BRS v BRQ: Setting Aside Arbitration Award for Breach of Natural Justice & Time Limit Extension
In BRS v BRQ, the Singapore Court of Appeal addressed two appeals concerning an arbitration award related to a hydroelectric power plant project. BRS, the Seller, appealed against the dismissal of its application to set aside the award, while BRQ, the Buyer, appealed against the dismissal of its application to set aside the portion of the award related to the cut-off date. The court dismissed the Seller's appeal, finding it time-barred, and allowed the Buyer's appeal in part, remitting the issue of transmission line delays to the Tribunal for reconsideration. The court found that the Tribunal had breached natural justice by failing to consider evidence related to the transmission line delays.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Civil Appeal No 34 of 2019 dismissed. Civil Appeal No 35 of 2019 allowed in part.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal addresses setting aside an arbitration award, focusing on breaches of natural justice and time limit extensions. Appeal allowed in part.
1.7 Decision Date
2. Parties and Outcomes
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Judge of Appeal | No |
| Steven Chong | Judge of Appeal | No |
| Woo Bih Li | Judge | Yes |
4. Counsels
4. Facts
- BRS was undertaking a project to build a hydroelectric power plant through a special purpose vehicle company, BRR.
- BRR ran out of funds, and BRQ entered as an investor to inject fresh funds for the Project to continue.
- Under a Securities Purchase Agreement, BRQ contracted to buy all the shares in BRR.
- The SPA envisaged that the Project would be completed by 31 March 2013, and the Project cost would be about S$170m.
- The Project was not wet commissioned on 31 March 2013, but more than two years later on 31 October 2015.
- The arbitral tribunal issued a final award that was in substance in favour of the Claimants but limited the Seller’s liability to 30 June 2014.
- Both the Seller and Claimants filed separate Originating Summonses to set aside portions of the Award.
5. Formal Citations
- BRS v BRQ and another and another appeal, , [2020] SGCA 108
- BRS v BRQ, , Civil Appeal No 34 of 2019
- BRQ v BRS, , Civil Appeal No 35 of 2019
- BRS v BRQ, , Originating Summons No 770 of 2018
- BRQ v BRS, , Originating Summons No 512 of 2018
6. Timeline
| Date | Event |
|---|---|
| SPV carried on with the Project | |
| SPV entered into the Bulk Power Transmission Agreement with a grid company | |
| SPV ran out of funds | |
| Parties entered into the Securities Purchase Agreement | |
| Project failed to achieve wet commissioning | |
| Buyer issued a Cost Overrun Notice to the Seller | |
| Seller acknowledged the Cost Overrun Notice | |
| Buyer began to oversee the Project more closely | |
| Buyer issued a takeover notice and took over full control of the Project | |
| Legal notice for the arbitration proceedings issued by the Buyer | |
| Buyer initiated arbitration proceedings against the Seller and its parent company | |
| Transmission line works completed | |
| Project was wet commissioned | |
| Award was issued | |
| Award received by the parties | |
| Seller requested the Tribunal to correct the Award | |
| Tribunal dismissed the Correction Request | |
| Claimants applied to set aside part of the Award | |
| Seller sought to set aside other parts of the Award | |
| Civil Appeal No 34 of 2019 and Civil Appeal No 35 of 2019 | |
| Judgment reserved | |
| Judgment |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court found that the Tribunal breached natural justice by failing to consider evidence related to transmission line delays, which caused real and actual prejudice to the Claimants.
- Category: Substantive
- Sub-Issues:
- Failure to consider evidence
- Failure to consider arguments
- Time Limit for Setting Aside Award
- Outcome: The court held that the Seller's setting-aside application was time-barred because the Correction Request was not in substance an Art 33 correction request.
- Category: Procedural
- Sub-Issues:
- Extension of time limit
- Interpretation of Article 33
- Correction of award
8. Remedies Sought
- Setting Aside of Arbitration Award
- Remission of Award to Tribunal
9. Cause of Actions
- Breach of Contract
- Setting Aside Arbitration Award
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Construction
- Energy
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| BRQ and another v BRS and another and another matter | High Court | Yes | [2019] SGHC 260 | Singapore | Cited for background facts of the dispute. |
| State of Arunachal Pradesh v Damani Construction Co | Supreme Court | Yes | (2007) 10 SCC 742 | India | Cited regarding the interpretation of Section 33 of the Arbitration and Conciliation Act 1996. |
| Shayam Sunder v Kotak Securities Ltd | High Court of Delhi | Yes | (2017) Del 4157 | India | Cited for following the decision in State of Arunachal Pradesh v Damani Construction Co. |
| M/s Ved Prakash Mithal and Sons v Union of India | Supreme Court | Yes | M/s Ved Prakash Mithal and Sons v Union of India | India | Cited regarding the interpretation of Section 34(3) of the Arbitration and Conciliation Act 1996. |
| Municipal Corporation v Walter Bau AG | Bombay High Court | Yes | (2019) SCC OnLine Bom 2920 | India | Cited regarding the interpretation of Section 34 of the Indian 1996 Act. |
| Opotiki Packing & Coolstorage Ltd v Opotiki Fruitgrowers Co-operative Ltd (In Receivership) | New Zealand Court of Appeal | Yes | [2003] 1 NZLR 205 | New Zealand | Cited regarding the interpretation of Article 33 of the First Schedule of the New Zealand Arbitration Act. |
| Todd Petroleum Mining Co Ltd v Shell (Petroleum Mining) Co Ltd | New Zealand Court of Appeal | Yes | [2015] 2 NZLR 180 | New Zealand | Cited regarding the interpretation of Article 33(3) and 34(3) of the Model Law. |
| ABC Co v XYZ Co Ltd | High Court | Yes | [2003] 3 SLR(R) 546 | Singapore | Cited for the principle that the court does not have the power to extend the three-month time limit in Article 34(3). |
| BXS v BXT | High Court | Yes | [2019] 4 SLR 390 | Singapore | Cited for the principle that the court does not have the power to extend the three-month time limit in Article 34(3). |
| Gannet Shipping Ltd v Eastrade Commodities Inc and another application | Commercial Court | Yes | [2002] 1 QB (Com Ct) 713 | England | Cited for the distinction between errors affecting the tribunal’s thought and errors in the tribunal’s thought process. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | High Court | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the requirements for setting aside an arbitral award on the breach of natural justice ground. |
| AKN and another v ALC and others and other appeals | Court of Appeal | Yes | [2015] 3 SLR 488 | Singapore | Cited for the principle that to fail to consider an important issue that has been pleaded in an arbitration is a breach of natural justice. |
| TMM Division Maritime SA de CV v Pacific Richfield Marine Pte Ltd | High Court | Yes | [2013] 4 SLR 972 | Singapore | Cited for the principle that as long as one argument resolves the issue, there is no justification for insisting that the arbitral tribunal go on to consider the other arguments which have been rendered academic. |
| Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd | High Court | Yes | [2010] SGHC 80 | Singapore | Cited as an instance where such a clear and inescapable inference that the tribunal had failed to consider an important issue. |
| European Grain and Shipping Ltd v Johnston | English Court of Appeal | Yes | [1983] 2 WLR 241 | England | Cited for the doctrine of approbation and reprobation. |
| BWG v BWF | High Court | Yes | [2020] 1 SLR 1296 | Singapore | Cited for the principle that the doctrine of approbation and reprobation applies when the parties who sought to advance inconsistent positions had already secured actual benefits from their prior positions. |
13. Applicable Rules
| Rule Name |
|---|
| UNCITRAL Model Law on International Commercial Arbitration |
| UNCITRAL Model Law on International Commercial Arbitration Art 33 |
| UNCITRAL Model Law on International Commercial Arbitration Art 34(2)(a)(ii) |
| UNCITRAL Model Law on International Commercial Arbitration Art 34(3) |
| UNCITRAL Model Law on International Commercial Arbitration Art 34(4) |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act | Singapore |
| International Arbitration Act (Cap 143A, 2002 Rev Ed) s 24(b) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Wet Commissioning
- Cost Overrun
- Securities Purchase Agreement
- Bulk Power Transmission Agreement
- Cut-off Date
- Penstock
- Transmission Line
- Rewelding Method
- Relining Method
15.2 Keywords
- Arbitration
- Setting Aside
- Breach of Natural Justice
- Time Limit
- International Arbitration Act
- UNCITRAL Model Law
- Construction Dispute
- Energy Project
17. Areas of Law
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure