CDM v CDP: Setting Aside & Enforcement of Arbitration Award - Jurisdiction & Natural Justice

In CDM and others v CDP, the Singapore High Court addressed Originating Summons 1307 of 2019 and Originating Summons 1124 of 2019, concerning a dispute arising from a contract for the construction of an offshore drilling rig. CDM, CDN, and CDO, the Plaintiffs, sought to set aside a partial arbitration award in favor of CDP, the Defendant, a shipbuilder. The Plaintiffs argued that the arbitral tribunal exceeded its jurisdiction and breached the rules of natural justice. The Defendant applied for leave to enforce the award. The court dismissed the Plaintiffs' application to set aside the award and a related stay application, finding that the tribunal acted within its jurisdiction and did not breach the rules of natural justice.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Originating Summons 1307 of 2019 dismissed. Stay Application dismissed.

1.3 Case Type

Arbitration

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court decision on setting aside and enforcement of a partial arbitration award. Key issues: Tribunal's jurisdiction and breach of natural justice.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
CDMPlaintiff, RespondentCorporationApplication DismissedLost
CDOPlaintiffCorporationApplication DismissedLost
CDPDefendant, ClaimantCorporationEnforcement AllowedWon
CDNPlaintiffCorporationApplication DismissedLost

3. Judges

Judge NameTitleDelivered Judgment
S MohanJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Navinder SinghKSCGP Juris LLP
Farah Nazura Binte ZainudinKSCGP Juris LLP
Ker YanguangMorgan Lewis Stamford LLC
Daniel Chia Hsiung WenMorgan Lewis Stamford LLC
Annette Liu Jia YingMorgan Lewis Stamford LLC

4. Facts

  1. CDM, CDN, and CDO (the Plaintiffs) entered into contracts with CDP (the Defendant) for the construction of an offshore drilling rig.
  2. Disputes arose between the parties, leading to arbitration proceedings in Singapore.
  3. The arbitration proceedings culminated in a partial arbitration award in the Defendant’s favor.
  4. The Plaintiffs applied to set aside the award, arguing that the arbitral tribunal exceeded its jurisdiction and breached the rules of natural justice.
  5. The Defendant sought to enforce the award as a judgment of the court.
  6. The Plaintiffs also applied for a stay of enforcement of the award pending the disposal of their application to set it aside.
  7. The Tribunal found that the 1st Plaintiff had approved the launch on 28 April 2015 for the second launch on 3 May 2015.

5. Formal Citations

  1. CDM and others v CDP, Originating Summons 1307 of 2019 and Originating Summons 1124 of 2019 (Summons 5816 of 2019), [2020] SGHC 141

6. Timeline

DateEvent
Contract X and Contract Y signed between the Plaintiffs and the Defendant.
Addendum No. 1 entered into by the 1st Plaintiff and Defendant.
Contracts Addendum No. 2 entered into by the 1st Plaintiff and Defendant.
Defendant purported to launch Hull No. X.
Defendant issued an invoice for the Fourth Instalment.
Construction and Progress Meeting held.
Hull No. X undocked and launched a second time.
Defendant demanded payment of the Fourth Instalment.
Defendant issued a default notice.
Defendant issued its Notice of Arbitration.
1st Plaintiff sought to terminate Contract X.
Defendant treated the 1st Plaintiff’s letter as a repudiation of Contract X.
Oral hearing in the Arbitration began.
Oral hearing in the Arbitration concluded.
Tribunal rendered a Final Partial Award in the Defendant’s favour.
Order made ex parte granting the Defendant leave to enforce the Award.
OS 1307/2019 filed by the Plaintiffs.
SUM 5816/2019 filed by the Plaintiffs.
Hearing on both OS 1307/2019 and the Stay Application.
Stay Application dismissed.
Oral grounds for decision in OS 1307/2019 delivered and dismissed.

7. Legal Issues

  1. Excess of Jurisdiction
    • Outcome: The court held that the Tribunal did not act in excess of its jurisdiction.
    • Category: Jurisdictional
    • Sub-Issues:
      • Determining matters outside the scope of submission to arbitration
  2. Breach of Natural Justice
    • Outcome: The court held that there was no breach of natural justice.
    • Category: Procedural
    • Sub-Issues:
      • Denial of the right to present a case
      • Failure to provide a fair hearing
  3. Stay of Enforcement
    • Outcome: The court dismissed the application for a stay of enforcement.
    • Category: Procedural

8. Remedies Sought

  1. Setting aside of arbitration award
  2. Stay of enforcement of arbitration award

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Construction
  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) LtdHigh CourtYes[2010] 3 SLR 1SingaporeCited for the principle of ascertaining matters within the scope of submission to the arbitral tribunal.
PT Prima International Development v Kempinski Hotels SA and other appealsCourt of AppealYes[2012] 4 SLR 98SingaporeCited for the role of pleadings in defining the jurisdiction of the arbitrator.
GD Midea Air Conditioning Equipment Co Ltd v Tornado Consumer Goods Ltd and another matterHigh CourtYes[2018] 4 SLR 271SingaporeCited for the use of the list of issues agreed by the parties to determine the scope of submission.
L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte LtdHigh CourtYes[2013] 1 SLR 125SingaporeCited for the requirements to establish a breach of natural justice.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte LtdCourt of AppealYes[2007] 3 SLR(R) 86SingaporeCited for the principle that an arbitrator should not base decisions on matters not submitted or argued.
TMM Division Maritima SA de CV v Pacific Richfield Marine Pte LtdHigh CourtYes[2013] 4 SLR 972SingaporeCited for the principle that a chain of reasoning is open to a tribunal if it flows reasonably from a premise argued by either party.
AKN and another v ALC and others and other appealsCourt of AppealYes[2015] 3 SLR 488SingaporeCited for the principle that the court will not set aside an award simply because an arbitrator made an error of law or fact.
Strandore Invest A/S and others v Soh Kim WatHigh CourtYes[2010] SGHC 174SingaporeCited for the legal principles governing a stay of execution pending appeal.
Lian Soon Construction Pte Ltd v Guan Qian Realty Pte LtdCourt of AppealYes[1999] 1 SLR(R) 1053SingaporeCited for the legal principles governing a stay of execution pending appeal.
Man Diesel Turbo SE v IM Skaugen Marine Services Pte LtdHigh CourtYes[2019] 4 SLR 537SingaporeCited for the similarity in legal principles applicable to stay of execution of judgments and enforcement of arbitral awards.
Israel Sorin (Izzy) Shohat v Balram ChainraiCourt of First InstanceYes[2017] 6 HKC 174Hong KongCited for the principle that the enforcement of an arbitral award is subject to the same regime governing the stay of execution of an ordinary judgment.
BSG Resources Ltd v Vale SA and othersEnglish High CourtYes[2019] EWHC 2456 (Comm)England and WalesCited for the power of the court to grant a stay of enforcement of an arbitral award.
Far East Shipping v AKP SovcomflotN/AYes[1995] 1 Lloyd’s Rep 520N/ACited for the principle that a plaintiff who elects to convert an award into an English judgment ought to be subject to the same procedural rules as generally apply to the enforcement of such judgments.
Socadec SA v Pan Afric Impex CoEnglish High CourtYes[2003] EWHC 2086 (Comm)England and WalesCited for the principles a judge should apply when considering a stay of enforcement, including the strength of the argument that the award was invalid.
Pacific China Holdings Ltd (in liq) v Grand Pacific Holdings Ltd (No 2)N/ANo[2012] 6 HKC 40Hong KongCited for the principle that a party who was unsuccessful in an application to set aside an arbitral award should be ordered to pay costs on an indemnity basis.
Chimbusco International Petroleum (Singapore) Pte Ltd v Fully Best Trading LtdHong Kong Court of First InstanceNo[2016] 1 HKC 149Hong KongCited for the principle that the basis of awarding costs on an indemnity basis was that parties had consensually agreed to submit their dispute to arbitration and accept the arbitral award as final and binding on them.
Airtrust (Hong Kong) Ltd v PH Hydaulics & Engineering Pte LtdHigh CourtYes[2016] 5 SLR 103SingaporeCited for the principle that an order of costs on an indemnity basis is the exception rather than the norm and requires justification.
Triulzi Cesare SRL v Xinyi Group (Glass) Co LtdHigh CourtNo[2015] 1 SLR 114SingaporeCited as an example where the court dismissed an application to set aside an arbitral award and did not order costs on an indemnity basis.

13. Applicable Rules

Rule Name
Rules of Court (Cap 322, R 5, 2014 Rev Ed)

14. Applicable Statutes

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

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Setting aside
  • Enforcement
  • Jurisdiction
  • Natural justice
  • Partial award
  • Conditions precedent
  • Construction contract
  • Offshore drilling rig
  • UNCITRAL Model Law
  • Stay of execution

15.2 Keywords

  • arbitration
  • setting aside
  • enforcement
  • jurisdiction
  • natural justice
  • construction contract
  • Singapore

17. Areas of Law

Area NameRelevance Score
Arbitration90
Recourse against award80
Setting Aside Arbitral Award70
Civil Practice50
International Arbitration Act40
Natural justice40
Commercial Litigation30
Building and Construction Contracts30
Rules of court30
Building and Construction Law30
Interpretation of Contracts30
Contracts (Rights of Third Parties) Act20

16. Subjects

  • Arbitration
  • Contract Law
  • Civil Procedure