Fairmount Development v. Soh Beng Tee: Arbitration Award Set Aside for Breach of Natural Justice
In Fairmount Development Pte Ltd v. Soh Beng Tee & Co Pte Ltd, the Singapore High Court heard an application by Fairmount Development Pte Ltd to set aside an arbitration award. The dispute arose from a building contract for the Fairmount Condominium project. Fairmount terminated Soh Beng Tee & Company Pte Ltd's employment as the contractor, leading to arbitration. The court, on 17 October 2006, allowed Fairmount's application, setting aside the award due to a breach of natural justice, specifically the failure to allow Fairmount an opportunity to be heard on the issue of time being at large.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application granted and the Award set aside.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court set aside an arbitration award in Fairmount Development Pte Ltd v. Soh Beng Tee & Co Pte Ltd due to a breach of natural justice.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Fairmount Development Pte Ltd | Applicant | Corporation | Application granted | Won | Philip Antony Jeyaretnam, Ling Tien Wah |
| Soh Beng Tee & Co Pte Ltd | Respondent | Corporation | Award set aside | Lost | Jimmy Yim, Abraham Vergis, Daniel Chia |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Philip Antony Jeyaretnam | Rodyk & Davidson |
| Ling Tien Wah | Rodyk & Davidson |
| Jimmy Yim | Drew & Napier LLC |
| Abraham Vergis | Drew & Napier LLC |
| Daniel Chia | Drew & Napier LLC |
4. Facts
- Fairmount hired SBT as the main contractor for a condominium project.
- Disputes arose, and Fairmount terminated SBT's employment.
- SBT invoked the arbitration clause.
- The arbitrator decided that time for performance was at large.
- Fairmount was not given an opportunity to argue against time being at large.
- The arbitrator's decision led to the conclusion that Fairmount's termination was wrongful.
5. Formal Citations
- Fairmount Development Pte Ltd v Soh Beng Tee & Co Pte Ltd, OS 757/2006, [2006] SGHC 189
6. Timeline
| Date | Event |
|---|---|
| Fairmount Development Pte Ltd incorporated. | |
| SBT offered to execute works for the project. | |
| Project awarded to SBT. | |
| Contract commencement date. | |
| Formal contract entered into. | |
| Extension of time of five days granted. | |
| Written notice issued to SBT for failing to proceed with diligence. | |
| Termination certificate issued. | |
| Fairmount terminated SBT’s employment. | |
| Replacement contractor completed the works. | |
| Fairmount demanded payment from SBT. | |
| Statutory demand issued. | |
| Arbitrator issued final award. | |
| Fairmount applied to set aside the Award. | |
| High Court set aside the Award. |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court found that a breach of natural justice had occurred, as Fairmount was not given an opportunity to be heard on the issue of time being at large.
- Category: Procedural
- Sub-Issues:
- Failure to provide opportunity to be heard
- Decision on matter not raised in pleadings
- Recourse against Arbitral Award
- Outcome: The court determined that the arbitrator exceeded the scope of submission by deciding on the issue of time being at large, but ultimately set aside the award based on breach of natural justice.
- Category: Procedural
- Sub-Issues:
- Setting aside of award
- Misconduct of arbitrator
- Extension of Time
- Outcome: The court found that the arbitrator failed to properly determine the extension of time, which was a pivotal issue in the case.
- Category: Substantive
- Sub-Issues:
- Failure to properly assess extension of time claims
- Impact of acts of prevention on completion date
8. Remedies Sought
- Setting aside of arbitral award
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Construction Disputes
- Commercial Litigation
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| John Holland Pty Ltd v Toyo Engineering Corp (Japan) | High Court | Yes | [2001] 2 SLR 262 | Singapore | Cited for the principles to establish a breach of the rules of natural justice. |
| Société Franco-Tunisienne D’Armement-Tunis v Government of Ceylon | English Court of Appeal | Yes | [1959] 1 WLR 787 | England and Wales | Cited to support the argument that each party should be given the opportunity to be heard on all relevant matters. |
| Faghirzadeh v Rudolf Wolff (SA) (Pty) Ltd | Not Available | Yes | [1977] 1 Lloyd’s Rep 630 | Not Available | Cited for the principle that an arbitral tribunal must give parties the opportunity to deal with arguments or matters not advanced by either party. |
| Gbangbola v Smith & Sherriff Ltd | Not Available | Yes | [1998] 3 All ER 730 | Not Available | Cited as a case that ruled that an arbitrator must give the parties the opportunity to deal with arguments or matters that have not been advanced by either party. |
| Fox v P G Wellfair Ltd | Not Available | Yes | [1981] 2 Lloyd’s Rep 514 | Not Available | Cited as a case that ruled that an arbitrator must give the parties the opportunity to deal with arguments or matters that have not been advanced by either party. |
| The Vimeira | Not Available | Yes | [1984] 2 Lloyd’s Rep 66 | Not Available | Cited for the law that the breach of natural justice itself creates a prejudice that is suffered by the party who has been deprived of its rights. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Arbitration Act (Cap 10, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration
- Arbitral Award
- Extension of Time
- Breach of Natural Justice
- Time at Large
- Termination of Employment
- SIA Contract
- Architect's Instructions
- Diligence
- Due Expedition
15.2 Keywords
- Arbitration
- Construction
- Breach of Natural Justice
- Singapore
- High Court
- Contract
- Award
- Fairmount
- Soh Beng Tee
16. Subjects
- Arbitration
- Construction Law
- Contract Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- Construction Law
- Civil Procedure
- Contract Law