The Gunners responded well to going behind in the second half and equalised through youngster Emile Smith Rowe’s wonder strike from the edge of the box which flew into the top corner.
The inevitable mass substitutions from both sides, with Arsenal slinging on ten players in Singapore including bringing on summer signing Sokratis, disrupted the flow of the game in the final 30 minutes.
And in the shootout, Henrikh Mkhitariyan, Eddie Nketiah and Joe Willock missed their spot-kicks with keeper Adan firing the winning penalty past Petr Cech to seal victory.
Emery's side are next in friendly action against Paris St-Germain on Saturday.
Atlético schlägt Arsenal beim International Champions Cup
Image credit: Getty Images
MAN OF THE MATCH
Emile Smith Rowe (Arsenal): The 17-year-old was impressive at set pieces and his driving runs. And he capped off a mature display with a wonder strike.