CRW v PT Perusahaan Gas Negara: Enforcing DAB Decisions in Construction Arbitration

In CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK, the Singapore Court of Appeal addressed the enforceability of a Dispute Adjudication Board (DAB) decision under the 1999 FIDIC Red Book. CRW, a joint operation, appealed against the High Court's decision to set aside a final arbitral award in favor of CRW. The court dismissed the appeal, holding that the arbitral tribunal exceeded its jurisdiction by issuing a final award enforcing the DAB's decision without reviewing the merits of the underlying dispute, thereby depriving PT Perusahaan Gas Negara (PGN) of its right to a full hearing.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal dismissed with costs. The court upheld the decision to set aside the Final Award.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal clarifies the enforceability of Dispute Adjudication Board (DAB) decisions in construction contracts and arbitration.

1.7 Decision Date

12 July 2011

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
PT Perusahaan Gas Negara (Persero) TBK	Respondent	Corporation	Application to set aside Final Award Allowed	Won	Philip Jeyaretnam of Rodyk & Davidson LLP Wong Wai Han of Rodyk & Davidson LLP
CRW Joint Operation	Appellant	Other	Appeal Dismissed	Lost	Siraj Omar of Premier Law LLC Dipti Jauhar of Premier Law LLC

3. Judges

Judge Name	Title	Delivered Judgment
Chao Hick Tin	Justice of the Court of Appeal	Yes
Andrew Phang Boon Leong	Justice of the Court of Appeal	Yes
V K Rajah	Justice of the Court of Appeal	Yes

4. Counsels

Counsel Name	Organization
Philip Jeyaretnam	Rodyk & Davidson LLP
Wong Wai Han	Rodyk & Davidson LLP
Siraj Omar	Premier Law LLC
Dipti Jauhar	Premier Law LLC

4. Facts

CRW and PGN entered into a Pipeline Construction Contract in 2006.
A dispute arose regarding 13 variation order proposals submitted by CRW.
The dispute was referred to a DAB, which awarded US$17,298,834.57 to CRW.
PGN filed a notice of dissatisfaction with the DAB's decision.
CRW commenced arbitration to enforce the DAB's decision.
The arbitral tribunal issued a final award in favor of CRW without reviewing the merits of the DAB decision.
PGN applied to set aside the final award.

5. Formal Citations

CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK, Civil Appeal No 59 of 2010, [2011] SGCA 33

6. Timeline

Date	Event
2006-02-28	Pipeline Construction Contract signed
2008-02-22	Dispute adjudication agreement signed
2008-11-25	Adjudicator awarded US$17,298,834.57 to CRW
2008-11-28	PGN filed a notice of dissatisfaction
2008-12-03	CRW issued an invoice to PGN for US$17,298,834.57
2009-02-13	CRW filed a request for arbitration with the ICC
2009-04-03	ICC confirmed appointments of Mr. Neil Kaplan and Prof. H Priyatna Abdurrasyid as co-arbitrators
2009-04-24	PGN filed an answer to CRW’s Request for Arbitration
2009-04-30	Mr. Alan J Thambiayah appointed as chairman of the Arbitral Tribunal
2009-06-01	Preliminary meeting held
2009-06-04	Arbitral Tribunal gave directions
2009-06-17	Parties signed the terms of reference for the Arbitration
2009-09-16	Hearing of the Preliminary Issues took place
2009-11-24	Majority Members issued the Final Award in favour of CRW
2009-11-26	Prof Abdurrasyid issued a dissenting opinion
2010-01-07	Enforcement Order was made
2011-07-13	Judgment reserved

7. Legal Issues

Excess of Jurisdiction by Arbitral Tribunal
- Outcome: The court held that the arbitral tribunal exceeded its jurisdiction by issuing a final award without reviewing the merits of the DAB decision.
- Category: Jurisdictional
- Sub-Issues:
  - Failure to review merits of DAB decision
  - Issuing final award without assessing underlying dispute
Breach of Natural Justice
- Outcome: The court found that the arbitral tribunal breached the rules of natural justice by not giving PGN a real opportunity to defend its position.
- Category: Procedural
- Sub-Issues:
  - Denial of opportunity to present case
  - Failure to provide a fair hearing
Enforceability of DAB Decisions
- Outcome: The court clarified that DAB decisions are binding but not final and are subject to review in subsequent arbitration proceedings.
- Category: Substantive
- Sub-Issues:
  - Interim binding effect of DAB decisions
  - Requirement for rehearing in arbitration

8. Remedies Sought

Enforcement of Arbitral Award
Setting Aside of Arbitral Award

9. Cause of Actions

Breach of Contract

10. Practice Areas

Arbitration
Commercial Litigation
Construction Law

11. Industries

Construction
Energy

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation	High Court	Yes	[2010] 4 SLR 672	Singapore	Cited as the decision from which the appeal arose, concerning the setting aside of a final award.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd	Court of Appeal	Yes	[2007] 3 SLR(R) 86	Singapore	Cited for the principle of minimal curial intervention in the arbitral process.
PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA	Court of Appeal	Yes	[2007] 1 SLR(R) 597	Singapore	Cited for the two-stage enquiry in assessing whether an arbitral award ought to be set aside under Article 34(2)(a)(iii) of the Model Law.
Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd	Court of Appeal	Yes	[2010] 3 SLR 1	Singapore	Cited for the principle that mere errors of law or fact are not sufficient to warrant setting aside an arbitral award under Art 34(2)(a)(iii) of the Model Law.
Lesotho Highlands Development Authority v Impregilo SpA and others	House of Lords	Yes	[2006] 1 AC 221	United Kingdom	Cited for the distinction between the erroneous exercise of an available power and the purported exercise of a power which the arbitral tribunal did not possess.
Paklito Investment Limited v Klockner East Asia Limited	High Court of Hong Kong	Yes	[1993] 2 HKLR 39	Hong Kong	Cited regarding the court's residual discretion to enforce an arbitral award notwithstanding that one of the prescribed grounds for resisting enforcement has been established.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
UNCITRAL Model Law on International Commercial Arbitration	United Nations
International Arbitration Act (Cap 143A, 2002 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Dispute Adjudication Board
DAB decision
FIDIC Red Book
Notice of Dissatisfaction
Arbitral Tribunal
Final Award
Interim Award
Jurisdiction
Natural Justice
Rehearing
Terms of Reference

15.2 Keywords

arbitration
construction
DAB
FIDIC
enforcement
jurisdiction
natural justice

17. Areas of Law

Area Name	Relevance Score
Construction Law	80
Arbitration	75
Contract Law	70
International Commercial Arbitration	65
Commercial Litigation	60
Dispute Resolution	55

16. Subjects

Arbitration
Construction Dispute
Contract Law