PT Perusahaan Gas Negara v CRW: Interim Award Enforcement & Arbitrability

In PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation, the Singapore Court of Appeal heard appeals by PT Perusahaan Gas Negara (PGN) against CRW Joint Operation (CRW), concerning the setting aside of an interim arbitral award ordering PGN to pay CRW US$17,298,834.57 and the setting aside of an order granting CRW leave to enforce the interim award. The court, with Sundaresh Menon CJ and Quentin Loh J in the majority and Chan Sek Keong SJ dissenting, dismissed the appeals, holding that the interim award was valid and enforceable. The case involved interpretation of the dispute resolution mechanism in a contract based on the FIDIC Red Book and the effect of Section 19B of the International Arbitration Act.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeals dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal addresses the enforceability of an interim arbitral award and the arbitrability of disputes under FIDIC contracts.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
PT Perusahaan Gas Negara (Persero) TBKAppellantCorporationAppeal DismissedLost
CRW Joint OperationRespondentOtherAppeal UpheldWon

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeYes
Chan Sek KeongSenior JudgeNo
Quentin LohJudgeNo

4. Counsels

Counsel NameOrganization
Colin Ong Yee ChengEldan Law LLP
Wong Wai HanRodyk & Davidson LLP
Cavinder BullDrew & Napier LLC
Foo Yuet MinDrew & Napier LLC
Lim May JeanDrew & Napier LLC
Darryl Ho PingDrew & Napier LLC

4. Facts

  1. PGN engaged CRW to design, procure, install, test, and pre-commission a pipeline in 2006.
  2. The contract between PGN and CRW was governed by Indonesian law and included conditions based on the FIDIC Red Book.
  3. Disputes arose over 13 Variation Order Proposals (VOPs) submitted by CRW.
  4. The disputes were referred to a Dispute Adjudication Board (DAB), which issued several decisions.
  5. PGN rejected DAB Decision No. 3 (DAB No 3), which required PGN to pay CRW US$17,298,834.57.
  6. PGN lodged a Notice of Dissatisfaction (NOD) against DAB No 3.
  7. CRW commenced arbitration seeking a declaration that PGN had an immediate obligation to pay the adjudicated sum.

5. Formal Citations

  1. PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation, Civil Appeals Nos 148 and 149 of 2013; Summonses Nos 5277 and 5985 of 2014, [2015] SGCA 30

6. Timeline

DateEvent
PGN engaged CRW to design, procure, install, test and pre-commission a pipeline.
DAB decision No. 3 (DAB No 3) conveyed to the parties at a meeting.
PGN lodged a Notice of Dissatisfaction (NOD) against DAB No 3.
DAB issued written grounds for DAB No 3.
CRW commenced arbitration claiming PGN had an immediate obligation to pay the Adjudicated Sum.
The 2009 Tribunal issued a Final Award.
CRW obtained leave to enforce the Final Award.
Court of Appeal upheld the decision that the 2009 Majority Arbitrators had exceeded their jurisdiction.
CRW commenced a second arbitration.
The 2011 Tribunal issued the Interim Award.
Leave was given to enforce the Interim Award.
The 2011 Tribunal issued a Partial Award.
Judgment reserved.

7. Legal Issues

  1. Enforceability of Interim Arbitral Award
    • Outcome: The Court held that the interim award was valid and enforceable.
    • Category: Substantive
    • Sub-Issues:
      • Finality of interim award
      • Compliance with Section 19B of the International Arbitration Act
  2. Arbitrability of Disputes
    • Outcome: The Court determined the scope of disputes that could be referred to arbitration under the contract's dispute resolution mechanism.
    • Category: Jurisdictional
    • Sub-Issues:
      • Scope of arbitration agreement
      • Interpretation of FIDIC contract clauses

8. Remedies Sought

  1. Declaration of Obligation to Pay
  2. Order for Prompt Payment
  3. Setting Aside of Arbitral Award

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Arbitration
  • Construction Law

11. Industries

  • Construction
  • Energy

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
PT Perusahaan Gas Negara (Persero) TBK v CRW Joint OperationHigh CourtYes[2010] 4 SLR 672SingaporeThe High Court decision where the Final Award was set aside because the 2009 Majority Arbitrators exceeded their jurisdiction.
CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBKCourt of AppealYes[2011] 4 SLR 305SingaporeThe Court of Appeal upheld the decision that the 2009 Majority Arbitrators had exceeded their jurisdiction and that there had been a breach of natural justice.
PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV and others and another appealCourt of AppealYes[2014] 1 SLR 372SingaporeCited for its interpretation of Section 19B of the IAA, clarifying that all awards, regardless of the stage of the arbitration, are final and binding.
PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation (Indonesia) and another matterHigh CourtYes[2014] SGHC 146SingaporeThe High Court decision under appeal, which declined to set aside the Interim Award and dismissed SUM 3923 and OS 683.
Tjong Very Sumito and others v Antig Investments Pte LtdCourt of AppealYes[2009] 4 SLR(R) 732SingaporeCited for the definition of 'dispute' in the context of an arbitration agreement.
Diag Human SE v Czech RepublicN/AYes[2013] All ER (D) 309N/ACited as an example of a case where the tribunal mistakenly characterized the award as a partial rather than a provisional award.
Tang Boon Jek Jeffrey v Tan Poh Leng StanleyCourt of AppealYes[2001] 3 SLR 327SingaporeCited as the case that Section 19B of the IAA was introduced to overrule, regarding when an arbitral tribunal is functus officio.
Dawnays Ltd v F G Minter Ltd and Trollope and Colls LtdN/AYes[1971] 1 WLR 1205N/ACited for the principle that an interim certificate is to be regarded virtually as cash.
Gilbert-Ash (Northern) Ltd v Modern Engineering (Bristol) LtdN/AYes[1974] AC 689N/ACited for the principle that a claim based on a binding but non-final DAB decision would be subject to any set-off or counterclaim.
China Construction (South Pacific) Development Co Pte Ltd v Leisure Park (Singapore) Pte LtdN/AYes[1999] 3 SLR(R) 583N/ACited for the principle that a contractor is entitled to summary judgment on an architect’s certificate in the absence of fraud or improper pressure.
GTMS Construction Pte Ltd v Ser Kim Koi (Chan Sau Yan and Chan Sau Yan Associates, third parties)N/AYes[2015] 1 SLR 671N/ACited for the principle that a contractor is entitled to summary judgment on an architect’s certificate in the absence of fraud or improper pressure.
Nikola Rotenberg v Sucafina SAHigh CourtYes[2011] 1 CLC 563EnglandCited for the distinction between an award under s. 39 of the 1996 Act and one made pursuant to s. 47 of the 1996 Act.
Sucafina SA v RotenburgCourt of AppealYes[2012] 2 CLC 203EnglandCited for the distinction between orders under s. 38 and awards under s. 39 and s. 47.

13. Applicable Rules

Rule Name
Rules of Arbitration of the International Chamber of Commerce
UNCITRAL Model Law on International Commercial Arbitration
Rules of Court (Cap 322, R 5, 2014 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore
International Arbitration ActSingapore

15. Key Terms and Keywords

15.1 Key Terms

  • Interim Award
  • Dispute Adjudication Board (DAB)
  • Notice of Dissatisfaction (NOD)
  • FIDIC Red Book
  • International Arbitration Act (IAA)
  • Section 19B
  • Adjudicated Sum
  • Arbitrability
  • Provisional Award
  • Enforcement Order

15.2 Keywords

  • Arbitration
  • Interim Award
  • Enforcement
  • FIDIC
  • Construction
  • Contract
  • Singapore
  • International Arbitration Act
  • Dispute Adjudication Board

17. Areas of Law

Area NameRelevance Score
Contract Law80
Arbitration75
International Commercial Law60
International Arbitration Act50
Enforcement of Foreign Judgments40
Construction Contracts30
Asset Recovery25

16. Subjects

  • Arbitration
  • Contract Law
  • Construction Dispute
  • Enforcement of Arbitral Awards