because Mr Nyunt was living in Australia, leave was required from the Singapore High Court to serve proceedings on him outside of Singapore. Leave was granted and Mr Nyunt was personally served. In spite of this, Mr Nyunt did not enter an appearance in Singapore and First Property obtained judgment against him.

The decision by Mr Nyunt and First Property to enter into a joint venture arrangement without the benefit of an arbitration agreement was unwise. Singapore, Myanmar and Australia are New York Convention member States. The New York Convention facilitates the recognition and enforcement of foreign arbitral awards in 159 countries. There are limited grounds on which an award debtor can resist enforcement; the New York Convention does not allow a review on merits.

Unfortunately for both Mr Nyunt and First Property, none of the key joint venture documents contained an arbitration clause. Instead, the documents stipulated the courts of Singapore as the chosen forum on a non-exclusive basis.  

The effect of the choice of court clause was to permit the parties to commence proceedings both in Singapore courts and in other courts having jurisdiction. In this case, this included lengthy proceedings in the courts of Myanmar. The choice of court clause also obliged First Property to seek leave to serve the Singapore proceedings before it could prosecute the substantive claims in that court. This step would have been unnecessary if the parties had chosen arbitration.

Proceedings for the recognition and enforcement of foreign arbitral awards is relatively straightforward in Australia under the International Arbitration Act (Cth) 1974 (the IAA). The IAA contains exhaustive grounds available to an award debtor to resist recognition and enforcement. The award creditor must demonstrate to the court that the award was made pursuant to a valid arbitration agreement and produce the award. In most cases, the parties to the award must mirror the parties to the arbitration agreement. If a challenge is made to the jurisdiction of the tribunal who made the award, the court looks only to the arbitration agreement, including its scope and the parties to it. Applications for recognition and enforcement are usually heard promptly by the courts and the hearings are short in duration.

Mr Nyunt's application to set aside registration was made broadly on five grounds:

  • first, that the Singapore court did not have jurisdiction to hear the claims brought before it;
  • second, that Mr Nyunt did not have sufficient notice of the proceeding to enable him to defend the claims;
  • third, that the judgement was obtained by fraud;
  • fourthly that registration was an abuse of process (so that judgment must be set aside as a breach of public policy); and
  • fifth, that the dispute underlying the judgment had already been finally disposed of in another court before judgment was given in the Singapore court.

Mr Nyunt failed on all grounds.

As to the question of jurisdiction, the fact that the parties had chosen litigation over arbitration obliged the court to embark on a detailed analysis of the joint venture documents (and in particular the choice of court clauses), the history of the dispute, the nature of the claims brought by First Property in the Singapore proceedings and consideration of conflict of laws. Had the parties engaged in arbitration, the question of whether the tribunal had jurisdiction over the dispute leading to the award would have been answered by the terms of the arbitration agreement. Put simply, it is the parties' agreement which vests jurisdiction in the tribunal. And where the usual phrase in an arbitration agreement is 'all disputes arising out of or in connection with' the relevant contract, there is very limited opportunity to argue that a claim related to the agreement does not fall within scope.

On the question of notice, an arbitration clause would also have simplified the analysis, particularly if the arbitration proceedings were administered by an arbitral institution. The reason for this is that the rules of many of the arbitral institutions provide for the institution to give notice of the commencement of the arbitration to the respondent. It is almost impossible for the respondent to claim it did not have notice in these circumstances. Further, once the arbitration proceedings are on foot, all communications can be made by email (for which a read receipt can be requested). There is no need to examine whether judicial leave was granted for service overseas, whether service was properly effected according to that leave and whether the defendant had actual notice of the proceeding.

Both fraud and breach of public policy are available to challenge recognition and enforcement of a foreign arbitral award as well as supporting an application to set aside registration. The jurisprudence in Australia on the question of public policy in the context of the IAA shows that the courts make every effort to ensure that a party relying on the public policy exception does so in a confined manner and, in doing so, does not seek a re-hearing of the merits.

The final ground raised by Mr Nyunt was that the dispute had already been the subject of a final and conclusive judgment in the Myanmar court. The Federal Court held that the 'matter in dispute' in the Myanmar proceeding was not the same as the matters in dispute in the Singapore proceeding.

It is clear from the chronology outlined in the judgment (both in relation to the joint venture itself and the litigation that followed), that the issues in dispute between the parties were complicated and the level of cooperation amongst the parties was suboptimal.

However, had the joint venture documents each contained an identical arbitration clause allowing joinder or consolidation, disputes arising out of, or in relation to, the joint venture would all have been resolved by a single tribunal. And the only litigation required in that scenario would have been straightforward proceedings for recognition and enforcement of the foreign arbitral award.

This real life example of protracted and complicated litigation is a lesson for joint venturers of the importance of understanding upfront how disputes might arise, how disputes should be resolved and why arbitration is more than just an option for cross border transactions.

See: First Property Holding Pte Ltd v Nyunt [2019] NSWSC 249

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Chambers Asia Pacific Awards 2016 Winner – Australia
Client Service Award
Employer of Choice for Gender Equality (WGEA)

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions