Black and Veatch Singapore Pte Ltd v Jurong Engineering Ltd

• Jurisdiction: Singapore
• Judge: Chao Hick Tin JA
• Judgment Date: 08 July 2004
• Neutral Citation: [2004] SGCA 30
• Docket Number: Civil Appeal No 125 of 2003
• Date: 08 July 2004
• Published date: 26 July 2004
• Year: 2004
• Plaintiff Counsel: Steven Chong SC and Vivien Teng (Rajah and Tann)
• Citation: [2004] SGCA 30
• Defendant Counsel: Mohan Pillay and Christopher Chong (Wong Partnership)
• Court: Court of Appeal (Singapore)
• Subject Matter: Rules,Whether Arbitration Rules of SIAC or SIAC Domestic Arbitration Rules applicable,Arbitration,Presumption in favour of procedural rules in force at commencement of arbitration,Clause in contract providing for arbitration to be conducted "in accordance with the rules of arbitration promulgated by the Singapore International Arbitration Centre",Conduct of arbitration

8 July 2004

Woo Bih Li J (delivering the judgment of the court):

Background facts

1 On 4 January 2000, the appellants, Black & Veatch Singapore Pte Ltd (“B&V”), and the respondents, Jurong Engineering Ltd (“Jurong”), entered into a contract known as Structural Steel 61.4001 (“the steel contract”). Under the steel contract, Jurong agreed to erect steel works for B&V for the Tuas II Combined Cycle Power Plant Project at Tuas South Avenue 9 (“the construction project”).

2 The main contractors for the construction project were an international consortium comprising B&V, Black & Veatch International Co (a related company incorporated in the United States), Mitsubishi Corporation and Mitsubishi Heavy Industries Ltd (both incorporated in Japan). The contract was one of several sub-contracts and supply agreements entered into for the construction project.

3 The General Conditions in the contract included cl GC42.2.1 (“the Clause”). The second sentence of the Clause (“the Second Sentence”), was the subject of the dispute:

GC42.2.1 Arbitration. If no settlement is achieved within sixty days, either party may submit its claim to arbitration before a single arbitrator to be agreed between the parties, or failing agreement within fourteen calendar days after either party has given to the other written request to concur in the appointment of an Arbitrator, a person to be appointed on the request of either party by the Chairman or Vice-Chairman for the time being of the Singapore International Arbitration Center. Any arbitration will be conducted in English in Singapore under and in accordance with the rules of arbitration promulgated by the Singapore International Arbitration Center. [emphasis added]

4 After differences arose between the parties, Jurong commenced arbitration proceedings against B&V by issuing a notice of arbitration on 10 July 2003. The notice was issued under r 7 of the SIAC Domestic Arbitration Rules (“the SIAC Domestic Rules”). The acronym SIAC refers to the Singapore International Arbitration Centre.

5 B&V objected to the application of the SIAC Domestic Rules, and contended that the Arbitration Rules of the SIAC (“the SIAC Rules”) should apply to the proceedings. Jurong then took out an originating summons for the court to decide, on a true construction of the Clause, which set of rules should apply. The parties have, pending the resolution of this dispute, proceeded with the arbitration on the basis that the SIAC Domestic Rules should apply.

6 The judge below decided that the SIAC Domestic Rules applied to the arbitration between the parties: see Jurong Engineering Ltd v Black & Veatch Singapore Pte Ltd [2004] 1 SLR 333. B&V appealed against this decision and after hearing submissions, we dismissed the appeal with costs. We set out below our reasons.

The SIAC Rules and the SIAC Domestic Rules

7 At the time the steel contract was made on 4 January 2000, the SIAC had only one set of rules: the SIAC Rules. The SIAC Domestic Rules were introduced later on 1 May 2001.

8 It was common ground that if the SIAC Rules applied, then the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”) was also applicable and if the SIAC Domestic Rules applied, then the Arbitration Act (Cap 10, 2002 Rev Ed) (“AA”) was also applicable.

9 The differences between the IAA and the AA as set out by B&V can be grouped into two main heads:

(a) Under the IAA, no appeal may be brought in respect of the arbitral award although such an award may be set aside on certain grounds. Under the AA, an appeal may be brought against an arbitral award on questions of law, in addition to an award being set aside on certain grounds.

(b) Court intervention under the IAA is more restricted than under the AA.

Our reasons

10 B&V argued that the judge below was wrong to conclude that the parties could only refer to the SIAC Rules by using the full title thereof.

11 Paragraphs 10 to 13 of the grounds of judgment below ([6] supra) state:

10 Firstly, it was clear to me that the words of the arbitration clause were very general. If it had been intended that the SIAC Rules were to govern the arbitration, specific reference to the “Arbitration Rules of Singapore International Arbitration Centre” should have been made. This was and has been the full title of the SIAC Rules since they were issued in 1991, when the SIAC was established.

11 In this regard, the SIAC at all material times had clearly recommended that parties use a Model Clause if they wished their arbitration to be governed by the SIAC Rules. The Model Clause was set out on the first page of the SIAC Rules. As is well known, Model Clauses are offered by well-established arbitral institutions, such as the ICC Court of Arbitration and the London Court of International Arbitration (“LCIA”).

12 The Model Clause, which appeared in both the 1991 and the 1997 editions of the SIAC Rules, reads as follows:

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in [Singapore] in accordance with the Arbitration Rules of Singapore International Arbitration Centre (“SIAC Rules”) for the time being in force which rules are deemed to be incorporated by reference to this clause.

13 Parties were free to adopt the Model Clause, but they did not. In any event, the preamble to both the 1991 and 1997 edition of the SIAC Rules provided:

Where any agreement, submission or reference provides for arbitration under the Arbitration Rules of Singapore International Arbitration Centre (“the Centre”), the parties thereto shall be taken to have agreed that the arbitration shall be conducted in accordance with the following Rules …

This suggested that the SIAC Rules would only apply if specific reference is made to the...