LW Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 29 November 2013
• Date: 29 November 2013
• Docket Number: Originating Summons No 29 of 2013
• Court: High Court (Singapore)

L W Infrastructure Pte Ltd

Plaintiff

and

Lim Chin San Contractors Pte Ltd

Defendant

[2013] SGHC 264

Belinda Ang Saw Ean J

Originating Summons No 29 of 2013

High Court

Arbitration—Award—Application under s 21 (9) Arbitration Act (Cap 10, 2002 Rev Ed) for court to decide on plea as preliminary issue that tribunal had jurisdiction—Section 21 (9) Arbitration Act (Cap 10, 2002 Rev Ed)

Arbitration—Award—Application under s 36 Arbitration Act (Cap 10, 2002 Rev Ed) for extension of time to issue additional award—Section 36 Arbitration Act (Cap 10, 2002 Rev Ed)

Arbitration—Award—Determination of questions of law under s 45 Arbitration Act (Cap 10, 2002 Rev Ed) —Whether tribunal functus officio after setting aside of additional award for breach of rules of natural justice—Section 45 Arbitration Act (Cap 10, 2002 Rev Ed)

The present application 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.

In bringing the present application for, inter alia, the determination of three questions of law under s 45 of the Act, the plaintiff, L W Infrastructure Pte Ltd (‘LWI’), essentially sought a declaration that the Tribunal retained 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. The defendant, Lim Chin San Contractors Pte Ltd (‘LCSC’), opposed the application on substantially the same grounds.

Held, dismissing the application:

(1) LWI was not entitled to apply under s 45 of the Act for the court to determine questions of law as the said questions of law could not have been said to have arisen ‘in the course of the [arbitral] proceedings’. The Tribunal's jurisdiction to deal with LWI's claim for pre-award interest had expired when he issued the Additional Award and this jurisdiction was not subsequently ‘revived’ when the Additional Award was set aside on the ground of a breach of the rules of natural justice. The questions of law framed by LWI were therefore extraneous to the arbitral proceedings: at [19] and [69] .

(2) An arbitral tribunal would generally be functus officio in respect of the issues covered in an arbitral award, subject only to the operation of the ‘exceptions’ embodied in ss 43 (4), 43 (5) and 43 (6) (which retain jurisdiction for the tribunal to issue an additional award as to claims presented during the arbitral proceedings and purported to be covered by the award but omitted from the actual award) and the extent to which the tribunal's jurisdiction is revived by court order. It was this last-mentioned ‘exception’ which formed the crux of the present dispute: at [33] , [34] and [35] .

(3) It was noteworthy that in the somewhat analogous situation where an award was remitted for an arbitral tribunal to correct a mistake or address an issue, such an order would generally only revive the tribunal's jurisdiction so far as necessary for it to make that correction or address that issue. There would be no general entitlement on the part of the tribunal to revisit the issues and decisions carte blanche. It would therefore appear incongruous if the setting aside of an award automatically revived, without more, the tribunal's jurisdiction to reopen and decide all issues dealt with in the award: at [42] .

(4) The effect of an order setting aside an arbitral award would depend on the dichotomy between awards made within power and those made beyond power, as well as the extent to which the arbitral tribunal was conferred jurisdiction over the dispute by an underlying agreement to arbitrate: at [43] .

(5) Where an arbitral award was made ‘within power’ but was subsequently set aside because of a procedural irregularity (for instance, where the award had been made in breach of the rules of natural justice (such as in the present case) or where the award was contrary to public policy) (‘Situation 1’), the arbitral tribunal would not subsequently have jurisdiction to revisit the issues covered in the award. At that point, it would be up to the party who had opposed the setting aside application to recommence arbitral proceedings before a newly constituted tribunal, assuming that the underlying arbitration was still valid and subsisting and there was no operative time bar: at [46] and [47] .

(6) Similarly, where an arbitral award was ‘beyond power’ in the sense that the tribunal lacked jurisdiction to deal with the dispute altogether (for instance, where there was no valid agreement to arbitrate, where a party to the arbitration agreement was under some incapacity or where the arbitral tribunal had not been properly appointed) (‘Situation 2’), that would clearly be the end of the enquiry and the tribunal would obviously not be vested with jurisdiction to deal with the matter merely because the award had been set aside by the court: at [48] .

(7) Where, however, an arbitral award was ‘beyond power’ or ultra vires in the sense that the tribunal did not have the power to issue the award in the form that it did, but nevertheless had jurisdiction under the arbitration agreement to decide the underlying issues vis-à-vis the parties (‘Situation 3’), those issues would remain open for the determination of the tribunal in a subsequent award, having never been validly determined in the first place. In such a situation, the tribunal had to exercise or complete its mandate to decide all outstanding issues between the parties to the arbitration. Such cases could be expected to be rare and represent the exception rather than the norm: at [49] .

(8) Given that the Tribunal's jurisdiction to deal with the issue of pre-award interest had in fact expired upon its issuance of the Additional Award, LWI's application to extend time for the Tribunal's issuance of an additional award under s 36 of the Act had been rendered nugatory: at [75] .

(9) LWI was moreover not entitled to apply to the court under s 21 (9) of the Act to decide the issue of the Tribunal's jurisdiction as the Tribunal's letter stating that it lacked jurisdiction was issued after the termination of the arbitral proceedings, and was thus neither a ruling ‘on a plea as a preliminary question that it has jurisdiction’ nor a ruling on ‘a plea at any stage of the arbitral proceedings that it has no jurisdiction’. In any case, an application under s 21 (9) would have been futile as the Tribunal's jurisdiction to deal with the issue of pre-award interest had in fact expired permanently on the issuance of the Additional Award: at [78] and [79] .

ABB Service Pty Ltd v Pyrmont Light Rail Co Ltd [2010] NSWSC 831 (refd)

Aiden Shipping Co Ltd v Interbulk Ltd (The Vimeira) (No 2) [1985] 2 Lloyd's Rep 377 (refd)

Alvaro v Temple [2009] WASC 205 (refd)

Anwar Siraj v Teo Hee Lai Building Construction Pte Ltd [2007] 2 SLR (R) 500; [2007] 2 SLR 500 (refd)

Dawes v Treasure & Son Ltd [2011] 2 All ER (Comm) 569 (refd)

Five Oceans Salvage Ltd v Wenzhou Timber Group Co [2012] 1 Lloyd's Rep 289 (refd)

Glass, Molders, Pottery, Plastics & Allied Workers International Union, AFL-CIO, CLC, Local 182 B v Excelsior Foundry Co 56 F 3 d 844 (7th Cir, 1995) (refd)

Hussmann (Europe) Ltd v Al Ameen Development & Trade Co [2000] 2 Lloyd's Rep 83 (refd)

Hussmann (Europe) Ltd v Pharaon [2003] EWCA Civ 266 (not folld)

Interbulk Ltd v Aiden Shipping Co Ltd (The Vimeira) [1984] 2 Lloyd's Rep 66 (refd)

Interbulk Ltd v Aiden Shipping Co Ltd (The Vimeira) (No 1) [1985] 2 Lloyd's Rep 410 (refd)

Interbulk Ltd v Aiden Shipping Co Ltd (The Vimeira) (No 3) [1986] 2 Lloyd's Rep 75 (refd)

Internaut Shipping Gmb H v Fercometal SARL [2003] EWCA Civ 812 (refd)

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

Mark Blake Builders Pty Ltd v Davis (NSW 9403294) (refd)

PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA [2007] 1 SLR (R) 597; [2007] 1 SLR 597 (refd)

Scibilia & Lejo Holdings Pty Ltd Arbitration, Re [1985] 1 Qd R 94 (refd)

Tang Boon Jek Jeffrey v Tan Poh Leng Stanley [2001] 2 SLR (R) 273; [2001] 3 SLR 237 (refd)

Arbitration Act (Cap 10, 2002 Rev Ed) s 45 (consd) ;ss 2 (1) , 21 (9) , 33, 36, 43 (4) , 43 (5) , 43 (6) , 44, 44 (1) , 48, 48 (3) , 49, 49 (8) , 49 (8) (c)

Arbitration Act (Cap 10, 1985 Rev Ed) ss 28, 29

International Arbitration Act (Cap 143 A, 2002 Rev Ed) s 19 B (1)

Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 69 r 4

Arbitration Act 1996 (c 23) (UK) ss 67, 68, 68 (3) , 69, 69 (7)

Tan Liam Beng, Soh Chun York and Eng Cia Ai (Drew & Napier LLC) for theplaintiff

Chia Swee Chye (Samuel Seow Law Corporation) for the defendant.

Judgment reserved.

Belinda Ang Saw Ean J

Introduction

1 This is the latest instalment in a long-running dispute between a main contractor and its subcontractor 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.

2 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...