Mitsui Engineering & Shipbuilding Co Ltd v Easton Graham Rush and Another

• Jurisdiction: Singapore
• Judge: Woo Bih Li J
• Judgment Date: 16 February 2004
• Neutral Citation: [2004] SGHC 26
• Docket Number: Originating Summons No 108 of 2004
• Date: 16 February 2004
• Year: 2004
• Published date: 22 March 2004
• Plaintiff Counsel: Wong Meng Meng SC, Andre Maniam and Melvin See (Wong Partnership)
• Citation: [2004] SGHC 26
• Defendant Counsel: Quentin Loh SC and Sim Kwan Kiat (Rajah and Tann)
• Court: High Court (Singapore)
• Subject Matter: Interlocutory order or direction,Arbitration,Articles 5, 13, 34 UNCITRAL Model Law on International Commercial Arbitration, s 24 International Arbitration Act (Cap 143A, 2002 Rev Ed),Court’s power,Whether court had power to grant injunction restraining arbitrator from taking further step in arbitration pending application to remove arbitrator and set aside award

16 February 2004

Woo Bih Li J:

Introduction

1 This originating summons was filed by the plaintiff, Mitsui Engineering & Shipbuilding Co Ltd (“Mitsui”), for an injunction to restrain the first defendant, Mr Graham Rush Easton, from “continuing or assisting in the prosecution or further prosecuting or taking any further step” in the arbitration between Mitsui and the second defendant, Keppel Engineering Pte Ltd (“Keppel”), and to restrain Keppel likewise, until Mitsui’s challenge of Mr Easton as arbitrator and its application to set aside the first interim award (“FIA”) from Mr Easton are determined. Mitsui also filed an ex parte summons-in-chambers application (“the Application”) for an interim injunction seeking similar relief pending the hearing of the originating summons.

2 Although the Application was filed on an ex parte basis, counsel for Keppel also appeared before me, presumably after notice of the same had been given by Mitsui’s solicitors. In the light of the nature of the application before me, I allowed counsel for Keppel to present arguments as well. As various Counsel presented arguments, I will refer to such arguments as Mitsui’s and Keppel’s arguments respectively.

Background

3 Mitsui and Keppel were joint venture partners in a consortium which was awarded certain contracts by the Port of Singapore Authority. Disputes arose among various parties and the disputes between Mitsui and Keppel were referred to arbitration pursuant to an arbitration provision in the agreements between them. Mr Easton was appointed by Mitsui and Keppel as the arbitrator.

4 It was agreed that Mr Easton was to decide on various preliminary issues which were in the form of 11 questions. After hearing evidence and receiving submissions, Mr Easton issued the FIA in relation to these questions on 26 December 2003.

5 Mitsui was dissatisfied with the FIA. For present purposes, it is sufficient for me to say that it was dissatisfied because the FIA had allegedly dealt with matters outside the scope of what had been submitted for decision and Mr Easton had pre-judged some of the issues which were to be dealt with at subsequent hearings.[1]

6 Keppel then made five applications on 5 January 2004 as a result of the FIA. Mitsui contended that at least one of these applications would not have been made if Mr Easton had not exceeded his mandate. Mitsui then informed Mr Easton of its concerns and challenged his position as arbitrator on 9 January 2004 and invited him to withdraw accordingly.

7 In a letter dated 12 January 2004, Mr Easton gave his views on the FIA in response to the letter dated 9 January 2004 challenging his position as arbitrator. Mitsui says this letter is revealing but it is not necessary for me to set it out.

8 Subsequent to that letter but also on 12 January 2004, counsel for Mitsui said at a telephone conference that the next hearing, which was fixed for three weeks from 26 January 2004, should be vacated in view of the challenge on Mr Easton. Counsel for Keppel agreed to only the first week’s hearing being vacated to accommodate Mitsui, and Mr Easton asked the parties to make their contentions whether the entire three weeks should be vacated.

9 On 13 January 2004, Mr Easton vacated the first week’s hearing since counsel for Keppel was agreeable to this.

10 On 15 January 2004, Mr Easton gave some directions on the conduct of the hearing for the remaining weeks.

11 Mitsui took the position that pending an intended application to remove Mr Easton and to set aside the FIA, there should be no further hearing before Mr Easton, otherwise Mitsui “will be irrevocably prejudiced to an extent that damages cannot compensate” and, on the other hand, Keppel would suffer little prejudice in respect of the vacating of the remaining two weeks of this hearing tranche.[2]

12 Mitsui also made a further attempt to have the remaining two weeks’ hearing vacated but as its attempt was unsuccessful, the originating summons and the Application were filed on 28 January 2004. As the hearing before Mr Easton was to continue from Tuesday, 3 February 2004, 2 February 2004 being a public holiday, the Application was heard on an urgent basis.

13 Eventually, the primary issue before me was whether the High Court of Singapore has the jurisdiction to grant the injunction in the terms sought under the originating summons (“the Interlocutory Injunction”). If not, then I should not, and indeed could not, grant an interim injunction pending the hearing of the originating summons. I also add that in the course of arguments, the court’s jurisdiction and the court’s power to grant the Interlocutory Injunction were used interchangeably. After hearing arguments, I was of the view that the court had no jurisdiction, or power, to grant the Interlocutory Injunction and I dismissed the Application with costs. After hearing further arguments on an application subsequently made by Mitsui, I maintained my decision.

The arguments and my reasons

14 Section 4(10) of the Civil Law Act (Cap 43, 1999 Rev Ed) states that an injunction may be granted either unconditionally or upon such terms and conditions as the court thinks just, in all cases in which it appears to the court to be just or convenient to do so. However, it was not in dispute that the arbitration between the parties is an international arbitration and is governed by the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”) which incorporates the UNCITRAL Model Law on International Commercial Arbitration (“the Model Law”). It was also not in dispute that the scheme and intention behind such arbitrations is minimal court involvement, but, that is not to say that court involvement is excluded entirely.

15 Accordingly, cases before the advent of the Model Law and the IAA and cases which do not involve international arbitrations provided me with limited assistance, if any, in deciding the primary issue.

16 As I have said, under Singapore law, the Model Law applies to an international arbitration. This is by virtue of s 3 IAA. The English text of the Model Law is set out in the First Schedule of the IAA. Both sides referred to Art 5 of the Model Law. It states:

Article 5. Extent of court intervention

In matters governed by this Law, no court shall intervene except where so provided in this Law.

17 Mitsui argued that it was not relying on a general supervisory power of the court but a residual power of the court when an arbitrator is being challenged and when an application is being made to set aside an award. It referred to Arts 13 and 34 of the Model Law as well as s 24 IAA. As Art 13 provides the challenge procedure and Art 12(2) provides the grounds for challenge, I set out below the terms of Arts 12(2) and 13:

Article 12. Grounds for challenge

(1) …

(2) An arbitrator may be challenged only if circumstances exist that give rise to justifiable doubts as to his impartiality or independence, or if he does not possess qualifications agreed to by the parties. A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.

Article 13. Challenge procedure

(1) The parties are free to agree on a procedure for challenging an arbitrator, subject to the provisions of paragraph (3) of this Article.

(2) Failing such agreement, a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstance referred to in Article 12(2), send a written statement of the reasons for the challenge to the arbitral tribunal. Unless the challenged arbitrator withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.

(3) If a challenge under any procedure agreed upon by the parties or under the procedure of paragraph (2) of this Article is not successful, the challenging party may request, within thirty days after having received notice of the decision rejecting the challenge, the court or other authority specified in Article 6 to decide on the challenge, which decision shall be subject to no appeal; while such a request is pending, the arbitral tribunal, including the challenged arbitrator, may continue the arbitral proceedings, and make an award.

18 I also set out below the terms of Arts 34(1), (2)(a) and (4):

Article 34. Application for setting aside as exclusive recourse against arbitral award

(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this Article.

(2) An arbitral award may be set aside by the court specified in Article 6 only if:

(a) the party making the application furnishes proof that:

(i) a party to the arbitration agreement referred to in Article 7 was under some incapacity; or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of this State; or

(ii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or

(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Law from which the parties cannot derogate, or, failing such agreement, was not in accordance...