Doshion Ltd v Sembawang Engineers and Constructors Pte Ltd

• Jurisdiction: Singapore
• Judge: Choo Han Teck J
• Judgment Date: 28 February 2011
• Neutral Citation: [2011] SGHC 46
• Plaintiff Counsel: A Verghis and Sandra Tan (Drew & Napier LLC)
• Docket Number: Originating Summons No 132 of 2011 (Summons No 767 of 2011)
• Date: 28 February 2011
• Hearing Date: 24 February 2011
• Subject Matter: Arbitration
• Published date: 28 February 2011
• Citation: [2011] SGHC 46
• Defendant Counsel: Mohan Pillay and Yeo Boon Tat (MPillay)
• Court: High Court (Singapore)
• Year: 2011

Choo Han Teck J:

Doshion Limited (“the plaintiff”) is an Indian Company and Sembawang Engineers and Constructors Pte Ltd (“the defendant”) is a Singaporean Company. The plaintiff was the defendant’s sub-contractor. A dispute arose from two sub-contracts (“the Sub-Contracts”) between them. The parties commenced arbitration proceedings (“the Arbitration”) under the arbitration clause in the Sub-Contracts. The Arbitration was scheduled for ten days and was to start on Monday, 28 February 2011. On Thursday, 24 February 2011 the plaintiff applied in this Originating Summons to stop the arbitration, and prayed for: (1) A declaration that the plaintiff and the defendant had reached a binding settlement agreement on a “drop hands” basis (“the Settlement Agreement”) for all disputes in respect of or in connection with the Arbitration. (2) A declaration that the Arbitration was terminated pursuant to the Settlement Agreement; and (3) An injunction to restrain the defendant from continuing with the Arbitration. Counsel for the plaintiff submitted that all disputes in the Arbitration were settled on 15 February 2011 because the plaintiff had accepted the defendant’s proposal in the Settlement Agreement (which counsel conceded was an oral agreement reached between the solicitors for the parties). As such, counsel argued, the Arbitration should have been terminated as of that date.

The defendant disputed the existence of the Settlement Agreement. Further, the defendant contended that the right and power to decide whether there was a Settlement Agreement lay within the jurisdiction of the arbitral tribunal. The defendant interpreted the plaintiff’s argument to be a claim that the arbitral tribunal had become functus officio by reason of the Settlement Agreement. This argument that the arbitral tribunal had become functus officio amounted to a challenge to the tribunal’s jurisdiction. In support of this, the defendant relied on the case of Dawes v Treasure & Son Ltd [2010] EWHC 3218 where it was accepted that the issue of whether an arbitrator is functus officio went to the jurisdiction of the arbitrator. In my view, the position of the arbitrator in this case was not functus when it had not even begun to hear.

If there is no dispute between the parties, naturally the arbitration clause cannot be invoked. However, once a dispute arises, including a dispute as to whether there is a dispute at all, the matter falls into the hands of the...