Bovis Lend Lease Pte Ltd v Jay-Tech Marine & Projects Pte Ltd and Another Application

• Jurisdiction: Singapore
• Judge: Judith Prakash J
• Judgment Date: 06 May 2005
• Neutral Citation: [2005] SGHC 91
• Court: High Court (Singapore)
• Year: 2005
• Published date: 10 May 2005
• Plaintiff Counsel: Melvin See (Wong Partnership)
• Defendant Counsel: Raymond Lye and Cheryl Ann Yeo (Tay Lye and Ngaw Partnership)
• Subject Matter: Arbitration,Arbitral tribunal,Administration of arbitration,Whether contract provided for institutional arbitration or ad hoc arbitration,Singapore international arbitration centre,Appointing authority,Whether Singapore International Arbitration Centre or another party the appointing party,Whether Notice of Arbitration issued by defendant in breach of subcontract between parties,Rules 1997,Domestic Rules 2002,Which set of rules to be applied to arbitration
• Citation: [2005] SGHC 91

6 May 2005

Judith Prakash J:

Introduction

1 In this Originating Summons (“OS 77”), the plaintiff is Bovis Lend Lease Pte Ltd (“Bovis”) and the defendant is Jay-Tech Marine & Projects Pte Ltd (“Jay-Tech Marine”). In Originating Summons No 166 of 2005 (“OS 166”), Jay-Tech Marine is the plaintiff and Bovis is the defendant. Both proceedings raised the same issues and this judgment explains my decision on those issues.

2 In OS 77, Bovis sought the following declarations:

(a) that on a proper construction of the arbitration agreement set out in cl 13 of Subcontract No 2057 between Bovis and Jay-Tech Marine dated 16 May 2003 (“the Subcontract”), the arbitrator, in the absence of agreement between the parties, should be appointed by the Institute of Architects in Singapore; and

(b) that the Notice of Arbitration dated 28 December 2004 to the Singapore International Arbitration Centre (“SIAC”) issued by Jay-Tech Marine was in breach of the Subcontract.

3 In OS 166, Jay-Tech Marine sought the following orders:

(a) that the court determine and grant a declaration, on a proper construction of the Subcontract, whether the arbitration is to be administered by the SIAC or is to be an ad hoc arbitration;

(b) in the event that the court should find that the arbitration is to be administered by the SIAC, that the court declare that the SIAC shall administer the arbitration after the arbitrator has been appointed by the Institute of Architects;

(c) in the alternative, in the event that the court should find that the arbitration is to be administered by the SIAC, that the court declare that the Notice of Arbitration issued by Jay-Tech Marine to the SIAC is valid and that, under the SIAC Domestic Arbitration Rules (“the Domestic Rules”), the SIAC shall appoint the arbitrator;

(d) in the alternative, in the event that the court should find that the arbitration is to be an ad hoc arbitration, that the court declare that the arbitrator appointed by the Institute of Architects shall conduct the ad hoc arbitration according to the SIAC rules wherever applicable; and

(e) in the alternative, in the event that the court should find that the arbitration is to be an ad hoc arbitration, that the court determine the rules according to which the appointed arbitrator should conduct the arbitration and make a declaration to that effect.

Background

4 The two sets of proceedings arose in the following circumstances. By the Subcontract, Bovis had appointed Jay-Tech Marine as a subcontractor to supply and install certain structural steel works at the Biopolis building project in Singapore. In August 2004, a dispute arose over a claim by Jay-Tech Marine for the payment of the sum of $755,729.98 for alleged additional and/or varied works that it had carried out.

5 The dispute resolution provisions of the Subcontract are contained in cl 13. The relevant portions of this clause are as follows:

13.1 Dispute Resolution

13.1.1 If a dispute arises out of or in connection with the Subcontract at any time then either party may give the other a written notice identifying the particulars of the dispute. Within 5 days of receipt of the notice the parties must meet and attempt to resolve the dispute. If the dispute is not resolved within 10 days of receipt of the notice, the dispute will be dealt with in the manner provided in this Part 13.

…

13.3 Arbitration

All other disputes (including disputes referred to in Clause 13.2.1 which are not required by [Bovis] to be determined in accordance with Clause 13.2) will be dealt with in the following manner:

13.3.1 After the expiration of 10 days from the issue of the written notice identifying the particulars of the dispute, the issuer may notify the other party by written notice that it requires the dispute to be referred to arbitration and the dispute, upon the issue of that notice, will be referred to arbitration.

13.3.2 Unless otherwise agreed by the parties, the arbitrator will be appointed by the President of the Institute of Architects in Singapore (or such other body as carries on the functions of the Institute) or his nominee.

13.3.3 The arbitrator must conduct the proceedings in accordance with Rules of the Singapore International Arbitration Centre

…

13.4 Security Deposit

When a notice of dispute is served under Clause 13.1 the party serving the notice must provide evidence that it has deposited with the Institute of Architects in Singapore, the sum of SDG2,000 by way of security for costs of the Expert Determination or the arbitration, as the case may be.

6 On 5 October 2004, Jay-Tech Marine’s solicitors, M/s Tay Lye & Ngaw Partnership (“TLN”), wrote to Bovis’ solicitors, M/s Wong Partnership (“WP”), stating that pursuant to cl 13.3.1 read with cl 13.1 of the Subcontract, they were giving notice of a dispute between the parties, being Jay-Tech Marine’s claim for the sum of $755,729.98. TLN enclosed a copy of their letter to the Singapore Institute of Architects as evidence that a sum of $2,000 had been paid to the latter by way of security for costs of an expert determination or arbitration. WP did not accept this letter as evidence that the deposit had been paid and there was some subsequent correspondence between the parties on this issue until early November when WP were furnished with a copy of a letter from the Singapore Institute of Architects acknowledging receipt of $2,000.

7 The parties then endeavoured to agree on an arbitrator. Unfortunately, however, for one reason or another, the candidates nominated by each party were not acceptable to the other. The question then arose as to whom the appointing authority should be in the event of the parties’ failure to agree. Clause 13.3.2 provided for the appointing body to be the “Institute of Architects in Singapore”. This term was taken by both parties to mean the “Singapore Institute of Architects” and nothing turned on this slight difference in terminology. TLN, however, noting that cl 13.3.3 provided for the arbitrator to conduct the arbitration in accordance with the “Rules of the SIAC”, examined the Domestic Rules (2nd Ed, 1 September 2002). The Domestic Rules indicated that, in respect of arbitrations that they regulated, the arbitrator was to be appointed by the chairman of the SIAC irrespective of any contrary indication in the underlying contract. Additionally, parties were not to deal directly with the arbitrator on fees; these would be settled between the arbitrator and the SIAC.

8 TLN then checked with one Mr Ganesh Chandru of the SIAC. He asked for a copy of cl 13 of the Subcontract. Subsequently he informed TLN that, in view of the Subcontract provisions, he was of the view that the Domestic Rules took precedence over the Subcontract provisions and the SIAC ought to appoint the arbitrator. On 28 December 2004, TLN gave notice of arbitration pursuant to the Domestic Rules. WP objected to this notice. They took the view that the arbitration was an ad hoc arbitration and that the appointing authority should be the Singapore Institute of Architects.

9 On 7 January 2005, TLN invited Bovis to confirm whether it agreed to have the matter referred to arbitration under the Singapore Institute of Architects. This was because Jay-Tech Marine desired an expeditious resolution of the matter and was prepared to follow whichever arbitral path Bovis preferred. On 19 January 2005, WP sent TLN a letter at about 1.00pm requiring them to confirm by 4.00pm that Jay-Tech Marine would withdraw the SIAC notice failing which Bovis would apply to court. At 6.00pm that day, WP informed TLN that since no reply had been received, an application to court would be taken out.

10 TLN replied on the same day stating that in view of WP’s position that the arbitration ought to be commenced with the Singapore Institute of Architects, they would withdraw the SIAC notice immediately. The next day, WP replied to state that OS 77 had been e-filed the previous day. They further asserted that Bovis had not reached any agreement with Jay-Tech Marine in the previous correspondence. It had merely set out its position on the proper approach required under the arbitration agreement in the Subcontract.

11 On 27 January 2005, the Singapore Institute of Architects sent the parties a letter stating the amount of arbitrator’s fees payable for an arbitrator appointed by the Singapore Institute of Architects. TLN then took the view that the court’s assistance was required for the interpretation of the Subcontract because this...