Koh Bros v Scotts Development: Arbitrator Misconduct & Removal in Construction Dispute

In Koh Bros Building & Civil Engineering Contractor Pte Ltd v Scotts Development (Saraca) Pte Ltd, the High Court of Singapore addressed an originating motion by Koh Bros to remove an arbitrator, Mr. John Chung, in an arbitration against Scotts Development. The dispute arose from a construction project where Koh Bros disputed deductions made by Scotts Development for liquidated damages. Koh Bros alleged the arbitrator misconducted the proceedings by deciding on the merits of their application for an interim award without allowing them a proper hearing. Judith Prakash J found a breach of natural justice and ordered the arbitrator's removal, citing concerns about his ability to fairly determine the remaining issues.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Order in terms of the motion granted; arbitrator removed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Koh Bros sought removal of an arbitrator for misconduct in a construction dispute. The court found a breach of natural justice and ordered removal.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Koh Bros Building and Civil Engineering Contractor Pte LtdApplicantCorporationMotion GrantedWon
Scotts Development (Saraca) Pte LtdRespondentCorporationMotion to Dismiss Application DeniedLost

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
VK Rajah SCRajah & Tann
Simon CheongRajah & Tann
Andre ManiamWong Partnership
Elly ThamWong Partnership
Wong Meng Meng SCWong Partnership

4. Facts

  1. Koh Bros was engaged by Scotts Development to construct a housing project.
  2. The contract price was $17,861,724.20, and the original completion date was 18 October 1996.
  3. The works were not completed on time, leading to the issuance of Delay Certificates.
  4. The architect granted extensions of time, reducing the contractors’ liability for liquidated damages.
  5. Scotts Development withheld $1,729,561.80 on account of liquidated damages.
  6. Koh Bros disputed the deduction and commenced High Court Suit No. 284 of 1999.
  7. The contractors applied for an interim award in the sum of $1,729,561.80.

5. Formal Citations

  1. Koh Bros Building and Civil Engineering Contractor Pte Ltd v Scotts Development (Saraca) Pte Ltd, OM 600013/2002, [2002] SGHC 223

6. Timeline

DateEvent
Developers engaged the contractors to construct a housing project.
Original completion date of the works.
Architect issued the Original Delay Certificate.
Liquidated damages accrued up to this date.
Contractors commenced High Court Suit No. 284 of 1999.
Contractors gave notice of arbitration.
Mr John Chung was appointed as arbitrator.
Arbitrator gave directions for the filing of pleadings.
Developers’ points of defence and counterclaim were filed.
Contractors made an application to the arbitrator requesting that certain issues be tried as preliminary issues.
Hearing took place for the arbitrator to determine whether he should hear the preliminary issues.
Arbitrator informed parties that he had decided not to hear the preliminary issues.
Contractors applied for an interim award.
Arbitrator stated he would hear the employers’ objections to the contractors’ application first.
Hearing took place regarding the employers’ preliminary objections.
Counsel for the contractors sent the arbitrator a letter summarizing key points.
Arbitrator notified the parties that he did not consider it appropriate to hear the application for an interim award.
Arbitrator advised parties that he had reconsidered the matter and decided that his ruling of 8 January would stand.
Contractors’ solicitors wrote to the arbitrator asking for a scheduled hearing for the giving of directions to be postponed.
Arbitrator informed the contractors’ solicitors that his notes were for his own reference and he had no intention of disclosing them.
Contractors informed the arbitrator that they viewed his decision of 8 January 2002 and subsequent events as a serious breach of natural justice.
Arbitrator responded by advising both parties to continue with the reference.
Contractors received an opinion from a Queen’s Counsel stating that the arbitrator’s conduct had constituted misconduct.
Contractors informed the arbitrator that they intended to make an application to court to remove him under s17 of the Act.
Decision Date

7. Legal Issues

  1. Misconduct of Arbitrator
    • Outcome: The court found that the arbitrator had misconducted the arbitration by coming to a decision on a point without giving the contractors the opportunity of putting forward submissions and evidence on that point.
    • Category: Substantive
    • Sub-Issues:
      • Breach of natural justice
      • Failure to provide opportunity to be heard
      • Prejudging the matter
  2. Removal of Arbitrator
    • Outcome: The court ordered the removal of the arbitrator, concluding that there was a real likelihood of him not being able to fairly determine the issues in the arbitration.
    • Category: Procedural

8. Remedies Sought

  1. Removal of Arbitrator
  2. Interim Award

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Construction Law
  • Commercial Litigation

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
The ElissarN/AYes[1984] 2 LLR 84N/ACited for the objective test to determine if an arbitrator should be removed, focusing on whether a reasonable person would think there was a real likelihood that the arbitrator could not fairly determine the relevant issue.
Tropicon Contractors Pte Ltd v Lojan Properties Pte LtdN/AYes[1989] SLR 610SingaporeCited to show that the arbitrator had a duty to scrutinise any attempt to deny payment due to the contractors under a valid payment certificate.
Lian Soon Construction Pte Ltd v Guan Qian Realty Pte LtdN/AYes[1992] 2 SLR 233SingaporeCited to show that the arbitrator had a duty to scrutinise any attempt to deny payment due to the contractors under a valid payment certificate.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Arbitration Act (Cap 10) s 17(1)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Misconduct
  • Natural Justice
  • Interim Award
  • Delay Certificate
  • Liquidated Damages
  • Preliminary Objections
  • Summary Disposal

15.2 Keywords

  • arbitration
  • misconduct
  • removal
  • construction
  • singapore
  • natural justice
  • interim award

17. Areas of Law

Area NameRelevance Score
Arbitration90
Misconduct of arbitrator75
Removal of arbitrator65
Natural justice60
Construction Law40
Breach of Contract30

16. Subjects

  • Arbitration
  • Construction Dispute
  • Arbitrator Misconduct