Introduction

Business Plan

The Parties have agreed to adopt the business plan as set out in Appendix 1 (the “Initial Business Plan”).

Provided that the Initial Business Plan shall be adjusted during the following periods:

i. The Initial Business Plan shall be adjusted in 2018 at least four (4) months prior to the Commencement Date and the Initial Business Plan shall be replaced with the new business plan starting from the Commencement Date (the “2018 Business Plan”). A sample 2018 Business Plan (i.e.，prior to adjustment pursuant to this clause) is set out in Appendix 1(a).

ii. Thereafter, the 2018 Business Plan shall be adjusted prior to January 2020 and the 2018 Business Plan shall be replaced with the new business plan starting from January 2020 until the expiration of the Term (unless otherwise terminated in accordance with Clause 11.2 of the Main Agreement) (the “2020 Business Plan”), A sample 2020 Business Plan (i.e., prior to adjustment pursuant to this clause) is set out in Appendix 1(b).

The Initial Business Plan, the 2018 Business Plan and the 2020 Business Plan shall be collectively referred to as the “Business Plan”.

[emphasis in bold in original; emphasis in bold italics added]

All prices for meals and other Services to be provided under this Agreement shall be as set forth in Annex 1 and subject to the pricing methodology and adjustment mechanisms set out in this Agreement and Annex 1: provided that, at any time after the Effective Date, Asiana shall provide information requested by [GGK] that [GGK] deems, in its sole discretion, reasonably necessary for it to formulate the pricing terms for the first 12 months after the Commencement Date (the “Initial Pricing Period”), which shall be no less favourable to either Party than the current pricing terms paid by Asiana for any services provided at the Stations that are the same as or similar to the Services; provided, that, Asiana shall not be obligated to provide any information that is subject to confidentiality; provided, further, that [GGK] shall use any information furnished by Asiana solely for purposes of formulating the pricing terms for the Initial Pricing Period. The pricing terms shall be adjusted in accordance with Annex 1.

[emphasis in original]

…

(ii)  the party making the application was not given proper notice of the appointment of the arbitrator or was otherwise unable to present his case; or

(iii)  the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration …

Notwithstanding Article 34(1) of the Model Law, the General Division of the High Court may, in addition to the grounds set out in Article 34(2) of the Model Law, set aside the award of the arbitral tribunal if —

(a) the making of the award was induced or affected by fraud or corruption; or

(b) a breach of the rules of natural justice occurred in connection with the making of the award by which the rights of any party have been prejudiced.

58. It is trite law that Article 34(2)(a)(iii) also applies where a tribunal fails to consider all the issues that are raised by the parties in the reference:

(a) A failure on the part of a tribunal to decide matters submitted to it is a failure to exercise the authority that the parties had granted and could therefore be a breach of Article 34(2)(a)(iii) (CRW Joint Operation v PT Perusahan Gas Negara (Pesero) TBK [2011] 4 SLR 305 (“CRW”), at [31]). It is clear that there is no requirement for an issue to be formally pleaded before a party may invoke Article 34(2)(a)(iii) - it would suffice if the issue was one that was raised before the tribunal and one which the tribunal ought to resolve in order to do justice between the parties (CKG v CKH [2021] SGHC (I) [5] (“CKG”) at [10] and [11]). In determining this, the Court may consider parties’ pleadings, list of issues, written and oral submissions to determine the issues that were submitted to the Tribunal (see for example, BLC and others v BLB and another [2014] 4 SLR 79).

(b) The tribunal is not obliged to deal with each point made by a party – what matters is the resolution of an issue either expressly or implicitly by the Tribunal (TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd [2013] 4 SLR 972 at [72] and [77]).

(c) It would usually be a matter of inference, rather than of explicit indication, that the Tribunal wholly missed one or more important pleaded issues. Any such inference must be clear and virtually inescapable (AKN and another v ALC [2015] 3 SLR 488 (“AKN”) at [46]).

(d) Even if there was a failure by a tribunal to deal with every issue referred to, this would not ordinarily be sufficient to render its arbitral award liable to be set aside. The crucial question in every case is whether there has been real or actual prejudice to either or both of the parties to the dispute (CRW at [32]).

(e) It is trite that mere errors of law or even fact are not sufficient to warrant the setting aside of an arbitral award under Article 34(2)(a)(iii) of the Model Law (CRW at [33] citing Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd [2010] 3 SLR 162 at [19] – [22]).

…

65. The right to be heard is an aspect of the rules of natural justice under Section 24(b) of the IAA and also an aspect of being able to present one’s case within the meaning of Article 34(2)(a)(ii) of the Model Law. The Singapore Courts have regarded the two as being indistinct, and have dealt with both provisions together (Government of the Republic of the Philippines v Philippine International Air Terminals Co, Inc [2007] 1 SLR(R) 278 at [18]; ADG v ADI [2014] 3 SLR 481 at [118]). As such, both grounds will be addressed together.

66. In order to successfully invoke Section 24(b) and Article 34(2)(a)(ii), the Court must be satisfied that (CRW at [37] and [38]; Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86 at [29] and [82] – [91]):

(a) The Tribunal breached a rule of natural justice in making the arbitral award. The applicant must specifically identify which rule of natural justice has been breached, how it was breached and in what way the breach was connected to the making of the award.

(b) The breach of natural justice caused actual or real prejudice to the party challenging the award (i.e., the breach had to have altered the final outcome of the arbitral proceedings in some meaningful way before curial intervention was warranted). Where the same result could or would ultimately have ensued even if the arbitrator had acted property, there would be no basis for setting aside the award in question.

67. The failure to consider an important issue that has been pleaded in an arbitration is a breach of natural justice because in such a case, the arbitrator would not have brought his mind to bear on an important aspect of the dispute before him (AKN at [46]). The Court of Appeal in AKN laid down the following general principles:

(a) Consideration of the pleaded issues is an essential feature of the rule of natural justice that is encapsulated in the Latin adage, audi alteram partem.

(b) It will usually be a matter of inference, rather than of explicit indication, that the arbitrator wholly missed one or more important pleaded issues. However, the inference – that the arbitrator indeed failed to consider an important pleaded issue – if it is to be drawn at all, must be shown to be clear and virtually inescapable. If the facts are also consistent with the arbitrator simply having misunderstood the aggrieved party’s case, or having been mistaken as to the law, or having chosen not to deal with a point pleaded by the aggrieved party because he thought it unnecessary (notwithstanding that this view may have been formed based on a misunderstanding of the aggrieved party’s case), then the inference that the arbitrator did not apply his mind at all to the dispute before him (or to an important aspect of that dispute) and so acted in breach of natural justice should not be drawn.

77. First, the threshold for finding of breach of natural justice is a high one, and it is only in exceptional cases that a court will find that threshold crossed (China Machine New Energy Corp v Jaguar Energy Guatemala LLC [2020] 1 SLR 695 (“Jaguar”) at [87]).

…

80. Fourth, a tribunal is not obliged to deal with every argument; all that is required is that the tribunal ensure that the essential issues are dealt with (even if only implicitly), and the tribunal is to be given fair latitude in this respect (TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd [2013] 4 SLR 972 (“TMM”) at [72]-[74] and [77]).

81. Fifth, a failure by the tribunal to even consider an important pleaded issue is a breach of natural justice, as well as a breach of Art 34(2)(a)(iii) of the Model Law (CKG v CKH [2021] SGHC(I) 5 (“CKG”) at [9]).

82. Sixth, however, any such inference if to be drawn at all must be shown to be “clear and virtually inescapable”, and is not to be drawn if, inter alia, the facts are consistent with the tribunal having chosen not to deal with the point because it was thought unnecessary to do so (AKN at [46]). This is because no party has a right to expect the tribunal to accept its arguments, regardless of how strong and credible it perceives them to be (TMM at [94]).

83. Seventh, it is not a breach of natural justice where the matters complained of are the result of the party’s own conduct (CDX v CDZ [2020] SGHC 257 (“CDX”) at [34(h)(iii)] and [34(h)(iv)]). If a party seeks to challenge the award on a case which it did not make before the tribunal, but, on seeing the result, wished it had made, that is a misuse of the challenge procedure as there is no breach of natural justice (CKG at [11]). It follows that whether there has been a breach of natural justice is to be assessed on the material that was before the tribunal in the arbitration (CMJ v CML [2021] SGHC(I) 20 (“CMJ”) at [70]), and it is not therefore a breach of natural justice if a party had the opportunity to adduce evidence which it did not avail itself of (CMJ at [71]).

[emphasis in original]

72  An arbitral tribunal is not obliged to deal with every argument. It is neither practical nor realistic to require otherwise. Toulson J summed up neatly the extent of the arbitral tribunal’s obligation in Ascot Commodities NV v Olam International Ltd [2002] CLC 277 at 284 (see also Hochtief ([46] supra) at [80]):

Nor is it incumbent on arbitrators to deal with every argument on every point raised. But an award should deal, however concisely, with all essential issues.

73  All that is required of the arbitral tribunal is to ensure that the essential issues are dealt with. The arbitral tribunal need not deal with each point made by a party in an arbitration: Hussman (Europe) Ltd v Al Ameen Development and Trade Co [2000] 2 Lloyd’s Rep 83 (“Hussman”) at [56]. In determining the essential issues, the arbitral tribunal also should not have to deal with every argument canvassed under each of the essential issues.

74  What then is considered “essential”? This is not easy to define. Notwithstanding, in my view, arbitral tribunals must be given fair latitude in determining what is essential and what is not. An arbitral tribunal has the prerogative and must be entitled to take the view that the dispute before it may be disposed of without further consideration of certain issues. A court may take a contrary view ex post facto, but it should not be too ready to intervene.

75  It may be queried whether the line between issues and arguments is too fine. I do not think so. An argument is a proposition that inclines towards a specific conclusion. It typically contains reasons or premises, either factual or legal or both, which are presented as driving one towards a particular conclusion. An issue, on the other hand, is a topic. It is non-prescriptive, and usually expressed as a question.

76  In proposing that the issue should be determined in its favour, a party may submit different arguments that could operate cumulatively or independently. As long as one argument resolves the issue, there is no justification for insisting that the arbitral tribunal go on to consider the other arguments which have been rendered academic. In SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2010] 1 SLR 733 (“SEF”), Judith Prakash J held (at [60]) that “[n]atural justice requires that the parties should be heard; it does not require that they be given responses on all submissions made”. I completely agree. It is the right to be heard and not a right to receive responses to all the submissions or arguments presented that is protected. Although SEF was about a curial review of an adjudicator’s decision under the Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed), I find that it applies equally to arbitrations.

[emphasis in original]

16 The pleadings are the first place in which to look for the issues submitted to arbitral decision. But matters can arise which are or become within the scope of the issues submitted for arbitral decision, even though they are not pleaded. Whether a matter falls or has become within the scope of the agreed reference depends ultimately upon what the parties, viewing the whole position and the course of events objectively and fairly, may be taken to have accepted between themselves and before the Tribunal. CKH cited to the court the familiar case of PT Prima International Development v Kempinski Hotels SA and other appeals [2012] 4 SLR 98 (“Kempinski”) for the passages in it emphasising both that pleadings “provide a convenient way for the parties to define the jurisdiction of the arbitrator” and that, where jurisdiction to adjudicate upon a dispute is in question, “it is necessary to refer to the pleaded case of each party to the arbitration and the issues of law or fact that are raised in the pleadings to see whether they encompass that dispute” (Kempinski at [33] and [34]). Both statements are true, but the decision in Kempinski itself shows that they are not the end of the matter. Other considerations may show a different picture. As the Court of Appeal observed in CDM and another v CDP [2021] 2 SLR 235 at [18], the question of what matters are within the scope of the parties’ submission to arbitration is answerable by reference to five sources: the parties’ pleadings, the agreed list of issues, opening statements, evidence adduced, and closing submissions at the arbitration.

17 Arbitration is consensual and parties and changing circumstances can lead implicitly as well as expressly to a widening of the scope of an arbitration. In Kempinski that occurred when it came to light, during ongoing proceedings (commenced in 2002) to enforce a hotel management contract, that Kempinski had entered into a new management contract with a different operator on 28 April 2006, which potentially affected its right to insist on specific performance of the original management contract; and when disclosure applications and orders, written submissions and expert opinions followed regarding the effect of this new contract, without any amendment of the pleadings (Kempinski at [17]–[19]), Kempinski was held to have “ample notice of Prima’s case on this particular point” and “did not suffer any prejudice in any way since it was given ample opportunity to address this issue of law” (Kempinski at [51]). It was a case where, in the words of this court in CBX and another v CBZ and others [2021] SGCA(I) 3 at [48], “[t]he conduct of parties to litigation before an arbitrator or judge may and does on occasion widen the scope of the issues falling for determination in a way which deprives a pleading objection of any force”.

29 It follows that the Tribunal’s Award is vulnerable to being set aside, if not corrected, since, having rejected CKG’s reliance on the debt-to-log conversion in clause 4 of the April 2011 Minutes, the Award failed to consider or adjudicate upon the appropriate set-off. However, the matter goes further, in our view, than set-off. In the light of the course of events, presentations and statements which we have set out, we consider that it was incumbent on the Tribunal to treat CKG as having in reality advanced the Principal Debt with 2% interest per month not merely as a set-off, but as an item to be given full weight, whichever way the balance of account might as a result shift. It was, as CKH’s own expert himself recognised (see [21] above), in substance a “[c]ounterclaim” which was being introduced as an element in an overall statement of account, made up of items due one way or the other and the overall balance of which would, moreover, be expected to be of substantial relevance when it came to matters such as costs.

135  Under Korean law, the touchstone for the interpretation of a contract is the objective meaning of its wording. The Supreme Court of Korea has affirmed the primacy of the text in construing contracts: “In case where the parties to a contract have executed the contract terms in the form of an affirmative document that disposes or establishes a right of a party, the existence and substance of the expressed intent should be upheld in accordance with the actual wording thereof absent special circumstances, when the objective meaning of the wording is clear […]”

136  Therefore, where the wording of the contract is clear, it must be upheld according to the ordinary meaning of its terms. Only in the case of “clear and convincing counterevidence” rebutting the written terms of the contract may the court or tribunal depart from their objective meaning.

137 To the extent the text is, however, ambiguous, Korean law looks to establish what the reasonable intentions of the parties would have been when entering into the contract, applying an objective point of view. Thus, a court or tribunal may use subsidiary means of interpretation to arrive at a reasonable interpretation. It may consider factors such as common sense, the factual circumstances leading to the contract, and the purpose of the transaction:

“[A] reasonable interpretation should be made in accordance with logic and empirical rules, by taking into account comprehensively of the contents of the text, motives and circumstances leading to the agreement, the purpose of the agreement, and the true intent of the party etc.”

138 Here, sophisticated commercial parties negotiated the Catering Agreement over the course of 11 months, with the assistance of counsel. The language in the pricing mechanism is unambiguous and, in accordance with Korean law, should be given its ordinary meaning.

139  In all cases, the factual background supports the plain reading of the Catering Agreement, including the commercial purpose of the transaction and its negotiation history. The history of the drafting, and the price presentations which ensured the Parties’ mutual understanding on the pricing mechanism, confirm the Parties’ intentions behind the inclusion of specific language in the Catering Agreement with regard to pricing.

140  The text of the Catering Agreement and the negotiations leading to it make clear that – contrary to the Respondent’s case – the Parties did not defer agreement on the pricing methodology but rather agreed a detailed pricing mechanism in the Catering Agreement itself (Section 3.1.1). Moreover, Asiana is wrong to contend that the “no less favourable” wording in Clause 6.1.1 and Annex 1.4 cuts across the pricing mechanism (Section 3.1.2).

[emphasis added]

… to DECLARE that the pricing mechanism set forth in the Catering Agreement, including the contribution per passenger as calculated under both the Initial Business Plan and any subsequent Business Plan adjusted by the Claimant pursuant to Annex 1.4 of the Catering Agreement, including the 2020 Business Plan, is binding upon the parties and does not require any further agreement between them …

100.  Asiana and GGK agreed that the Catering Agreement and its annexes should be governed by and construed in accordance with the laws of Korea. Korea is a civil law jurisdiction (as is Switzerland, where [GGS] is incorporated) in which the principles of contract interpretation are relatively straightforward. In this arbitration, the Parties appear to be largely in agreement with these Korean law principles on contractual interpretation. That said, Asiana provides the following responses to GGK’s arguments concerning Korean law on contractual interpretation.

101.  First, GGK refers to Korean Supreme Court Case No. 93Da3103 (Exhibit CLA-1) to explain the principles of contract interpretation under Korean law. Asiana does not dispute that the principles on contract interpretation are well summarized in Case No. 93Da3103. However, Asiana must point out that GGK submitted a (partly) wrong translation and omitted important portions of this decision. That has resulted in an incomplete and somewhat distorted characterization of the relevant Korean jurisprudence on contract interpretation. To rectify this, Asiana submits as follows:

(1) The language of the contract is not given primacy under Korean law when the objective meaning of the wording is not clear. Indeed, GGK appears to agree with this point.

(2) The factors that need to be considered for contract interpretation where the language is not clear are set out in Case No. 93Da3103:

(a) [GGK] provided a translation of this decision in footnote 191 of the SOC: “[…] while taking into account in combination the following factors: the content of the text of the document, the motive and circumstances of the contract, the purpose and underlying intention of the parties, and prevailing business practices in the same transaction.”

(b) However, a correct translation of this part of the decision reads as follows: “[…] while taking into account holistically the following factors: the motive and underlying circumstances of the relevant language of the contract and the contract itself, the purpose and true intention that the parties are willing to achieve through the contract, and business practices.”

(c) The nuances of the two translations are slightly different in that (i) “the content of the text of the document” is not an independent factor to be considered, (ii) the motives and circumstances to be examined are those of the “parties” (which [GGK] fails to mention), and hence the parties’ relevant correspondence and conduct need to be considered, and (iii) business practices are not limited to those of the “same transaction”.

(3) GGK omitted the last sentence of the rationale (or summary of the decision) in Case No. 93Da3103, the English translation of which is as follows: “In particular, when the substance of the contract alleged by one party imposes a significant responsibility on the other party, the interpretation of the text thereof must be construed more strictly” (emphasis added). The principle of ‘strict interpretation’ under Korean contract law … calls for a stricter, narrower interpretation if the interpretation asserted by one party imposes a grave obligation on the other party.

102.  Second, one additional principle of contract interpretation under Korean law, which was not mentioned by GGK, is the principle of “effective interpretation” ... According to this principle, when in doubt, the interpretation that renders the contract effective shall prevail over the interpretation which renders the contract null and void, or the relevant parts of the contract without effect.

103.  GGK argues that “the language in the pricing mechanism is unambiguous.” However, GGK has not provided any specific explanation or reference as to which part of the Contract is allegedly “unambiguous” in this regard. In Asiana’s view, the pricing mechanism under the Catering Agreement, including how to formulate the 2018 BP in light of the “no less favourable” principle is not without some ambiguity. Not only is the phrase “The net profit as committed in the Business Plan will be preserved” unclear in and of itself, it conflicts or is incompatible with various other sections of the Catering Agreement if construed against them as GGK suggests it should be.

104.  Therefore, in this Section, Asiana will provide a proper construction of the pricing mechanism of the Catering Agreement in accordance with the principles of Korean law, by taking into account the following factors:

(1) The relevant language of the Catering Agreement;

(2) The drafting history of the Catering Agreement and its relevant parts (to ascertain the motives and true intention of the Parties underlying the contract);

(3) The parties’ relevant correspondence and conduct (to further ascertain the motives and true intention of the Parties underlying the contract); and

(4) The business practices.

[emphasis added]

213.  If GGK is alleging that Asiana had committed to guarantee fixed amounts of net profits for GGS for 30 years in order to secure the commercial interest of a third party (here, [Kumho Group), the party to the BWA and the recipient of the BWs), which proposition is denied for the avoidance of doubt, this would lead to the result under Korean law that the Catering Agreement is rendered null and void in full or in part. That is because, according to the principle of “abuse of power of representation” … under Korean law, if a party knowingly or negligently enters into a contract with a representative of another company who has abused its representative authority (for instance by entering into a contract that brings a loss to his/her company and is only beneficial to a third party) then such contract is deemed null and void. This is why Asiana doubts that GGK is indeed suggesting that the pricing mechanism under the Catering Agreement was directly linked to the BWA.

214.  If there are ways to interpret a contract that would preserve the validity of its terms, such construction should be preferred over an interpretation that would invalidate the contract or parts thereof. Asiana submits that its interpretation of the Catering Agreement under which the net profit figures in the IBP are not deemed to be fixed and guaranteed (including because, among other reasons, they are not linked to the BWA) is construing the contract in a way that would preserve the validity of the Catering Agreement, and hence must be upheld.

[emphasis added]

158 The Parties largely agree on the relevant factors to interpret a contract under Korean law. In its Statement of Claim, GGK outlined those principles based on Korean Supreme Court precedent as follows:

i) The text of a contract has primacy where its objective meaning is clear;

ii) Only where the objective meaning of the text is ambiguous, the court or tribunal may use subsidiary means of interpretation such as commercial common sense, the factual circumstances leading to the contract, and the purpose of the transaction.

159 Asiana essentially agrees with the above and supplements them with the principle of “effective interpretation”, whereby an interpretation which renders contractual clauses effective takes precedence over an interpretation which does not. GGK does not dispute this.

Contract Interpretation. Both parties agree that their interpretation of [the Agreement] is supported by the plain language, negotiation history and post-contractual conduct. ….

91.  This issue—whether GGK’s interpretation is consistent with business common sense—is of some significance. While GGK has tried to downplay this issue in its submissions, the issue needs proper and adequate treatment in this arbitration, for the following reasons.

92. First, the terms of the CA are governed by Korean law. This sets the CA apart from those governed by common law legal principles, as the Korean courts are not strictly bound by the literal meaning of the language used (in the English law sense) and can rely on factual context and commercial purpose of the clauses in question. In particular, where there is a dispute over two potential interpretations of the contractual terms—as is the case here—the Korean courts are empowered to prefer the construction which is consistent with business common sense and reject the other. This is confirmed by Professor Kwon, Asiana’s Korean law expert (and the only legal expert in this arbitration).

93.  Second, GGK cannot continue to feign ignorance at the fact that there is a genuine dispute between the Parties as to the proper construction of the key pricing terms of Annex 1.4. It is trite that language used in complex commercial contracts often have more than one potential meaning, despite the best efforts by lawyers and external financial advisors. In such cases, Korean law allows courts to have regard to considerations of commercial common sense.

94.  Third, it is not necessary to conclude that a particular interpretation would produce an extreme, absurd or irrational outcome before having regard to the commercial purpose of an agreement. The Korean courts are free to favor an interpretation over another because it is the more commercially reasonable interpretation of the contract.

95.  Fourth, it is consistent with the Korean court’s approach to contractual interpretation to rely on independent financial and industry expert evidence to aid the interpretation exercise. Here, it is clearly significant that GGK has been unable to adduce any expert evidence to support its position that the fixed net profits in the Initial Business Plan was commercially reasonable. As will be explained below, one can only conclude from GGK’s omission that no reasonably minded financial expert would have endorsed its interpretation from a commercial perspective.

96.  In this context, the issue is not (as GGK puts it) whether the Tribunal “needs experts to tell them how to read a contract”. That is simply non-sense—the real issue for the Tribunal is to decide whether, based on the objective meaning of the terms used in the contract and in light of all relevant factual and commercial context, the Parties could have reasonably agreed to be bound by the excessive net profit figures in the IBP to be applied throughout the 30-year term of the CA. As explained below, there is ample evidence for the Tribunal to reject that interpretation from a commercial perspective.

132.  There is yet another reason why GGK’s interpretation of the CA cannot be assisted by its package deal theory. That is because GGK’s suggestion that the BWA and the [Agreement] must be considered as part of the “relevant factual background” in interpreting the pricing mechanism in the [Agreement] would lead to an interpretation that would render the [Agreement] null and void under Korean law.

133.  This has always been a key position in Asiana’s defence, which GGK cannot now brush it away “as an aside”. It is clear from the brevity of its response that it has nothing of substance to say on the matter.

134.  In order to assist the Tribunal, Asiana has engaged an independent Korean law expert, Professor Kwon, to set out the principles governing the doctrine of abuse of power of representation under Korean law. Professor Kwon explains as follows:

The doctrine of abuse of power of representation provides that if a representative director of a company [the “Company”], who assumes a duty of care towards the [Company], abuses his or her power of representation by executing a contract with a counterparty [(the “Counterparty”)], with a view to conferring a benefit to himself or herself or a third party [(the “Third Party Affiliate” or “Third Party”, respectively)] against the [Company’s] interests, such a contract is deemed null and void, provided that the [Counterparty] was aware or should have been aware of the representative director’s abuse of his or her power of representation. The doctrine is well established in the cases before the Korean Supreme Court. Prior to the oral hearing the parties submitted Skeleton Arguments. The primary contention of both was that the plain and ordinary meaning of the wording in dispute was clear on its face so that the objective meaning could be determined from that wording. They disagreed however as to what that plain and ordinary meaning was. No further comments were made on the question of the Korean law on interpretation nor were matters arising out of the abuse of power principle discussed further.

First, the language of the contract supports Asiana’s case.

Second, Asiana’s case is also supported by the background and factual matrix in which the catering agreement was concluded and parties’ subsequent conduct, all of which confirms Asiana’s interpretation. Finally, Asiana’s interpretation is entirely consistent with business common sense and how a rational commercial enterprise would act.

If you look at the wording of draft annex you will see the wording, “the net price as committed in the business plan will be preserved”. The parties are in disagreement as to what this language means. GGK says that this means the net profit as stated in the Initial Business Plan will be preserved and unchanged throughout the 30 years’ service time. Asiana says that because the meaning of this phrase is not clear on its face, such a Korean law requires that the tribunal should look at the relevant surrounding materials to glean the parties’ intention.

[emphasis added]

Given the language of the catering agreement does not support its case, GGK resort to certainly external factors to try and establish its case. I will spend a bit of time now showing you why these external factors have no bearings on the proper construction and application of the parties’s agreement in this case. GGK [sic] heavily on two external factual circumstances in this dispute. They first say that [the] Chairman … of Kumho Group approved the business plan. They also say that a lot about the BWA package deal. But I will explain in a moment why this is all irrelevant factually and legally to determining the catering price under catering agreement.

I will now come to the Korean law principles. The issue is whether there’s an interconnection between the BWA and the [Agreement] in financial terms. We say there’s none because the interconnection between these two agreements let’s put it this way more simple, these two agreements function separately from each other. In other words, there is no trigger in one agreement that would generate obligations or payments under the other, it has no shared income, nothing. They function separately one from the other. But what we say is that the one agreement has been made, which is the catering agreement by Asiana, and it has given or favoured another company of the group. And this, depending on the circumstances and what the conditions are, could have triggered the doctrine of abuse of power of representation because a director of a company assumes a duty of care towards the company and he can abuse his power of representation by executing a contract with a counterparty with a view to conferring a benefit to himself or itself or a third party against the parties company’s party interests. I think we all understand the principle, of course. What is specific here in the point I am making is whether in Korea there’s that principle is expressed clearly, precisely, whether it’s how it’s applied. Is it severely monitored? Are there decisions by the Supreme Court looking at that? And this is the point we are making. There has been a legal opinion and we have seen that the situation could give rise to an invalidation of the [Agreement] under Korean law. I put this as a matter of principle. And if you go to the next slide, 34, it says contracts in violation of the Monopoly Regulation and Fair Trade Act. And if I go to the highlighted section: Apart from this abuse of bargaining position being an unfair trade practice under the Fair Trade Act it deals with Professor Kwon’s expert report in saying that there are various aspects under which under Korean law the contract could be seen as not valid. And the next slide goes to the same point. As we have not had cross -examination of Professor Kwon and have not at length discussed these principles, I believe that this is in the domain of what the arbitrators are perfectly well equipped to deal with themselves and look at it themselves, so that I am not going to belabour this point and these legal opinions more in detail, but I think they are important --it’s important to see that they are on the record and that they are properly understood.

The validity of an act that violates the Monopoly Regulation and Fair Trade Act (the “Fair Trade Act”) may be decided differently in each case, but the Korean Supreme Court has provided any act that violates the Fair Trade Act may be found to be in violation of Article 103 of the Civil Act:

[The Fair Trade Act] specifies an act of a business operator’s trading with the counterparty by improperly using its bargaining position, which may impair fair trade, as one of unfair trade practices prohibited thereby (Article 23(1)-4). Apart from this abuse of bargaining position being a unfair trade practice under the Fair Trade Act, an agreement executed by the business operator, who desires to make such act realized, with the counterparty to realize its abuse of bargaining position may be assessed to bring unjust profits to itself while causing the counterparty to make excessive payment in return or to assume any other undue burden, by using its superior position due to the difference in economic power. In such case, such agreement is a juristic act contrary to good morals and social orders and thus is null and void.

[emphasis added]

5.3.5  Respondent argues that the notion that the net profit figure in the Initial Business Plan was meant to be fixed for 30 years is commercially unreasonable. It says it would never have entered into the [Agreement] on this basis for the simple reason that the net profit figure in the Initial Business Plan would, by any measure, produce a return for Claimant that far exceeds what is reasonably expected in the industry, all at Respondent’s expense.

5.3.6  In support of this proposition, Respondent points to: (a) the fact that Korean Courts are not bound by a literal interpretation of a contract and are free to favour one interpretation over another, because it is more commercially reasonable; (b) Mr [X]’s opinion that the net profit figure in the Initial Business Plan could not have formed a commercially reasonable basis for entering into the [Agreement]; and (c) Mr [Y]’s opinion that a cost-plus contract that guaranteed net profits for 30 years is unprecedented in the aviation catering industry. Reliance is also placed on Mr [Y]’s view that the guarantee of net profits as reflected in the Initial Business Plan would be commercially unjustified, having regard to his opinion that the Initial Business Plan was not sufficiently robust to be relied on by two commercial parties as a guarantee of the stated net profits for 30 years.

5.3.7  With respect to Claimant’s assertion that the commercial reasonableness of its net profits being fixed for the 30-year term of the [Agreement] requires to be considered against the background of the suite of other agreements made at the same time amongst affiliated entities of Claimant and Respondent (i.e., as part of a package deal), Respondent says that Claimant has submitted no evidence at all to prove that there ever was a link between the [Agreement] and the BWA.

5.3.8  Respondent also contends that considering the BWA as part of the relevant factual background when construing the pricing mechanism in the [Agreement] would lead to an interpretation that would render the [Agreement] null and void under Korean law.

5.3.9  Respondent argues that, in circumstances where one party’s interpretation would render the contract void while the counter-party’s interpretation would give full effect to it, the Korean Courts are bound by the principles of effective interpretation to adopt the latter.

7.1.2  From a review of the disputing Parties’ written submissions, it is apparent that they agree that the following Korean law principles of contract interpretation apply:

(a) The text of a contract has primacy where its objective meaning is clear.

(b) Where the objective meaning of the wording of the agreement is clear on its face, a party may not use subsidiary means to create ambiguity when none exists in the wording itself.

(c) Only where the objective meaning of the text is ambiguous, may the court or tribunal use subsidiary means of interpretation such as commercial common sense, the factual circumstances leading to the contract (including the drafting history), the purposes of the transaction(s); and prevailing business practice to ascertain the interactions of the parties.

(d) In construing a contract, the principle of “effective interpretation” applies, whereby an interpretation that renders contractual clauses effective takes precedence over an interpretation which does not.

(e) Any reasonable interpretation based on subsidiary means of interpretation must take into account comprehensively the context of the text, the motives and circumstances leading to the agreement, the purpose of the agreement and the true intent of the parties.

(f) Korean law applies a principle of “strict interpretation” to the effect that the text of a contract must be construed more strictly where it imposes a significant responsibility on the other party. However, this principle comes into play only where the meaning of the text is ambiguous. It does not operate to displace the ordinary meaning of the wording of the agreement.

[emphasis added]

The doctrine of abuse of power of representation provides that if a representative director of a company, who assumes a duty of care towards the company, abuses his or her power of representation by executing a contract with a counterparty, with a view to conferring a benefit to himself or herself or a third party against the company’s interests, such a contract is deemed null and void, provided that the counterparty was aware or should have been aware of the representative director’s abuse of his or her power of representation. The doctrine is well established in the cases before the Korean Supreme Court.

95. Again, the Tribunal failed to give any consideration or provide any explanation whatsoever on the implications of such a finding on Asiana’s reliance on the Korean law principles of contractual interpretation, that would effectively render the Catering Agreement invalid under Korean law (pursuant to Articles 103 and 107 of the KCC). If the Catering Agreement was entered into by a director of Asiana with a view to conferring a benefit on a third party (in this case the wider Kumho Group), thereby satisfying the elements to invoke the Doctrine of Abuse of Power of Representation, the Catering Agreement would be deemed null and void. Further, GGK’s own evidence confirms that executing the Catering Agreement and the BWA as part of the same package deal was GGK’s actual intent and it actively participated in the deal, which would be contrary to public policy under Article 103, thereby rendering the Catering Agreement null and void. In order to avoid this conclusion, the Doctrine of Effective Interpretation would allow the Tribunal to come to an alternative interpretation that the Parties did not intend to preserve the net profits set out in the IBP as a fixed sum.

96. The Tribunal therefore failed to give consideration to Asiana’s arguments on the Doctrine of Effective Interpretation.

97. Asiana submits that it has suffered real and actual prejudice as a result of the Tribunal’s failure to consider Asiana’s arguments.

98. Had the Tribunal applied its mind to Asiana’s arguments, there is a real possibility that the Tribunal may have rejected GGK’s “package deal” argument, and therefore accepted an interpretation of Annex 1.4 to the Catering Agreement that would not have the effect of preserving the Net Profit Figures in the IBP for the whole term of the Catering Agreement. It would avoid a finding that would lead to the invalidity of the Catering Agreement under Korean law, which governs the Catering Agreement.

…

103. Even if the Tribunal was entitled to solely apply an objective interpretation of the Catering Agreement, it was still required to determine the consequences of the interpretation it adopted.

104. The Tribunal came to the conclusion that:

(a) On an objective interpretation of the IBP, there is no language requiring the Parties to agree to either of the 2018 or 2020 Business Plans.

(b) The objective meaning of the Net Profit Clause was that the Net Profit Figures in the IBP would be fixed for the term of the Catering Agreement and the yearly Net Profit Figure in the IBP would be used in the calculation of the Contribution Charges for the duration of the Catering Agreement.

105. The effect of this Tribunal’s interpretation would be that the Parties intended to guarantee GGK’s profit under the Catering Agreement in exchange for Gategroup’s overall investment into the Kumho Group (i.e., an endorsement of GGK’s package deal theory).

The Arbitral Tribunal shall decide the issues necessary to adjudicate the claims for relief of the parties as set forth above, and any claim added pursuant to Article 23(4) of the ICC Rules. More specifically, the questions of fact or law to be resolved by the Arbitral Tribunal in order to make the decision on the requests for relief mentioned above shall be those appearing from the parties’ submissions, statements and pleadings and, in addition, any further questions of fact or law which the Tribunal, in its own discretion, may deem necessary or appropriate to decide on, after hearing the parties, for the purpose of resolving the present dispute.

It is also noted that pursuant to Article 23(4) of the ICC Rules: “After the Terms of Reference have been signed or approved by the Court, no party shall make new claims or counterclaims which fall outside the limits of the Terms of Reference unless it has been authorized to do so by the Arbitral Tribunal, which shall consider the nature of such new claims, the stage of the arbitration and other relevant circumstances.”

9. Contract interpretation is intended to clarify and conclusively determine what the parties’ intended to achieve through the contract. As a matter of starting point, the Korean courts seek to discern the objective meaning of the words as used in the contract. However, this is not just to identify its meaning in the dictionary but to understand what the parties to the contract had intended at the time of formation of the contract based on objective standards. If the parties’ intent at the time of the formation of the contract has been clearly expressed in its wordings without any room for dispute from an objective viewpoint, the court will likely render its interpretation of the contract based on such wording.

10. However, where the objective meaning of the words cannot be discerned because their meaning in the dictionary or the scope which the words intend to define is not clear or because, even if the meaning or the defined scope is fairly clear, there is a dispute between the parties as to what they intended to express using said words, the court would consider circumstances other than the words in the contract in order to clarify the parties’ intent.

[emphasis added]

In short, given that what we intend to eventually clarify by way of contractual interpretation is the parties’ intent, not the text itself, other factors than the words should, as a matter of course, be taken into account, wherever necessary.

[emphasis added]

…

(3) Declare that GGK is bound to agree with Asiana the 2018 Business Plan by replacing the Initial Business Plan in its entirety and 2020 Business Plan by replacing the 2018 Business Plan in its entirety, in accordance with Asiana’s interpretation of the NLF Provisions and the pricing mechanism in the CA.

(1) Primary: Declare that GGK is bound to agree with Asiana the 2018 Business Plan in line with the NLF-Compliant 2018 Business Plan (Appendix 1 to RWS-6).

(2) Alternative: Declare that GGK is bound to agree with Asiana the 2018 Business Plan and the 2020 Business Plan on the basis that (i) the net profit figures and other elements in the Initial Business Plan are subject to adjustment, and (ii) such adjustment shall comply with the NLF Provisions in the CA and the net profit projected by GGK in its Exhibit C-333.

… mandate that, as at 1 July 2018 (the date that Claimant was to start providing catering services to Respondent) and for 12 months thereafter, all else being equal, Claimant's pricing terms and conditions for its meals and services were not to exceed the pricing terms that were charged by LSGK for meals or services that were the same as, or similar to, Claimant's meals or services, provided that such pricing did not result in Claimant being treated less favourably than was LSGK before the Commencement Date.

(1) HC/OS 580/2021 is to be transferred to the Singapore International Commercial Court pursuant to Order 110 Rules 12 and 58 of the Rules of Court.

(2) In accordance with Order 110 Rules 12(5)(c) and 58(2) of the Rules of Court, after the transfer of HC/OS 580/2021 to the Singapore International Commercial Court, the parties are to continue to pay the hearing fees and court fees that are payable in the General Division of the High Court.

(3) Order 59 of the Rules of Court is to continue to apply to the assessment of costs that are incurred in respect of all proceedings in and arising from HC/OS 580/2021 before its transfer to the Singapore International Commercial Court.

(4) Order 110 Rule 46 of the Rules of Court is to apply to the assessment of costs that are incurred in respect of proceedings in and arising from HC/OS 580/2021 on or after its transfer to the Singapore International Commercial Court.

(5) The issue of whether costs should be assessed on a standard basis or on an indemnity basis is reserved to the Singapore International Commercial Court.

If there has been a breach of any representation, warranty, covenant or obligation set forth in this Agreement, the breaching Party shall indemnify and hold harmless the other Party, its affiliates, servants, officers, directors, employees, agents and contractors from and against any and all liabilities, claims, costs and damages resulting from or arising out of any breach by the breaching Party of any representation, warranty, covenant or obligation in this Agreement.

Asiana agrees that on-time payment of invoices and other amounts due is of the essence under this Agreement, and that any payments not received on the due date therefor shall accrue interest at a rate of 8% per year above the three month LIBOR, or the highest rate chargeable under the applicable law, whichever is lower, until paid in full. Any such interest shall be payable on demand. Asiana agrees that such charge is not a penalty but a true measure of damages incurred by [GGK]. In addition, Asiana shall reimburse [GGK]on a fully indemnified basis for losses incurred by [GGK] (including fees and expenses of legal counsel) with regard to late payments. In case of a dispute regarding an invoice, Asiana shall not be entitled to withhold or set-off the disputed amounts and the mechanism set forth in Clause 8.3 below shall apply.

We emphasise that in deciding whether to order indemnity costs, the court should have regard to all the circumstances of the case, and whether a party has behaved unreasonably (see Three Rivers District Council v The Governor and Co of the Bank of England (No 6) [2006] EWHC 816 (Comm) at [25]). Critically, “[c]osts on an indemnity basis should only be ordered in a special case or where there are exceptional circumstances” (Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties) [2011] 1 SLR 582 at [29]).

[emphasis added]

83 The fundamental purpose of an award of costs in the SICC under O 110 of the ROC is to compensate the successful party for reasonable costs incurred in the legal proceedings. The phrase “reasonable costs” is applicable to all costs, provided that they are reasonable. The qualification that the costs must be reasonable is only intended to provide a means for the court to ensure discipline in the pursuit of the case, as well as to prevent an unsuccessful party from being oppressed by the successful one. It is not intended to incorporate any further attenuation on the basis of considerations of social policy which may be appropriate in domestic courts. The starting point, therefore, in assessing costs in the SICC must be the costs actually incurred by the successful party, ie, the costs payable by the successful party to its solicitors, and its experts or consultants where relevant, which is then subject to the single attenuation for reasonableness.

[emphasis added]