L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 29 November 2013
• Neutral Citation: [2013] SGHC 264
• Court: High Court (Singapore)
• Docket Number: Originating Summons No 29 of 2013
• Published date: 11 December 2013
• Year: 2013
• Hearing Date: 26 July 2013,16 April 2013
• Plaintiff Counsel: Tan Liam Beng, Soh Chun York and Eng Cia Ai (Drew & Napier LLC)
• Defendant Counsel: Chia Swee Chye (Samuel Seow Law Corporation)
• Subject Matter: Arbitration,Award
• Citation: [2013] SGHC 264

Belinda Ang Saw Ean J: Introduction

This is the latest instalment in a long-running dispute between a main contractor and its sub-contractor in relation to the construction of an industrial building at 31 Toh Guan Road East (“the Project”). The present application vide Originating Summons No 29 of 2013 (“OS 29/2013”) raises interesting questions about the point or stage at which an arbitral tribunal becomes functus officio or ceases to have jurisdiction in an arbitration. The thrust of the present debate relates to what happens to the arbitration after an arbitral award has been set aside.

OS 29/2013 was filed after the Court of Appeal affirmed the setting aside of an additional award for pre-award interest (“the Additional Award”) issued by a sole arbitrator (“the Tribunal”) pursuant to s 43(4) of the Arbitration Act (Cap 10, 2002 Rev Ed) (“the Act”) on the ground that it had been made in breach of the rules of natural justice, the Tribunal having failed to give the unsuccessful party an opportunity to reply or make submissions on the issue. Full reasons for the setting aside of the Additional Award are reported in the decision of the Court of Appeal in L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal [2013] 1 SLR 125 (“L W Infrastructure CA”).

In bringing OS 29/2013 for, inter alia, the determination of three questions of law, the plaintiff, L W Infrastructure Pte Ltd (“LWI”), essentially seeks a declaration that the Tribunal retains jurisdiction to issue yet another additional award for pre-award interest under s 43(4) of the Act following the setting aside of the Additional Award. This application followed the Tribunal’s refusal to issue such an award on the basis that it had no power to do so, having become functus officio upon the issuance of the Additional Award.

LWI’s present application is brought under s 45 of the Act. Subsequently, two other provisions, namely s 36 and s 21(9) of the Act, were introduced. The defendant, Lim Chin San Contractors Pte Ltd (“LCSC”), opposes this application in its entirety. LCSC’s position is that LWI’s application is fundamentally misconceived as none of the statutory provisions apply to this case.

Background to OS 29/2013 Events leading up to the setting aside of the Additional Award.

LWI, the main contractor for the Project, appointed LCSC as its sub-contractor under a sub-contract which contained an arbitration clause. Subsequently, various disputes arising out of the sub-contract were referred to arbitration. On 29 June 2010, the Tribunal rendered an award (“the Final Award”) in which LWI was awarded the sum of $341,391.10 “with simple interest at the rate of 5.33% p.a. from the date of this Award”. On 15 July 2010, a supplementary award was issued to correct certain typographical errors in the Final Award.

Being dissatisfied with the Tribunal’s decision, LWI filed an appeal on various questions of law by way of Originating Summons No 759 of 2010 (“OS 759/2010”). LCSC filed a cross-appeal by way of Originating Summons No 769 of 2010. On 5 July 2011, the High Court dismissed LCSC’s appeal and substantially allowed LWI’s appeal. On 21 September 2011, following the Orders of Court handed down by the High Court, the Tribunal rendered another supplementary award (“the Supplementary Award”), in which LWI was awarded the sum of $603,608.90 with “simple interest at the rate of 5.33% p.a. on the sum of S$603,608.90 from the date of this Supplementary Award” (ie, post-award interest).

After reviewing the Supplementary Award, LWI was of the view that the Tribunal had omitted to award pre-award interest on the sum, and requested the Tribunal to grant an additional award for pre-award interest by way of a written request dated 17 October 2011 (“the First Request”). Three days passed. The other party, LCSC, did not respond to the request. On 20 October 2011, the Tribunal then rendered the Additional Award providing for pre-award interest in favour of LWI.

Subsequently, LCSC successfully applied to the High Court under Originating Summons No 988 of 2011 (“OS 988/2011”) to set aside the Additional Award on the ground that it had been made in breach of the rules of natural justice. The High Court however declined to declare the Additional Award a nullity on the basis that the court did not have an inherent or residual discretion to make a declaration as to the validity of an arbitral award outside the express statutory grounds for setting aside.

LWI appealed the decision to set aside the Additional Award and LCSC cross-appealed against the decision not to declare the Additional Award a nullity. On 18 October 2012, in L W Infrastructure CA, the Court of Appeal upheld the High Court’s decision to set aside the Additional Award as well as not to declare the Additional Award a nullity. The Court of Appeal in L W Infrastructure CA declined to remit the matter to the Tribunal, stating as follows (at [93]):

By reason of the matters aforesaid, we affirm the decision of the Judge setting aside the Additional Award. In the course of the arguments, we invited submissions on whether and if so what consequential orders we should make in this event. Counsel for the parties had different views. Mr Tan for [LWI] suggested that the proper course would be for us to remit the matter to the Arbitrator. Mr Chia Swee Chye Kelvin ("Mr Chia") for [LCSC] did not agree that this would be appropriate in the circumstances. Mr Chia contended that (a) it was doubtful whether the court had a power to remit at all in such circumstances; (b) the only relief sought was for the Additional Award to be set aside and once that was done, it was up to [LWI] to attempt to revive its application, and if they did so, [LCSC] would contend that this was impermissible because it would fall outside the statutory time limits provided in the Act for an application to be made under s 43(4) of the Act; and (c) even if these hurdles could be overcome, [LCSC] might have objections to the matter being returned to the Arbitrator in all the circumstances. These points were not fully argued before us. Furthermore, the only issue before us was whether the order setting aside the Additional Award should be affirmed. Accordingly, we confine ourselves to this and make no special consequential orders. [emphasis added]

Events after the setting aside of the Additional Award

Taking the position that the setting aside of the Additional Award returned the arbitral proceedings to the state that existed up to the moment immediately preceding the making of the Additional Award and by way of a letter dated 31 October 2012 (“the Revival Request”), LWI wrote to the Tribunal reiterating its request made on 17 October 2011 for an additional award of pre-award interest to be issued. The parties exchanged several rounds of submissions in the form of letters.

LCSC marshalled the points foreshadowed in L W Infrastructure CA at [93] (extracted above at [9]) to oppose first LWI’s Revival Request and thereafter OS 29/2013. Its main contention was that the Tribunal was functus officio as the time for making the additional award had expired. LCSC pointed out that under s 43(5) of the Act, the Tribunal was required to issue an additional award within 60 days of LWI’s request. According to LCSC, after these 60 days had elapsed (on 16 December 2011), the Tribunal was functus officio with the result that he could no longer issue an additional award, nor extend the 60 day period pursuant to s 43(6) of the Act.

On 14 December 2012, the Tribunal wrote to the parties stating that: (a) the setting aside of the Additional Award did not revive his jurisdiction; and (b) in any case, the last day for him to make an additional award was 16 December 2011, 60 days after his receipt of the First Request (ie, 17 October 2011). The pertinent extracts of the Tribunal’s letter dated 14 December 2012 are as follows: 15. … I am of the view that upon setting aside of the Additional Award, and in the absence of the parties’ agreement or an express order from the Court to revive my jurisdiction, I am functus officio. 16. Even if I am wrong and my jurisdiction survives the setting aside, s 43(5) of [the Act] obliges me to make the additional award within 60 days of the receipt of such request. As the request for the Additional Award was received on 17 October 2011, unless extended pursuant to s 43(6), the last day to make the additional award was 16 December 2011. Upon the expiry of date for making the additional award, I am functus officio. The Tribunal also declined, on the same basis, LWI’s application for an extension of the time to issue an additional award: 17. Although s 43(6) permits an arbitrator to extend time within which to make the additional award, in my view this must be done before the expiry of the 60 day [sic] provided in s 43(5). Once the 60 day time limit has lapsed, the arbitrator is functus officio and would have no power to extend his own jurisdiction.

The present application

Disagreeing with the Tribunal’s view, LWI brought the present application in OS 29/2013. LWI’s original application proceeded on two bases: LWI applied for this court’s determination of three questions of law under s 45 of the Act, viz: whether, upon the setting aside of the Additional Award, the proceedings are returned to the state that existed up to the moment immediately preceding the making of the Additional Award, with the result that the Tribunal remains seized of the reference; whether, regardless of the on-going proceedings in OS 988/2011, the Tribunal’s jurisdiction to issue an additional award pursuant to the First Request had lapsed on 16 December 2011, 60 days after the Tribunal’s receipt of the First Request; and whether, regardless of the on-going proceedings in OS 988/2011, the Tribunal’s jurisdiction to extend time for the purposes of issuing an additional award...