Motor Image Enterprises Pte Ltd v SCDA Architects Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 03 November 2011
• Date: 03 November 2011
• Docket Number: Civil Appeal No 187 of 2010
• Court: Court of Appeal (Singapore)

Motor Image Enterprises Pte Ltd

Plaintiff

and

SCDA Architects Pte Ltd

Defendant

[2011] SGCA 58

Chan Sek Keong CJ

,

Andrew Phang Boon Leong JA

and

VK Rajah JA

Civil Appeal No 187 of 2010

Court of Appeal

Arbitration—Appeal under Arbitration Act—Further appeal to Court of Appeal—High Court judge granting leave to appeal question of law—High Court judge finding at appeal stage that question of law not appropriate because it was premised on facts that were not found by arbitrator and ignored his factual findings—Whether High Court judge abrogated vested right of appeal—Whether High Court judge hearing appeal entitled to review factual premise on which leave was granted—Section 49 (5) Arbitration Act (Cap 10, 2002 Rev Ed)

The appellant, Motor Image Pte Ltd (‘Motor Image’), engaged the respondent, SCDA Architects Pte Ltd (‘SCDA’), to provide architectural services (‘the Project’). The contract between Motor Image and SCDA was subject to the Singapore Institute of Architects Conditions of Appointment and Architects Services and Mode of Payment (‘the SIA Terms’). The Project was never completed because Motor Image abandoned it.

SCDA later commenced arbitration proceedings against Motor Image for the balance of the fees allegedly due to it. Motor Image also counterclaimed against SCDA.

In a detailed written award, the arbitrator, inter alia, allowed SCDA's claim for its fees for architectural services and dismissed Motor Image's counterclaim. Under the SIA Terms, the fees due to an architect were fixed as a percentage of the lowest bona fide tender received by the architect for the project. SCDA had called for two tenders after the Urban Redevelopment Authority (‘the URA’) approved a third set of drawings that SCDA had submitted to it. The arbitrator found that both tenders were bona fide because they were carried out with Motor Image's knowledge and consent. The arbitrator also agreed with SCDA that the higher of the two tenders ought to be used for calculating the fees due.

Motor Image sought leave from the High Court to appeal a question of law arising out of the Award. A High Court judge (‘the Judge’) granted leave to appeal a modified version of the question framed by Motor Image (‘the modified Contractual Interpretation Question’). The modified Contractual Interpretation Question asked whether an architect was entitled to fees based on the lowest of tenders received in a situation where an architect had agreed with his client to call for tenders based on an agreed set of drawings but instead called for and received tenders based on a different set of drawings.

The modified Contractual Interpretation Question was later placed before the Judge. At this stage, the Judge observed that the modified Contractual Interpretation Question was premised on the fact that SCDA used a different set of drawings for the first tender from those which the parties had agreed to use. The Judge then reviewed the Award in detail and found that this factual premise was not the same factual premise on which the arbitrator made his award. She accordingly found that the modified Contractual Interpretation Question was not appropriate because it was premised on facts that were not found by the arbitrator and ignored his factual findings. As a result, the Judge dismissed the appeal.

Motor Image then applied for leave under s 49 (11) of the Arbitration Act (Cap 10, 2002 Rev Ed) (‘AA’) to appeal to the Court of Appeal on two new questions of law, one of which was essentially a redraft of the modified Contractual Interpretation Question. The Judge granted leave to appeal only one of the questions, with a modification. The question was as follows (‘the Referred Question’):

Where, under section 49 (5) of the Arbitration Act (Cap.10), the High Court determines that a question of law arises out of an award and is a question which the arbitral tribunal was asked to determine ('Finding') and grants leave to appeal, does the High Court, on hearing the appeal against the award, have the power to review and overturn the Finding?

Held, dismissing the appeal:

(1) Ordinarily a right of appeal could not be revoked, even where the right had accrued by reason of leave having been given. However, the court's acceptance of this principle (which was referred to as ‘the Moore principle’ after the case of Moore, Nettlefold & Co v The Singer Manufacturing Company [1904] 1 KB 820) did not conclude this appeal in favour of Motor Image. Two further questions arose. The first was whether Motor Image's right of appeal was abrogated by the Judge revisiting the basis on which she had granted leave to appeal, and declining to decide the modified Contractual Interpretation Question that was before her. If Motor Image's right of appeal was not abrogated by the Judge's decision, then its whole argument of having acquired a vested and irrevocable right of appeal would not be relevant. Second, if she had, then it might be necessary to consider whether the Mooreprinciple, which was established for court actions, would be applicable to arbitrations where issues of jurisdictional facts were relevant as they were the basis on which leave might be granted to appeal against an arbitrator's award: at [31].

(2) If the modified Contractual Interpretation Question was not the question which the arbitrator was asked to determine, then it was a question on which no appeal could have been brought under s 49 (5) of the AA, and the Judge had no jurisdiction to grant leave to appeal on such a question on the basis that it was an appealable question. The Judge had mistakenly conferred upon herself a jurisdiction on a question of law which did not arise from the award. It followed from this conclusion that the Judge, in refusing to determine the modified Contractual Interpretation Question, did not abrogate any right of appeal vested in Motor Image because no such right could have been properly vested in it by reason of the Judge's earlier jurisdictional error: at [37].

(3) The Referred Question was accordingly answered in the affirmative to the extent that the High Court might, on hearing an appeal on a question of law with respect to which it had granted leave to appeal, review the factual premise on which such leave was granted, and to dismiss the appeal if it found that the leave was granted as a result of a jurisdictional error, as in that case, there was no proper or valid appeal before the court. If the Referred Question was answered in the negative, it would be a travesty of the judicial process and lead to an absurd result. It would mean that where an arbitrator made an award in favour of a party, on the basis of facts 1, 2 and 3, the Judge was compelled to answer a question of law arising from such an award on the basis of facts 4, 5 and 6 which were never found by the arbitrator. The High Court had no jurisdiction under s 49 (5) of the AA to give leave to appeal against an arbitrator's award on the basis of facts which were not found by the arbitrator and which did not form the basis of his award. Otherwise, this would allow the High Court to arrogate to itself the jurisdiction to decide on the correctness or legality of an arbitrator's award on a factual premise different from that on which the award was made. The court was unable to accept that this is what is contemplated by s 49 (5) of the AA: at [38] and [39].

(4) In view of the court's conclusion, it was not necessary to decide whether the Moore principle was applicable to the Judge's decision to dismiss Motor Image's appeal: at [40].

Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 (refd)

John Robinson and Co Ltd v R [1921] 3 KB 183 (refd)

Moore, Nettlefold & Co v The Singer Manufacturing Co [1904] 1 KB 820 (refd)

Ng Huat Foundations Pte Ltd v Samwoh Resources Pte Ltd [2006] SGHC 43 (refd)

‘Ocean Crown’, The [2010] 1 Lloyd's Rep 468 (refd)

Wan Sagar bin Wan Embong v Harun bin Taib [2008] 4 MLJ 474 (refd)

Warley Pty Ltd v Adco Constructions Pty Ltd (No 359 of 1988) (refd)

Arbitration Act (Cap 10,2002 Rev Ed) s 49 (5) (consd) ;ss 49,49 (7) ,49 (11)

Supreme Court of Judicature (Procedure) Act 1894 (c 16) (UK)

Davinder Singh SC, Una Khng, Alexander Lee and Harsharan Kaur (Drew & Napier LLC) for the appellant

Thio Shen Yi SC and Melvin Chan (TSMP Law Corporation) for the respondent.

Judgment reserved.

VK Rajah JA

(delivering the judgment of the court):

Introduction

1 This appeal arises from a decision of a High Court judge (‘the Judge’) dismissing an appeal against a domestic arbitration award (seeMotor Image Enterprises Pte Ltd v SCDA Architects Pte Ltd [2011] 1 SLR 497 (‘the Judgment’)). In dismissing the appeal, the Judge held that it was not appropriate for her to make a ruling on a question of law for which she had earlier granted leave to appeal under s 49 (5) of the Arbitration Act (Cap 10, 2002 Rev Ed) (‘AA’). The Judge had also held that the question of law had not properly arisen as it had not been premised on the facts that the arbitrator had found.

2 This appeal presents an opportunity to this court to clarify the statutory regime for appealing against domestic arbitration awards under s 49 of the AA.

Background facts and procedural history

The dispute before the arbitrator

3 The appellant, Motor Image Enterprises Pte Ltd (‘Motor Image’), is in the business of distributing and selling motor vehicles and spare parts and providing workshop services for motor vehicles. The respondent, SCDA Architects Pte Ltd (‘SCDA’), supplies architectural services.

4 Motor Image engaged SCDA to provide architectural services for retrofitting and alterations works at Motor Image's premises at 25 Leng Kee Road (‘the Project’) (see the Judgment at [2]). The contract between SCDA and Motor Image (‘the Architectural Contract’) was subject to the Singapore Institute of Architects Conditions of Appointment and Architects Services...