BSM v BSN: Setting Aside Arbitral Awards for Breach of Natural Justice & Failure to Present Case
In two related originating summons, BSM sought to set aside arbitral awards in favor of BSN and BSP, arguing breach of natural justice and inability to present its case. The High Court of Singapore, on 8 February 2019, dismissed both applications, finding that the Tribunal had addressed the essential issues and that BSM's concerns regarding wasted costs had been remedied by additional awards. The court rejected BSM's arguments regarding the limitation of liability and apportionment of costs, concluding that the Tribunal's decisions were within its discretion and did not violate agreed arbitral procedures. The court ordered BSM to pay the Companies’ costs in the sum of $28,000, inclusive of disbursements for both OS 747 and 748.
1. Case Overview
1.1 Court
High Court of Singapore1.2 Outcome
Originating Summons dismissed
1.3 Case Type
Arbitration
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court dismisses BSM's application to set aside arbitral awards, finding no breach of natural justice or failure to present its case.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| BSM | Applicant | Corporation | Applications Dismissed | Lost | Daniel Chia, Leonard Chew, Ker Yanguang |
| BSN | Respondent | Corporation | Judgment for Respondent | Won | Lok Vi Ming, Joseph Lee, Tang Jin Sheng, Natalie Joy Huang |
| BSP | Respondent | Corporation | Judgment for Respondent | Won | Lok Vi Ming, Joseph Lee, Tang Jin Sheng, Natalie Joy Huang |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Belinda Ang Saw Ean | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Daniel Chia | Morgan Lewis Stamford LLC |
| Leonard Chew | Morgan Lewis Stamford LLC |
| Ker Yanguang | Morgan Lewis Stamford LLC |
| Lok Vi Ming | LVM Law Chambers LLC |
| Joseph Lee | LVM Law Chambers LLC |
| Tang Jin Sheng | LVM Law Chambers LLC |
| Natalie Joy Huang | LVM Law Chambers LLC |
4. Facts
- BSM sought to set aside two arbitral awards in favor of BSN and BSP.
- BSM argued breach of natural justice and inability to present its case.
- The Tribunal had reserved costs on 27 May 2016.
- The Companies amended their statements of claim to include a claim for repudiatory breach.
- BSM claimed wasted costs due to the last-minute amendments.
- BSM relied on limitation of liability provisions in the contracts.
- The Tribunal found that the Companies’ claims for damages arising from BSM’s repudiation of the respective contracts had been established.
5. Formal Citations
- BSM v BSN and another matter, , [2019] SGHC 185
- BSM v BSN, 747 of 2017, Originating Summons No. 747 of 2017
- BSM v BSP, 748 of 2017, Originating Summons No. 748 of 2017
6. Timeline
| Date | Event |
|---|---|
| BSP delivered the third shipment of telecommunications equipment to BSM. | |
| BSP invoiced BSM for the equipment sold with 11 August 2014 as the due date for payment. | |
| BSN invoiced BSM for technical services rendered with 18 August 2014 as the due date for payment. | |
| BSP commenced arbitration proceedings against BSM in Singapore. | |
| BSN commenced arbitration proceedings against BSM in Singapore. | |
| The Companies applied to the Tribunal for leave to amend their respective statements of claim to introduce a claim for repudiatory breach. | |
| The Tribunal produced the BSP Award and the BSN Award. | |
| BSM filed Originating Summons No. 747 of 2017 against BSN. | |
| BSM filed Originating Summons No. 748 of 2017 against BSP. | |
| BSM’s Written Submissions dated. | |
| Companies’ Written Submissions dated. | |
| Hearing date. | |
| Hearing date. | |
| Hearing date. | |
| Applications to set aside the Awards were adjourned and the Wasted Costs Issue was remitted to the Tribunal. | |
| Mr Lok notified the Tribunal in writing of the remission made on 14 November 2018. | |
| The Tribunal asked for a copy of this court’s orders in relation to the remission. | |
| Mr Lok explained to the Tribunal that the parties had not extracted the order of court and instead provided the Tribunal with the background leading to the remission. | |
| The Tribunal issued two Additional Awards. | |
| The Companies’ written submissions dated. | |
| Adjourned hearing of the setting aside applications. | |
| Judgment Date |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court found no breach of natural justice, as the Tribunal had addressed the essential issues and BSM's concerns regarding wasted costs had been remedied by additional awards.
- Category: Substantive
- Sub-Issues:
- Failure to deal with essential issues
- Failure to consider submissions
- Inability to Present Case
- Outcome: The court found that BSM was able to present its case and that the Tribunal's decisions were within its discretion.
- Category: Substantive
- Failure to Adhere to Arbitral Procedure
- Outcome: The court found no failure on the part of the Tribunal to abide by the agreed arbitral procedure, in particular to the apportionment of costs in the BSP Arbitration as provided for under Article 13.4 of the Equipment Purchase Contract.
- Category: Procedural
8. Remedies Sought
- Setting Aside of Arbitral Awards
9. Cause of Actions
- Breach of Contract
- Repudiation of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Telecommunications
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd | High Court | Yes | [2013] 4 SLR 972 | Singapore | Cited for the principle that a tribunal is not obliged to deal with each point made by a party, but must resolve the essential issues either expressly or implicitly. |
| AKN v ALC | Court of Appeal | Yes | [2016] 1 SLR 966 | Singapore | Cited for the legal principles and mechanics of Article 34(4) in the context of a setting aside application, holding that a remission under Art 34(4) is an alternative to setting aside. |
| JVL Agro Industries Ltd v Agritrade International Pte Ltd | High Court | Yes | [2016] 4 SLR 768 | Singapore | Cited as an example of a remission under Art 34(4) of Model Law. |
| ADG v ADI | High Court | Yes | [2014] SGHC 73 | Singapore | Cited regarding the overlap between the right to be heard and the right to present a party’s case. |
| Government of the republic of Philippines v Philippine International Air Terminals Co, Inc | High Court | Yes | [2007] 1 SLR (R) 278 | Singapore | Cited regarding the overlap between the right to be heard and the right to present a party’s case. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | High Court | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for setting out the extent of when departure from the evidence and submissions before the arbitral tribunal is said to have breached the requirements of natural justice. |
| Pacific Recreation Pte Ltd v SY Technology Inc | High Court | Yes | [2008] 2 SLR(R) 491 | Singapore | Cited for the principle that a breach of natural justice can occur if the arbitral tribunal decided a case on a ground not raised or contemplated by the parties. |
| AQU v AQV | High Court | Yes | [2015] SGHC 26 | Singapore | Cited for the principle that natural justice requires the arbitral tribunal to apply its mind to the critical issues and arguments. |
| Photo Production Ltd v Securicor Ltd | House of Lords | Yes | [1980] 2 WLR 283 | United Kingdom | Cited by BSM in support of its proposition that Article 11.6 would survive the termination of the contract. |
| Coal & Oil v GHCL | High Court | Yes | [2015] 3 SLR 154 | Singapore | Cited for the principle that there must be a material breach of the agreed procedure serious enough to justify the exercise of the court’s discretion to set aside an award. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitral Award
- Setting Aside
- Breach of Natural Justice
- Wasted Costs
- Limitation of Liability
- Repudiation
- UNCITRAL Model Law
- International Arbitration Act
- Equipment Purchase Contract
- Technical Service Contract
15.2 Keywords
- Arbitration
- Setting Aside
- Breach of Natural Justice
- Singapore
- Contract Law
16. Subjects
- Arbitration
- International Arbitration
- Contract Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- International Arbitration
- Contract Law
- Civil Procedure