Cod v Coe
Jurisdiction | Singapore |
Judge | Philip Jeyaretnam J |
Judgment Date | 25 May 2022 |
Docket Number | Originating Summons No 925 of 2021 |
Court | High Court (Singapore) |
[2022] SGHC 126
Philip Jeyaretnam J
Originating Summons No 925 of 2021
General Division of the High Court
Arbitration — Award — Recourse against award — Setting aside — Arbitrator issuing interim award when parties did not agree to bifurcation — Whether arbitrator breached agreed procedure — Section 48(1)(a)(v) Arbitration Act (Cap 10, 2002 Rev Ed)
Arbitration — Award — Recourse against award — Setting aside — Measure of damages not identified in notice of arbitration and statement of claim — Whether party was unable to present its case — Section 48(1)(a)(iii) Arbitration Act (Cap 10, 2002 Rev Ed)
Arbitration — Award — Recourse against award — Setting aside — Measure of damages not identified in notice of arbitration and statement of claim — Whether there was breach of rules of natural justice — Section 48(1)(a)(vii) Arbitration Act (Cap 10, 2002 Rev Ed)
Held, dismissing the application:
(1) So long as an arbitrator behaved in an even-handed fashion, there was generally no bar to an arbitrator asking for further submissions in the course of arbitration proceedings, including after post-hearing written or oral submissions and while deliberating prior to an award. In principle, an arbitrator was also entitled to determine those issues on which he had reached a decision in an interim award and invite further submissions on other points for a further award: at [39].
(2) It was not the case that arbitrators had to be mere automatons, motionless unless activated by either party. The fact that dissatisfaction with the outcome of an arbitration could only be expressed in terms of procedural complaints such as breach of natural justice or departure from agreed procedure could not be allowed to deprive arbitrators of their procedural discretion and control of proceedings. Arbitrators sought to do justice between the parties, and the objective of doing justice in a case was served both by procedure and the substantive law: at [40].
(3) The claim for damages in lieu of specific performance based on the formula of balance contract price less scrap value was introduced before the evidentiary hearing. The formula was perfectly clear in COE's witness statement quantification. A claim for damages in lieu of specific performance had been pleaded, and it would only be reasonable for COD's counsel to read COE's witness statements in full and address those parts, however relatively short they might be, that concerned COE's alternative claim in damages. What mattered was that COE's witness statement quantification was unambiguous. It would have been clear to anyone who had read COE's witness statement quantification that COE was relying on the formula of balance contract price less scrap value: at [47] to [49].
(4) COD's counsel was not entitled to disregard COE's witness statement quantification just because the formula had not been spelled out in the notices of arbitration or the statements of claim. Such a position could only begin to be justified if parties had adopted formal pleading rules that required the measure of damages for general damages claims to be spelled out in the pleadings: at [50].
(5) Even in court proceedings, it might happen that new or more detailed or alternative methods for calculating damages could be introduced otherwise than by formal amendment of pleadings. The question was whether the other party had sufficient notice and opportunity to deal with it. While COE might not have specifically pleaded its method for calculating damages for non-acceptance of the Cranes, the method was sufficiently set out prior to the commencement of the evidentiary hearing in COE's witness statement: at [51].
(6) Because COE's claimed measure of damages was introduced prior to the evidentiary hearing, there could be no question that COD was given a fair and reasonable opportunity to respond to it: at [58].
AKN v ALC [2015] 3 SLR 488 (distd)
Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873 (distd)
CAJ v CAI [2022] 1 SLR 505 (distd)
GD Midea Air Conditioning Equipment Co Ltd v Tornado Consumer Goods Ltd [2018] 4 SLR 271 (refd)
Lee Chee Wei v Tan Hor Peow Victor [2007] 3 SLR(R) 537; [2007] 3 SLR 537 (refd)
Perestrello e Companhia Limitada v United Paint Co Ltd [1969] 1 WLR 570 (distd)
Phoenixfin Pte Ltd v Convexity Ltd [2022] 2 SLR 23 (refd)
PT Prima International Development v Kempinski Hotels SA [2012] 4 SLR 98 (refd)
Shravan, The [1999] 2 SLR(R) 713; [1999] 4 SLR 197 (refd)
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86; [2007] 3 SLR 86 (folld)
The applicant (“COD”) was a shipbuilder. The defendant (“COE”) was a company that made marine and offshore equipment. COE contracted to make and deliver to COD two identical fibre rope cranes (the “Cranes”). While COD considered fibre rope cranes to be better than traditional steel wire rope cranes, such cranes were quite new to the market. The Cranes were intended to be mounted on COD's vessels for use in offshore operations.
There was one contract for each crane on the same terms (“the contracts”). After the contracted delivery dates for the Cranes had passed, COD terminated each of the contracts on grounds of non-compliance with contractual specifications and requirements. COD did not take delivery of the Cranes.
COE commenced two arbitrations, alleging breach of contract on the basis of COD's wrongful refusal to take delivery of the Cranes. COE sought specific performance and payment of the balance contract price of the Cranes, with damages sought in the alternative. COE's primary claim for specific performance rested on the point that the Cranes were unique, given the novelty of using fibre rope instead of steel wire, and that it would be difficult to find an alternative buyer. Consequently, COE contended that damages would not be an adequate remedy. Nonetheless, COE also claimed damages in the alternative to specific performance. A single arbitrator was appointed for both arbitrations (the “arbitrator”).
In a witness statement of COE's consultant filed in the arbitration (the “COE witness statement”), it was briefly explained that if specific performance was not granted, the quantum of damages claimed would match the full price of the Cranes in addition to the other claimed costs such as storage costs. The reason given was that there was no secondhand market for the Cranes and therefore the purchase price would be a fair and reasonable reflection of COE's loss and damage suffered as a result of COD's breach. At best, the Cranes had a certain scrap value which was insignificant compared to the purchase price.
On 28 April 2020, the arbitrator issued an interim award. The arbitrator decided that while the Cranes did not comply with contractual specifications, this non-compliance was not sufficiently material to justify COD's termination of the contracts. COD's termination was thus wrongful and in breach of the contracts. However, specific performance was not the appropriate remedy. The arbitrator decided that damages were the just and appropriate remedy, and invited further submissions on the quantum of damages.
COD's counsel wrote on 20 July 2020 to state that COD's position was that the arbitrator had no right or power to direct an assessment as there had been no agreement between the parties to the bifurcation of the matter. COD expressed its disagreement to any further submissions on damages. In response, the arbitrator fixed a timeline for submissions on damages and costs and gave notice that if either party did not comply, he would nonetheless proceed on the basis of the evidence and submissions received.
COD and COE filed submissions on damages on 28 August 2020. On 1 September 2020, COD's counsel wrote to object to COE's claim for damages amounting to the purchase price less part-payments and scrap value on the basis that it was not pleaded. COD asked that any claim for damages or losses not pleaded, or for which no evidence had been led by COE, be disregarded by the arbitrator.
The arbitrator issued his final award on 21 June 2021 (the “final award”). The arbitrator awarded damages to COD based on the purchase price of the Cranes less the scrap value.
COD then filed its application to set aside the whole of the final award. COD argued it that had been unable to present its case and/or there was a breach of natural justice in connection with the making of the award because the measure of damages adopted by the arbitrator had not been pleaded or otherwise properly introduced into the proceedings and/or COD was not given the opportunity to put in evidence in relation to it. COD also argued that the arbitrator had proceeded contrary to the arbitral procedure agreed by parties, namely, to have only one tranche of hearing without bifurcation of liability and quantum.
Arbitration Act (Cap 10, 2002 Rev Ed) ss 48(1)(a)(iii), 48(1)(a)(v), 48(1)(a)(vii) (consd); s 48
International Arbitration Act 1994 (2020 Rev Ed)
Chan Leng Sun SC (Chan Leng Sun LLC) andRachel Low Tze-Lynn (Rachel Low LLC) (instructed), Kwek Choon Lin WinstonandLim Zhi Ming Max (Rajah & Tann Singapore LLP) for the applicant;
Tan Boon Yong Thomas and Benjamin Tan Ren Jie (Haridass Ho & Partners) for the respondent.
25 May 2022
Judgment reserved.
Philip Jeyaretnam J:
1 Arbitration, like any process for dispute resolution, is dynamic. Parties make choices of what to emphasise and what to contest. The arbitrator must make sense of what may be complex submissions that interlock and interact. It is generally not wrong for an...
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