The Singapore High Court has upheld a Singapore International Arbitration Centre (“<span class="news-text_medium">SIAC</span>”) tribunal’s decision to terminate an arbitration on the ground of impossibility under Article 32(2)(c) of the <span class="news-text_italic-underline">UNCITRAL Model Law</span>, where international sanctions imposed on the claimant made continuation of the proceedings unworkable. The decision reinforces the mandatory and objective nature of “impossibility” and underscores the need for sanctioned claimants to take early, proactive steps to preserve their claims.
In <span class="news-text_italic-underline">DRL v DRK [2026] SGHC 32</span>, the Singapore High Court dismissed an application to set aside a SIAC award by which the arbitral tribunal had terminated the proceedings for impossibility under Article 32(2)(c) of the <span class="news-text_italic-underline">UNCITRAL Model Law</span>. The SIAC arbitration was commenced in 2020 and concerned a nine-figure contractual debt allegedly owed by the respondent.
In 2022, a number of jurisdictions imposed international sanctions on the claimant. These measures froze the claimant’s assets and effectively excluded it from international banking channels, leaving it unable to pay its legal representatives, meet the SIAC’s advances on costs, provide security for the respondent’s costs, or satisfy any adverse award that might be rendered against it.
Against that background, the tribunal granted the respondent’s application in September 2024 to terminate the arbitration for impossibility under Article 32(2)(c) of the <span class="news-text_italic-underline">UNCITRAL Model Law. The claimant sought to set aside the award, alleging a breach of natural justice. It argued, in particular, that termination of the arbitration caused serious prejudice because the limitation period for its claim had expired in April 2024, preventing it from pursuing the claim elsewhere. The Singapore High Court rejected the challenge. At the outset, the judge observed that the claimant rightly accepted that the tribunal’s decision could not be attacked on the basis of an error of law or fact.
Turning to natural justice, the Court held that Article 32(2)(c) does not involve an exercise of procedural discretion, but rather requires an objective determination as to whether “impossibility” exists. Impossibility is a binary, factual condition: once established, the tribunal is obliged to terminate the arbitration. In those circumstances, the tribunal was not required to balance or compare the prejudice suffered by each party. The fact that the claimant’s claim had become time-barred was therefore irrelevant to the analysis.
The Court further held that any unfairness suffered by the claimant was more apparent than real. The claimant had approximately 29 months to explore alternative means of progressing the arbitration, including seeking third-party funding, assigning the claim, or otherwise putting in place a mechanism to overcome the effects of the sanctions before the limitation period expired.
The decision serves as a clear reminder that parties affected by economic sanctions cannot expect arbitration proceedings to remain indefinitely in abeyance. Claimants facing such constraints should act swiftly to secure funding or other solutions if they wish to preserve their ability to pursue claims through arbitration.
<span class="news-text_medium">Case:</span> <span class="news-text_italic-underline">DRL v DRK [2026] SGHC 32</span> 9 February 2026 (Vinodh Coomaraswamy J).
