Cwp v Cwq

• Jurisdiction: Singapore
• Judge: S Mohan J
• Judgment Date: 16 March 2023
• Docket Number: Originating Application No 419 of 2022
• Court: High Court (Singapore)

CWP

and

CWQ

[2023] SGHC 61

S Mohan J

Originating Application No 419 of 2022

General Division of the High Court

Arbitration — Award — Recourse against award — Setting aside — Whether tribunal's decision was in excess of jurisdiction and/or made in breach of natural justice

Held, dismissing the application:

(1) There was no single source which determined, to the exclusion of all others, what issues the parties had placed before the arbitral tribunal for its determination. The court had to take a practical and not an unduly narrow view in considering whether the parties' pleadings, agreed list of issues, opening statements, the evidence adduced and closing submissions in the arbitration, taken together, indicated that the parties contemplated and understood that the issue in question was to be properly submitted for determination by the tribunal. Having reference to these sources, it was clear that there was never any doubt between the parties and the tribunal as to the defendant's arguments on the proper interpretation of Art 3.9: at [26] to [28] and [34].

(2) It was clear from the award that the majority of the tribunal understood but ultimately disagreed with the claimant's arguments on the interpretation of Art 3.9. The claimant's contentions amounted to attempts to nit-pick at isolated parts of the award and were rejected: at [49], [51], [56] and [59].

(3) The majority's decision on the Import Delay Claim was within the scope of submission to arbitration. It was clear from the record that the defendant's arguments on the issue had been sufficiently pleaded: at [70] and [71].

(4) The claimant had over a year to seek discovery from the defendant in respect of its claim that the claimant's failure to obtain national security clearances on time had a “flow on effect”. However, the claimant did not take steps to seek discovery at any time, and could not claim to have been deprived of an opportunity to do so: at [73].

(5) The court could not draw any inference from the majority's reasoning in the award that it had completely failed to address its mind to and decide on the claimant's arguments in relation to the Import Delay Claim: at [88] and [90].

(6) An arbitral tribunal was not required to refer every point in its decision to the parties for submissions, so long as that decision did not represent a dramatic departure from what had been presented to it. The tribunal was free to infer unargued premises which flowed reasonably from the parties' arguments. On the facts and from the arguments presented, it was open to the majority to conclude that there was a “flow on effect” from the claimant's failure to obtain national security clearances on time: at [92].

(7) There was no breach of natural justice occasioned by the majority's decision on the Typhoon Claim. The majority had considered and disagreed with the claimant's arguments on the proper interpretation of Art 22 of the Contract as to whether a typhoon was a “natural catastrophe”. The majority also did not contradict itself as contended by the claimant. Even if it did, no prejudice was occasioned to the claimant. This was because the tribunal had also found that, irrespective of whether a typhoon was a “natural catastrophe” under Art 22, neither party had contended that the typhoon had caused any party to fail to meet any requirement under the Contract, which was an additional requirement to be met before Art 22 could apply. These were all conclusions arrived at by the tribunal on the merits and it was not for the court to decide whether the tribunal's conclusions were right or wrong: at [99] to [102], [104] and [105].

Case(s) referred to

Adyard Abu Dhabi v SD Marine Services(2011) 136 Con LR 190 (refd)

AKN v ALC[2015] 3 SLR 488 (refd)

Arnold v Britton[2015] 2 WLR 1593 (refd)

Bloomberry Resorts and Hotels Inc v Global Gaming Philippines LLC[2021] 2 SLR 1279 (refd)

BZW v BZV[2022] 1 SLR 1080 (refd)

CAJ v CAI[2022] 1 SLR 505 (folld)

CDM v CDP[2021] 2 SLR 235 (folld)

CFJ v CFL[2023] SGHC(I) 1 (folld)

China Machine New Energy Corp v Jaguar Energy Guatemala LLC[2020] 1 SLR 695 (refd)

CJA v CIZ[2022] 2 SLR 557 (folld)

L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd[2013] 1 SLR 125 (folld)

Multiplex Constructions (UK) Ltd v Honeywell Control Systems Ltd (No 2)(2007) 111 Con LR 78 (refd)

Ng Koon Yee Mickey v Mah Sau Cheong[2022] 2 SLR 1296 (refd)

Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd[2007] 3 SLR(R) 86; [2007] 3 SLR 86 (folld)

TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd[2013] 4 SLR 972 (refd)

TYN Investment Group Pte Ltd v ERC Holdings Pte Ltd[2020] 5 SLR 894 (not folld)

Facts

The claimant engaged the defendant as a subcontractor to carry out dredging and land reclamation works in a port. Pursuant to the contract between the parties (the “Contract”), the defendant was to deploy four vessels to carry out the works: a trailing suction hopper dredger (the “Hopper”), a cutter section dredger (the “Cutter”) and two split hopper barges (the “Barges”). The works were to be completed by 24 August 2017. There were periods of stoppages in operations owing to various incidents, and the defendant completed the works two days late on 26 August 2017. The defendant commenced arbitration against the claimant seeking compensation under Art 3.9 of the Contract in respect of these incidents, which included, inter alia, (a) delay in procuring import permits for the Barges (the “Import Delay Claim”) and (b) evacuation of the vessels to evade a typhoon (the “Typhoon Claim”). In its award, the tribunal decided by a majority that the claimant was liable to pay compensation in respect of the stoppages.

The claimant applied for that part of the award relating to the majority's decision on the defendant's Art 3.9 claim to be set aside on three grounds. First, in determining the proper interpretation of Art 3.9 of the Contract, the majority exceeded the scope of the parties' submission by accepting arguments not pleaded in the notice of arbitration and not applying its mind to the claimant's arguments. Second, in deciding the Import Delay Claim, the majority accepted unpleaded arguments by the defendant and failed to give the claimant a full opportunity to present its case. This led to its finding that the claimant's failure to obtain national security clearances on time from the authorities concerned had a “flow on effect” leading to delays in obtaining import permits for the Barges. Third, in finding the claimant liable in respect of the Typhoon Claim, the majority failed to address a gap in the evidence and failed to address the issue of whether the stoppage was attributable to the claimant.

The defendant argued that there was no basis for any part of the Award to be set aside. The defendant contended that its arguments were sufficiently pleaded, that the majority was entitled to make the findings it did, and that the claimant was seeking impermissibly to review the merits of the majority's decision.

Legislation referred to

International Arbitration Act 1994 (2020 Rev Ed) s 24(b)

Ong Boon Hwee William, Lim Jun Rui Ivan, Chong Xue Er CherylandDion Loy Chen Hin (Li Zhengxian) (Allen & Gledhill LLP) for the claimant;

Tan Cheng Han SC (instructed), Balachandrans/oPonnampalam, Kok Jia An AlwynandIffera Ng Lu Hui (Robert Wang & Woo LLP) for the defendant.

16 March 2023

Judgment reserved.

S Mohan J:

1 It is well established that the principle of party autonomy undergirds the arbitration regime in Singapore. A facet of party autonomy is that the disputing parties select the arbitrators they wish to make up the tribunal or, at the least, agree on the process by which the tribunal is to be constituted. The flipside of this autonomy is that parties take the arbitrators as they are.

2 It is also well established that our courts firmly maintain a policy of minimal curial intervention in arbitral disputes, subject to a narrow and exhaustive list of exceptions. A court will not intervene in an arbitral award on the mere allegation by a party that the tribunal got the decision wrong. Under the statutory regime in Singapore governing international arbitrations, a party dissatisfied with a tribunal's award has no recourse to the court's appellate jurisdiction to overturn the decision on its merits. A court may however intervene if, for example, there has been a failure of process resulting in a breach of natural justice.

3 A complaint that a breach of natural justice has been occasioned in the making of an arbitral award can take different forms – one instance where a court may intervene is if it can be demonstrated clearly that an arbitral tribunal completely failed to consider or apply its mind to an important issue or argument that was raised for its consideration and decision. However, for a court to be so satisfied, that conclusion or inference must, as the Court of Appeal reminds us, be a virtually inescapable one (AKN and another v ALC and others and other appeals[2015] 3 SLR 488 (“AKN”) at [46]):

46 … 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...