Court of Appeal allows full enforcement of arbitral award: Navigating due process and fair hearing rights in arbitration

In ONI Global Pte Ltd and another v GNC Holdings LLC and another appeal [2026] SGCA(I) 3 (“ONI v GNC”), the Court of Appeal considered cross-appeals against a decision of the Singapore International Commercial Court (“SICC”) which set aside an arbitral award in part and refused enforcement of certain specific performance orders. A discussion of the SICC’s decision below can be found here.

On appeal, the Court of Appeal provided guidance on when due process complaints would be stymied by party conduct amounting to impermissible hedging, and the relevant considerations in assessing whether a tribunal’s grant of specific performance orders could be said to be in excess of jurisdiction or a breach of natural justice.

The decision illustrates how strategic postures in arbitration may intersect with post-award enforcement challenges, and the remedial latitude that may arise where a tribunal’s equitable jurisdiction is engaged or the contested issues are reasonably foreseeable as forming part of the award.

Background

GNC Holdings LLC (“GNC”), a Delaware-incorporated franchisor of health products, and ONI Global Pte Ltd (“ONI”), a Singapore-incorporated franchisee, had a franchise relationship governed by a series of agreements (“Singapore Agreements”). The Singapore Agreements contained a post-termination covenant, Clause 13.4 of a Franchise Agreement, which required ONI to assign the franchised stores to GNC at the latter’s request. On or about 20 May 2022, ONI terminated the Singapore Agreements and rebranded 54 franchised stores in Singapore.

GNC and ONI both commenced arbitrations alleging repudiatory breach of the Singapore Agreements by the other. The arbitrations were seated in Pittsburgh, Pennsylvania, and subsequently consolidated. After the evidentiary hearing of the arbitration in October 2023, GNC advanced in its post-hearing brief what ONI characterised as a “new” quantum case on post-termination damages (“GNC’s Quantum Case”). 

ONI first raised objections to GNC’s Quantum Case on 12 January 2024 in an email to the tribunal, where ONI stated its reservation of rights in respect of GNC’s new arguments and contended that it should, at minimum, be granted additional time during the closing oral arguments to address these new arguments “in order to mitigate the prejudice to ONI’s due process rights”. Subsequently, ONI sought leave from the tribunal to apply to strike out GNC’s Quantum Case on 4 February 2024 (“Striking Out Application”).

The tribunal heard closing oral arguments over 3 days in February 2024, including arguments on the Striking Out Application on the second day, and arguments on the merits of the quantum cases on the third day. After hearing arguments, the tribunal indicated that it would address the Striking Out Application as part of the final award.

In the final award, the tribunal found largely in favour of GNC and held that ONI had repudiated the Singapore Agreements. Among other things, the Tribunal granted remedies in favour of GNC, including damages as well as orders for specific performance of post-termination covenants (“Order 3”).

GNC sought enforcement of the award in Singapore, which was resisted by ONI on various grounds that included the following:

1. Ground 3: The tribunal allowed GNC’s Quantum Case, which was new and unpleaded. The award should be refused enforcement on the basis that: (i) the award of damages was outside the scope of the parties’ submission to arbitration; and/or (ii) the tribunal committed breaches of natural justice.
2. Ground 4: The tribunal granted new and unpleaded specific performance reliefs. The award should be refused enforcement on the basis that: (i) the terms of the specific performance orders were outside the scope of the parties’ submission to arbitration; and/or (ii) the tribunal committed breaches of natural justice. 

The SICC rejected Ground 3 and most of Ground 4. However, it found that three sub-orders in Order 3 – orders 3(d)(ii), 3(d)(iii) and 3(f) – were made in breach of natural justice and varied the enforcement order to deny their enforcement. Both parties appealed. ONI appealed to set aside the enforcement of the award on the same grounds raised before the SICC. GNC cross-appealed the exclusion of orders 3(d)(ii), 3(d)(iii) and 3(f) from enforcement, arguing that: (i) the SICC had refused enforcement on grounds beyond those stipulated in the International Arbitration Act 1994; and/or (ii) no breach of natural justice arose, as there was sufficient nexus between the orders and the parties’ cases and no prejudice was caused to ONI.

The Court of Appeal’s Decision

The Court of Appeal dismissed ONI’s appeal and allowed GNC’s cross-appeal, upholding enforcement of the award in full.

In relation to Ground 3 and Ground 4 above, the Court of Appeal framed the issues for determination as follows:

• Issue 3(a): Did ONI’s conduct in respect of GNC’s Quantum Case amount to impermissible hedging? – This issue had been raised by the Court of Appeal during the hearing of the cross-appeals. After the hearing and on ONI’s request, the Court of Appeal directed parties’ further submissions on this issue.
• Issue 3(b): Should the enforcement of the award in respect of post-termination damages be refused on the ground that: (i) the post-termination damages claim fell outside the scope of submission to arbitration; and/or (ii) ONI was denied a fair opportunity to present its case in relation to the post-termination damages claim, giving rise to a breach of the rules of natural justice? (Ground 3)
• Issue 4: Should the enforcement of Order 3 be refused on the ground that: (i) Order 3 or any part of it fell outside the scope of submission to arbitration; and/or (ii) there was a breach of the rules of natural justice in connection with the making of Order 3 or any part of it? (Ground 4)

Issue 3(a)

The law on impermissible hedging in the context of challenges to arbitral awards is set out in China Machine New Energy Corp v Jaguar Energy Guatemala LLP [2020] 1 SLR 695:

… if a party intends to contend that there has been a fatal failure in the process of the arbitration, then there must be fair intimation to the tribunal that the complaining party intends to take that point at the appropriate time if the tribunal insists on proceeding. This would ordinarily require that the complaining party, at the very least, seek to suspend the proceedings until the breach has been satisfactorily remedied (if indeed the breach is capable of remedy) so that the tribunal and the non-complaining party has the opportunity to consider the position.

…

[emphasis in original]

In the present case, the Court of Appeal went on to consider the scope of the duty to give fair intimation in the following circumstances: What happens if a party raises due process objections in respect of a new argument, but nonetheless goes on to address the argument on the merits? Is it sufficient that the party “maintains” its reservations while addressing the argument on the merits?

The Court of Appeal held that ONI’s conduct amounted to impermissible hedging, identifying two aspects of ONI’s conduct:

First, ONI had failed to seek rectification of the due process complaints before the tribunal. On appeal, ONI’s due process complaints were that if GNC’s Quantum Case had been properly introduced, it would have been entitled to reopen document production, conducted its case at the hearing differently, and instructed its own expert on market share analysis to challenge GNC’s expert evidence. However, ONI had not expressly sought to rectify any of these due process complaints before the tribunal. The Court of Appeal held that as ONI should have but failed to make clear to the tribunal the course of action it deemed necessary to remedy the procedural breach, it was precluded from raising the same due process complaints at the enforcement stage.

While it remained open to ONI to argue that the breach was incapable of remedy save by striking out GNC’s Quantum Case, ONI had not shown this to be the case.

Second, ONI’s conduct in addressing GNC’s Quantum Case on the merits undermined its procedural objection. The Court of Appeal reasoned that the significance of a party addressing the merits of a case that it contends has been brought in breach of its due process rights, turns on whether and how doing so undermines or invalidates the procedural objection. The Court of Appeal made the following observations of ONI’s conduct: 

• ONI had not explicitly indicated to the tribunal that it was addressing the merits of GNC’s Quantum Case under protest, while maintaining that its due process rights had been irremediably breached. 
• The fact of ONI’s Striking Out Application said nothing about whether ONI had made it clear to the tribunal that if it proceeded to address the merits of GNC’s Quantum Case, this would necessarily be on the basis of a continuing and unfairly prejudicial or irremediable breach of its due process rights. The Court of Appeal observed that it was ‘inexplicable’ that there was no specific reservation of this sort made by ONI to the tribunal, if in fact that was how it was proceeding.
• While ONI contended before the court that the tribunal should never have got to considering the merits of GNC’s Quantum Case, because there was no situation in which the merits could fairly be entertained, it had never made this intimation to the tribunal. The Court of Appeal held that if ONI believed this to be the case, the onus lay on ONI to make it clear to the tribunal, instead of dedicating time and resources to addressing the case on the merits.

The Court of Appeal further rejected the proposition that it is generally open to a party to argue that its duty to give fair intimation had not arisen where the tribunal delivers its decision on the procedural objection as part of the final award.

Issue 4

The court addressed Issue 4 in two parts: scope of submission, and breach of natural justice.

On scope of submission, ONI argued that under Pennsylvanian law, the tribunal was confined to granting specific performance relief in the specific terms sought by GNC in its statement of claim. The Court of Appeal rejected this, holding that the parties had both expressly and impliedly invoked the equitable jurisdiction of the tribunal: GNC’s claim for specific performance in its Statement of Claim was accompanied by a prayer for “such other relief as the Tribunal deems necessary, fair and just”, and the parties’ exchange of arguments in the arbitration introduced into the pleadings an aspect of the balancing of the equities between the parties and third parties in how any order was to be framed.

It was therefore open to the tribunal to subject the order for specific performance to terms that it considered just. The Court of Appeal further affirmed the SICC’s decision below that each term of Order 3 was part of or connected to the enforcement of the post-termination covenants, whether directly or in fashioning an appropriate order in equity which justly resolves the competing considerations put forward by the parties during the arbitration.

On breach of natural justice, a party must establish four cumulative requirements: (a) which rule of natural justice was breached; (b) how it was breached; (c) in what way the breach was connected to the making of the award; and (d) how the breach prejudiced its rights. In the instant case, ONI argued that the specific performance orders under Order 3 breached the fair hearing rule. As the tribunal did not consult the parties on the specific terms of Order 3, ONI had had no opportunity to address the tribunal on how Order 3 should be framed. 

The Court of Appeal reiterated the principle in GlaziersEngineering Pte Ltd v WCS Engineering Construction Pte Ltd [2018] 2 SLR 1311 that parties are precluded from complaining of a breach of the fair hearing rule where they ought reasonably to have foreseen that the issue in question would form part of the court’s decision, but omitted to address the issue.

In the instant case, it was reasonably foreseeable that the tribunal would craft Order 3 in a manner that was different from what the parties had each sought, by imposing terms that it considered would fairly address the various concerns that were expressed and objections that were raised. 

Although ONI was deprived of an opportunity to make submissions which had a real chance of resulting in an adjustment to the specific performance orders, the Court of Appeal found the question of prejudice to be irrelevant as the tribunal had had no obligation to have specifically raised the possibility of Order 3 taking the form it did. On the circumstances of the matter, this possibility was a reasonably foreseeable outcome of the way the evidence was led at the arbitration.

Comments

ONI v GNC is a timely reminder that the presentation of a party’s case in arbitration can require careful balancing with competing procedural objections, particularly where a party seeks to preserve its rights for post-award challenges. It also highlights that where a tribunal’s equitable jurisdiction is engaged or contested issues are reasonably foreseeable as forming part of the award, the scope of remedial orders may not necessarily be confined to the precise formulation advanced by either party. 

The authors thank practice trainee, Jolene Tan, for her assistance in preparing this article.