ASG v ASH: Setting Aside Arbitration Award for Breach of Natural Justice & Costs

In ASG v ASH, the High Court of Singapore addressed an application by ASG to set aside an arbitration award against ASH. The sole arbitrator had dismissed the bulk of ASG's claims. ASG sought to set aside the principal award based on breaches of natural justice, alleging the arbitrator failed to consider evidence. They also challenged the correction and costs awards, arguing the arbitrator lacked jurisdiction. The court dismissed the application to set aside the principal award but allowed the application to set aside the correction award and the costs award. ASG appealed the decision regarding the principal award.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application to set aside the principal award dismissed; application to set aside the correction award and the costs award allowed.

1.3 Case Type

Arbitration

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Application to set aside an arbitration award. The court dismissed the application to set aside the principal award but allowed the application to set aside the correction award and the costs award.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
ASGPlaintiffCorporationApplication to set aside the principal award dismissedLost
ASHDefendantCorporationApplication to set aside the principal award dismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Vinodh CoomaraswamyJudgeYes

4. Counsels

Counsel NameOrganization
Alvin Yeo SCWongPartnership LLP
Ian de VazWongPartnership LLP
Chua MingHaoWongPartnership LLP
Thian Zhen LiWongPartnership LLP
Toh Chen HanMPillay
Mohan PillayMPillay
Jasmine KokMPillay

4. Facts

  1. A sole arbitrator dismissed the bulk of the plaintiff’s claims against the defendant.
  2. The plaintiff applied to set aside the principal award, alleging a breach of the rules of natural justice.
  3. The plaintiff also applied to set aside the correction award and the costs award, arguing the arbitrator lacked jurisdiction.
  4. The contract between the parties included a letter of acceptance, standard terms and conditions, particular conditions, and appendices.
  5. The plaintiff sought an extension of time for delays in constructing diaphragm walls and additional rock excavation.
  6. The architects granted a 39-day extension of time for changes to the toe depth of the diaphragm wall panels.
  7. The architects granted a further 36-day extension of time for late finalization of design, additional rock excavation, and site obstruction.

5. Formal Citations

  1. ASG v ASH, Originating Summons No 288 of 2015, [2016] SGHC 130

6. Timeline

DateEvent
Letter of acceptance dated
Plaintiff was to take possession of the site
Plaintiff was to start work
Plaintiff submitted a baseline programme of works
Engineers issued changes to the toe level and other specifications for the diaphragm wall panels
Engineers issued changes to the toe level and other specifications for the diaphragm wall panels
Engineers approved by email, and with certain amendments, the first set of shop drawings
Engineers stamped their approval on the shop drawings. The plaintiff started construction of the diaphragm walls
Plaintiff sought an extension of time arising from the engineers’ changes in the toe levels of the diaphragm wall panels for Blocks 1 and 2
Architects rejected the plaintiff’s first extension of time claim
Plaintiff denied that its first extension of time of claim was necessitated by causes within its own control
Architects responded by granting the plaintiff a 39-day extension of time
Extended completion date
Architects wrote to the plaintiff asserting that the defendant was thus entitled to deduct liquidated damages from future progress payments to the plaintiff
Plaintiff issued a formal notice of dispute under the Standard Conditions to the architects
Works for Blocks 1, 2 and 3 were substantially completed
Architects granted the plaintiff a further extension of time of 36 days
Plaintiff replied to the architects
Architects certified that the works for Blocks 1, 2 and 3 were substantially completed
Defendant notified the plaintiff that it was entitled to impose liquidated damages on the plaintiff in the sum of approximately $3.51m for an alleged delay of 26 days in completing the works
Plaintiff sent the architects a second formal notice of dispute under the Standard Conditions
Plaintiff served on the defendant its notice of arbitration issued under cl 34
Tribunal was duly constituted
Evidential phase in the arbitration took place
Evidential phase in the arbitration took place
Closing oral submissions took place
Closing oral submissions took place
Arbitrator issued his award
Plaintiff’s solicitors asked the arbitrator to correct a computational error in the award
Defendant’s solicitors reminded the arbitrator that the parties had agreed during the oral closing submissions that the award should be made save as to costs, with the parties to address the issue of costs separately
Plaintiff’s solicitors objected to the defendant’s solicitors’ request that the arbitrator deal with costs separately
Arbitrator issued the correction award
Defendant’s solicitors repeated their request to the arbitrator for directions to the parties to submit on costs
Plaintiff’s solicitors indicated that they maintained their position taken on 14 January 2015 that the arbitrator was functus officio
Arbitrator directed the parties to file and serve written submissions on the costs of the arbitration
Defendant’s solicitors lodged their submissions
Plaintiff’s solicitors lodged theirs
Plaintiff commenced these proceedings, applying for the principal award, the correction award and “any subsequent award on costs…made by the arbitrator” to be set aside
Arbitrator delivered the costs award
Arguments before the court
Arguments before the court
Judgment date

7. Legal Issues

  1. Breach of Natural Justice
    • Outcome: The court found that there was no breach of natural justice in the arbitrator's handling of the second extension of time claim.
    • Category: Procedural
    • Sub-Issues:
      • Failure to consider evidence
      • Inability to present case
  2. Jurisdiction of Arbitrator
    • Outcome: The court held that the arbitrator became functus officio after issuing the principal award and could not revisit the issue of costs.
    • Category: Jurisdictional
    • Sub-Issues:
      • Functus officio

8. Remedies Sought

  1. Setting aside of arbitration award
  2. Declaration that the plaintiff was entitled to an extension of time
  3. Declaration that the defendant had wrongfully imposed liquidated and ascertained damages
  4. Recovery of miscellaneous monetary claims
  5. Recovery of sum outstanding under the last four payment certificates together with contractual interest

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte LtdCourt of AppealYes[2007] 3 SLR(R) 86SingaporeCited for the principles that a party challenging an arbitration award for breach of natural justice must establish which rule was breached, how it was breached, the connection to the award, and how it prejudiced its rights; also cited for the court's approach to an application to set aside an award for breach of natural justice.
Tjong Very Sumito and others v Antig Investments Pte LtdCourt of AppealYes[2009] 4 SLR(R) 732SingaporeCited for the principle that courts should support, and not displace, the arbitral process.
AKN and another v ALC and others and other appealsCourt of AppealYes[2015] 3 SLR 488SingaporeCited for the principle that parties who opt for arbitration acknowledge and accept the attendant risk of having only a very limited right of recourse to the courts; also cited for the principle that parties do not have a right to a 'correct' decision from an arbitrator, but only to a decision within the ambit of their consent and which follows a fair process.
BLC and others v BLB and anotherUnknownYes[2014] 4 SLR 79SingaporeCited for the principle that courts will take a 'generous approach' toward reading the arbitral award where a dissatisfied party alleges that a tribunal failed to deal with an issue before it.
TMM Division Maritima SA de CV v Pacific Richfield Marine Pte LtdHigh CourtYes[2013] 4 SLR 972SingaporeCited for the arbitrator’s duty to deal with the arguments presented and the duty to attempt to understand the parties’ submissions.
Atkins Limited v The Secretary of State for TransportEnglish High CourtYes[2013] EWHC 139England and WalesCited for the principle that the Court is not required to carry out a hypercritical or excessively syntactical analysis of what the arbitrator has written.
Zermalt Holdings SA v Nu-Life Upholstery Repairs LtdUnknownYes[1985] 2 EGLR 14England and WalesCited for the principle that courts strive to uphold arbitration awards and do not approach them with a meticulous legal eye endeavouring to pick holes, inconsistencies and faults in awards.
SEF Construction Pte Ltd v Skoy Connected Pte LtdHigh CourtYes[2010] 1 SLR 733SingaporeCited for the principle that natural justice requires that the parties should be heard; it does not require that they be given responses on all submissions made.
Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte LtdHigh CourtYes[2010] SGHC 80SingaporeCited to show that the arbitrator failed to consider the issue because he mistakenly thought that the issue was not in dispute when it was.
L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appealCourt of AppealYes[2013] 1 SLR 125SingaporeCited for the principle that the requirement to show prejudice requires the plaintiff to show that the breach of natural justice could reasonably have made a difference to the arbitrator’s reasoning.
AQU v AQVHigh CourtYes[2015] SGHC 26SingaporeCited for the principle that no party to an arbitration had a right to expect the arbitral tribunal to accept its arguments, regardless of how strong and credible it perceived those arguments to be.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Arbitration Act (Cap 10, 2002 Rev Ed)Singapore
Arbitration Act (Cap 10, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Setting aside
  • Breach of natural justice
  • Extension of time
  • Liquidated damages
  • Functus officio
  • Diaphragm wall
  • Rock excavation
  • Architects
  • Principal award
  • Correction award
  • Costs award

15.2 Keywords

  • Arbitration
  • Setting aside
  • Breach of natural justice
  • Construction
  • Singapore

17. Areas of Law

Area NameRelevance Score
Arbitration95
Recourse against award90
Setting aside90
Natural justice70
Jurisdiction40
Contract Law30

16. Subjects

  • Arbitration
  • Construction Dispute
  • Contract Law
  • Civil Procedure