Ting Kang Chung John v Teo Hee Lai Building Constructions Pte Ltd

JurisdictionSingapore
Judgment Date18 January 2010
Date18 January 2010
Docket NumberOriginating Summons No 1807 of 2006
CourtHigh Court (Singapore)
Ting Kang Chung John
Plaintiff
and
Teo Hee Lai Building Constructions Pte Ltd and others
Defendant

[2010] SGHC 20

Quentin Loh JC

Originating Summons No 1807 of 2006

High Court

Arbitration–Award–Arbitrator failing to make award within time limit specified–Whether court should extend time for arbitrator to make award

The second and third respondents were owners ( the owners ) of a property. They entered into a contract on the Singapore Institute of Architects Form ( SIA Form ) on 29 December 1999 with the first respondent ( the contractor ) to demolish a house on that property and reconstruct a larger one in its place. Disputes arose between them in relation to that contract and, accordingly, these disputes were referred to arbitration pursuant to the arbitration clause in the SIA Form. The appellant ( the Arbitrator ) was appointed by the SIA as the arbitrator on 12 December 2001. After numerous interlocutory applications and applications to the courts, and vacation of hearing dates, the matter was finally fixed for hearing in two tranches from 21 November 2003. On 21 November 2003, a Friday, the owners failed to turn up. The Arbitrator adjourned the hearing to Monday 24 November 2003. The owners again failed to turn up and the Arbitrator proceeded with a default hearing. The contractor presented its case and witnesses and the proceedings were completed the same day. On 1 December 2003, the Arbitrator wrote to the parties asking for final submissions. The contractor sent in his written submissions on 12 December 2003 but the owners did not, claiming that the arbitration should not have proceeded in their absence. On 7 April 2004, the solicitor for the third respondent wrote to the Arbitrator stating that time for the Arbitrator to make his award had expired under Art 14.1 of the SIA Arbitration Rules. Article 14.1 provided that unless the parties agreed otherwise, an arbitrator shall make his award in writing within sixty days from the date on which the hearing was closed. The Arbitrator did not communicate with the parties until 15 April 2005 when the Arbitrator informed the parties that his award was ready for collection and that the outstanding arbitration fees of $199,178.40, (after setting off the deposits previously paid), should be paid. However, in addition to the owners' position that time for making the award had expired, both the owners and the contractor disagreed with the Arbitrator's fees. The Arbitrator asked the parties to agree to extend time on 19 June 2006 but the owners refused. By Originating Summons No 1807 of 2006, filed on 19 September 2006, the Arbitrator applied for an extension of time to 15 April 2005 to publish his award and for his outstanding balance of arbitrator's fees to be paid. In response, the owners filed Originating Summons No 1231 of 2008, applying, inter alia, for the award to be set aside.

Held, dismissing OS 1807/2006 and allowing OS 1231/2008 in part:

(1) The Arbitrator's error in overlooking a time limit within which to issue his award was a very serious error. Party autonomy, which was a cornerstone of arbitration, had been emphasised time and again by our highest court. If the parties had chosen to agree to a time limit within which an arbitrator had to render his award and that contract or arbitration clause contained no provision to extend time, other than by mutual agreement, then no court was in a position to re-write the contract for the parties (unless there was a statutory provision conferring such a power): at [32].

(2) It was clear that s 15 of the Arbitration Act (Cap 10, 1985 Rev Ed) ( the AA ) should be exercised by a court to prevent a substantial injustice, provided there was no prejudice to the other party. The court should be slow to exercise its discretion if by doing so it overrode party autonomy which was paramount. First, if an arbitration clause was clearly worded that the arbitrator had toissue his award within a specified time, a court should not interfere unless there were exceptional circumstances. Secondly, unless there were very good reasons, a court should not entertain any application under s 15 if the time limit had expired, afortiori, if the time limit had expired by a large margin. The longer the delay in making the application the less likely a court would exercise its discretion to extend time. What was a large margin hadto necessarily depend on the facts of each case. There should be no hard and fast rule. It would not only be a prudent measure but a preferable pre-requisite that any application for extension of time should be made before expiry of the time limit agreed to by the parties for rendering the award. Any application to extend time after the time limit had expired would need very good reasons and extenuating circumstances for the court to exercise its discretion to extend time, eg, the court remitted an award or part of an award back to the arbitrator to reconsider. Thirdly, the discretion was exercised if in all the circumstances of the case it would cause a substantial injustice if time were not extended. The prejudice to the other party should also be put into the scales when deciding if substantial injustice would result: at [41].

(3) There were no hard and fast rules as to what would constitute good reasons for an extension of time to make an arbitration award: at [42].

(4) In the present case, the Arbitrator had failed to satisfy the criteria stated in (2) by being out of time by a considerate period both in the making of his award and in bringing his application to extend time and also because the Singapore Institute of Arbitrator Rules imposed a clear and strict time limit. Nonetheless, the failure by an applicant to satisfy or fully satisfy the above criteria did not, ipso facto, deprive him from obtaining an extension of time under s 15 of the AA: at [44].

(5) None of the factors the Arbitrator put forward to justify the lateness of the award constituted reasons, let alone good reasons, to extend time to make his award out of time: at [45] to [53].

(6) The Arbitrator's application was also not supported by the interests of justice as the actual work done by the Arbitrator could not be considered to serve either party's quest for justice. The process adopted by the Arbitrator was flawed and his strange award and the manner of its publication did not engender any confidence in the dispute resolution process. Moreover, both parties considered his fee for this process to be, to put it mildly, excessive. Although this might be cured by taxation under s 36 of the AA, it did not arise in this case. Whilst it might be a hardship for the Contractor to have his monetary award a nullity, this was not a substantial injustice because the parties had chosen arbitration for their dispute resolution and errors of the arbitrator were part and parcel of this choice: at [54].

[Observation: The Singapore Institute of Architects ( SIA ) should bear in mind that appointing an arbitrator for parties who could not agree on one was a service to the construction industry and indeed to members of the public who entered into contracts on the SIA Form to carry out alternations and additions or construct their homes. Given the widespread use of its form, it was incumbent on them to ensure that only competent arbitrators were appointed for the parties who had disputes and differences. There should also be transparency as to the arbitrators who were on their list. There should be no issues in making such a list public on their website as other institutions like the SIAC and SIArb. It should be a badge of honour to the Institute and those on the list in providing the construction industry and the public a laudable service. The SIA should also bear in mind Singapore's push to be a centre of excellence for arbitration and to build up Singapore as an arbitration hub. Putting forth arbitrators without the requisite competence and ability would only impede this initiative and bring disrepute upon the arbitration community in Singapore: at [61] and [62].]

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

Anwar Siraj v Ting Kang Chung [2003] 2 SLR (R) 287; [2003] 2 SLR 287 (refd)

Fox v PG Wellfair Ltd [1981] 2 Lloyd's Rep 514 (refd)

Hong Huat Development Co (Pte) Ltd v Hiap Hong & Co Pte Ltd [2000] 1 SLR (R) 510; [2000] 2 SLR 609 (refd)

Ian MacDonald Library Services Ltd v PZ Resort Systems Inc (1987) 14 BCLR (2d) 273 (refd)

Leslie v Richardson (1848) 6 CB 378; 136 ER 1297 (refd)

Minermet SpA Milan v Luckyfield Shipping Corp SA [2004] Lloyd's Rep 348 (refd)

Oakland Metal Co Ld v D Benaim & Co Ld [1953] 2 QB 261 (refd)

Parkes v Smith (1850) 15 QB 297; 117 ER 470 (refd)

Petro-Canada v Alberta Gas Ethylene Co (1991) 121 AR 199 (refd)

Pioneer Shipping Ltd v BTP Tioxide Ltd (The Nema) [1982] AC 724 (refd)

Pirtek (UK) Ltd v Deanswood Ltd [2005] EWHC 2301 (refd)

Techno Ltd v Allied Dunbar Assurance plc [1993] 22 EG 109 (refd)

VV v VW [2008] 2 SLR (R) 929; [2008] 2 SLR 929 (refd)

Arbitration Act (Cap 10,1985 Rev Ed) s 15

Arbitration Act 2001 (Act 37 of 2001) ss 36, 36 (1) ,36 (2) , 36 (3) ,36 (4) , 65

Building and Construction Industry Security of Payment Act (Cap 30B, 2006 Rev Ed)

Environmental Public Health Act (Cap 95, 2002 Rev Ed)

Limitation Act (Cap 163,1996 Rev Ed) s 30

Penal Code (Cap 224,1985 Rev Ed)

Rules of Court (Cap 322,R 5, 2006 Rev Ed)

Arbitration Act 1950 (c 27) (UK) ss 13 (2) ,31 (2)

Arbitration Act 1996 (c 23) (UK) s 50

Ng Yuen (Malkin & Maxwell LLP) for the plaintiff

Thulasidas s/o Rengasamy Suppramaniam (Ling Das & Partners) for the first defendant

Second and third defendants in person.

Judgment reserved.

Quentin Loh JC

1 This unfortunate saga started off as a not uncommon building and construction dispute between the owners of a property and a contractor. Unusually, it soon became a full blown mêlée which also embroiled...

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