L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal
Jurisdiction | Singapore |
Judge | Chan Sek Keong CJ |
Judgment Date | 18 October 2012 |
Neutral Citation | [2012] SGCA 57 |
Court | Court of Appeal (Singapore) |
Docket Number | Civil Appeals Nos 17 and 26 of 2012 |
Published date | 14 November 2012 |
Year | 2012 |
Hearing Date | 16 August 2012 |
Plaintiff Counsel | Mr Tan Liam Beng and Ms Eng Cia Ai (Drew & Napier LLC) |
Defendant Counsel | Mr Chia Swee Chye Kelvin (Samuel Seow Law Corporation) |
Subject Matter | Arbitration,Award |
Citation | [2012] SGCA 57 |
There are two appeals before us arising out of the judgment of the High Court Judge (“the Judge”) in
These appeals raise a number of important questions concerning the law of arbitration. Just what do the rules of natural justice require of an arbitrator? To what extent do these rules apply even to ancillary applications? And what is the threshold a party must cross if it is to obtain any relief even assuming it can show that an arbitrator has failed to observe the rules of natural justice? We are also presented with the occasion to consider the extent to which the Court retains any supervisory powers over arbitration beyond the expressly provided avenues for recourse that are spelt out in the relevant legislation.
FactsThe Plaintiff was the Defendant’s sub-contractor for a building project. The Plaintiff failed to complete certain works by the agreed completion date, and the Defendant subsequently terminated the sub-contract. This gave rise to a dispute between them.
That dispute was referred to arbitration before an arbitrator, one Mr Johnny Tan Cheng Hye (“the Arbitrator”), pursuant to a notice of arbitration served on 22 June 2004 by the Defendant on the Plaintiff. In the arbitral proceedings, the Defendant was the claimant while the Plaintiff was the respondent. It was not disputed that the Arbitration Act (Cap 10, 2002 Rev Ed) (“the Act”) governed the proceedings.
The Arbitrator rendered his final award (“the Final Award”) on 29 June 2010. The Plaintiff was awarded the sum of $341,391.10 with simple interest at the rate of 5.33% per annum from the date of the award.1 Both parties were dissatisfied with the Arbitrator’s decision and appealed against it on questions of law arising out of the Final Award. The High Court dismissed the Plaintiff’s appeal and substantially allowed the Defendant’s appeal and the Final Award was remitted to the Arbitrator for his reconsideration and final disposal (see
Following this, the Arbitrator rendered his Supplementary Award No 2 (Remitted Issues) on 21 September 2011 (“the Second Supplementary Award”), under which the Defendant was awarded the sum of $945,000 by way of liquidated damages.2 In satisfaction of this sum, the Plaintiff was ordered to pay the Defendant the sum of $603,608.90, after setting off the sum of $341,391.10 that had earlier been found to be due to the Plaintiff under the Final Award.3
The Arbitrator expressly dealt with interest in the Second Supplementary Award, and as he had done in the Final Award, he awarded the successful party (
FOR THE REASONS GIVEN ABOVE, Award I ORDER and AWARD that:
[emphasis in original]
On 17 October 2011, almost four weeks after the issuance of the Second Supplementary Award, the Defendant’s solicitors wrote a letter to the Arbitrator (copied to the Plaintiff’s solicitors) requesting an additional award for “pre-award interest”. The relevant portion of the letter is set out below:5
Unless otherwise agreed by parties, a party may, within 30 days of receipt of the award and upon notice to the other party, request the arbitral tribunal to make an additional award as to claims presented during the arbitration proceedings but omitted from the award.
[emphasis in original]
The Arbitrator responded three days later even though the Plaintiff’s solicitors had not responded to the request. In his reply dated 20 October 2011, the Arbitrator stated:6
The additional award (“the Additional Award”) was for a further sum of $274,114.61 payable to the Defendant as pre-award interest calculated on the sum of $603,608.90 from 13 January 2003 to the date of the Second Supplementary Award. The Arbitrator stated that 13 January 2003 was selected as the date from which pre-award interest would be payable because liquidated damages accrued then.7 At the time he issued the Additional Award, the Arbitrator had not heard submissions on issues such as (a) the principal amount that should carry interest, (b) the rate of interest, (c) the time from which interest should be awarded, or (d) why the situation in favour of the Defendant should differ from that which applied when he made his Final Award in favour of the Plaintiff and confined interest to post-award interest (see above at [5]).
The Plaintiff’s solicitors protested on the same day, taking issue with the Additional Award having been made prior to the Plaintiff having the opportunity to present its “position and/or arguments on the issue of pre-award interest”.8 In a letter to the Arbitrator, the Plaintiff’s solicitors stated:9
For the record, we had intended to write to you today to rebut the [Defendant’s] request or application on
inter alia the basis that the claim presently sought by the [Defendant] wasnot omitted as such by the Tribunal since the [Defendant] did obtain interest on its claim. We would also have pointed out that, in [the Second Supplementary Award], only post-award interest was added … the Tribunal isfunctus officio in regard to the award of interest for the reasons stated above. [emphasis in original]
The Arbitrator responded on 21 October 2011, stating:10
The Plaintiff’s solicitors replied to this letter and this elicited a final reply from the Arbitrator on 27 October 2011 which stated in material part:11
A brief observation may be made on the Arbitrator’s response. It appears on the one hand that the Arbitrator proceeded to make the Additional Award because he inferred from the Plaintiff’s three-day silence that there was no objection to this. The corollary to this is that if the Plaintiff had objected, the Arbitrator would have considered this with an open mind. But on the other hand, the Arbitrator appeared also to be saying that he had already formed the intention to award pre-award interest in the manner he eventually did in the Additional Award but had simply overlooked reflecting this in the Second Supplementary Award. While this might explain the seeming haste with which the Additional Award was issued, it raises other questions. If indeed the Arbitrator had already arrived at a decision and had simply forgotten to mention it in the earlier award, then it is unclear on what basis he had done so since he had not yet been...
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