When Is It Too Late To Object? The Court of Appeal Clarifies the Limits of “Impermissible Hedging” in Arbitration

1.  The Singapore Court of Appeal has delivered an important decision on the doctrine of impermissible hedging in international arbitration.

2.    In ONI Global Pte Ltd v GNC Holdings LLC [2026] SGCA(I) 3, the Court dismissed a challenge to the enforcement of an arbitral award and provided detailed guidance on how parties should raise and preserve procedural objections during arbitral proceedings. The decision builds upon and clarifies the principles established in China Machine New Energy Corp v Jaguar Energy Guatemala LLC while drawing important distinctions from CAJ v CAI.

3.    Our Siraj Omar, SC, Larisa Cheng and Kim Bum Soo had the privilege of being instructed as counsel for the GNC in the Appeal.

The Background

4.    The dispute arose out of a franchise relationship between GNC Holdings LLC and ONI Global Pte Ltd. Following an arbitration seated in Pittsburgh, Pennsylvania, the tribunal issued an award largely in favour of GNC, including damages and specific performance relief.

5.    ONI resisted enforcement of the award in Singapore on several grounds, including allegations that GNC had advanced a new and unpleaded claim for post-termination damages during the arbitration. ONI argued that it had been denied a fair opportunity to present its case. The challenge was rejected by both the Singapore International Commercial Court and, ultimately, the Court of Appeal.

The Court’s Analysis

6.    The most significant aspect of the judgment concerns ONI’s conduct after objecting to GNC’s alleged new quantum case.

7.    ONI had applied to strike out the claim on procedural grounds. However, at the same hearing, ONI also proceeded to address the merits of the quantum claim. Before the Singapore courts, ONI contended that the tribunal’s consideration of the claim resulted in a breach of natural justice.

8.     The Court of Appeal rejected this argument.

9.    Relying on China Machine, the Court reaffirmed that a party alleging a serious procedural defect must make its position clear before the tribunal and must identify the remedial steps required to cure the alleged unfairness. A party cannot participate in the proceedings on the merits while reserving the right to argue later that the proceedings were fundamentally unfair.

10.    The Court held that ONI’s conduct amounted to precisely this type of impermissible hedging.

 Distinguishing CAJ v CAI

11.    One of the most noteworthy parts of the judgment is the Court’s treatment of CAJ v CAI.

12.    ONI sought to rely on CAJ v CAI to argue that a party may object to a new case while simultaneously addressing it.

13.    The Court accepted that CAJ v CAI permits a party to raise objections and make limited protective submissions. However, it emphasised that the respondent in CAJ had engaged only in a cursory and defensive manner and had never suggested that it was able to address the merits fully.

14.    The position in ONI Global was materially different. ONI did not merely raise threshold objections. It actively addressed the merits of the impugned claim and never sought the procedural remedies that it later argued were necessary to ensure fairness. The Court therefore concluded that ONI had crossed the line from permissible objection into impermissible hedging.

Practical Implications

15.    The judgment provides several important lessons for arbitration users:

• Procedural objections must be raised clearly and promptly.
• Parties should identify the specific remedial steps required to cure any alleged procedural unfairness.
• Participation on the merits may undermine subsequent complaints about due process.
• Merely reserving rights is not sufficient if a party proceeds as though the arbitration can fairly continue.

16.    The decision serves as a reminder that procedural objections must be pursued consistently and cannot be held in reserve pending the outcome of the arbitration.

Conclusion

17.    ONI Global is likely to become an important authority on the doctrine of impermissible hedging. Together with China Machine and CAJ v CAI, it provides a clearer framework for determining when procedural objections have been properly preserved and when they have been effectively waived through a party’s own conduct.