CEB v CEC: Setting Aside Arbitration Award for Breach of Contract and Public Policy
In CEB v CEC and CEB v CEE, the Singapore International Commercial Court addressed originating summonses by CEB, an Indian company, seeking to set aside arbitration awards in favor of CEC and CEE, both UAE companies. The arbitrations concerned disputes over contracts for the sale of palm oil, canola oil, and castor oil. CEB sought to set aside the awards based on alleged breaches of natural justice and public policy. The court, presided over by Simon Thorley IJ, dismissed the originating summonses, finding no grounds to set aside the arbitration awards. The court ordered CEB to pay the defendants' costs.
1. Case Overview
1.1 Court
SINGAPORE INTERNATIONAL COMMERCIAL COURT1.2 Outcome
Originating Summonses dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses CEB's application to set aside arbitration awards, finding no breach of natural justice or public policy in contract dispute.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| CEB | Plaintiff | Corporation | Claim Dismissed | Lost | Andre Darius Jumabhoy, Low Ying Ning Elaine |
| CEC | Defendant | Corporation | Claim Won | Won | Bazul Ashhab bin Abdul Kader, Prakaash s/o Paniar Silvam, Tanya Thomas Vadaketh, Tay Lin Qian |
| CED | Plaintiff | Corporation | Claim Dismissed | Lost | Andre Darius Jumabhoy, Low Ying Ning Elaine |
| CEE | Defendant | Corporation | Claim Won | Won | Bazul Ashhab bin Abdul Kader, Prakaash s/o Paniar Silvam, Tanya Thomas Vadaketh, Tay Lin Qian |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Simon Thorley | International Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Andre Darius Jumabhoy | Peter Low & Choo LLC |
| Low Ying Ning Elaine | Peter Low & Choo LLC |
| Bazul Ashhab bin Abdul Kader | Oon & Bazul LLP |
| Prakaash s/o Paniar Silvam | Oon & Bazul LLP |
| Tanya Thomas Vadaketh | Oon & Bazul LLP |
| Tay Lin Qian | Oon & Bazul LLP |
4. Facts
- Plaintiff and CEE entered into four contracts for palm oil and canola oil; CEE failed to pay.
- Plaintiff and CEE entered into six more contracts for castor oil.
- Plaintiff unilaterally cancelled the six castor oil contracts due to non-payment.
- CEE counterclaimed for losses due to the cancellation of the castor oil contracts.
- Plaintiff and CEC entered into 25 contracts for various commodities.
- CEC failed to make payments for 22 contracts.
- Plaintiff unilaterally cancelled three castor oil contracts with CEC.
5. Formal Citations
- CEB v CEC and another matter, , [2020] SGHC(I) 11
6. Timeline
| Date | Event |
|---|---|
| Plaintiff and CEE entered into four contracts for the sale of palm oil and canola oil. | |
| Payment under each contract was due. | |
| Plaintiff and CEE entered into six more contracts for the sale and purchase of castor oil. | |
| Castor oil was due to be shipped. | |
| CEC made a part payment of US$300,000 to the plaintiff. | |
| Plaintiff unilaterally cancelled the later six contracts. | |
| Parties entered into an arbitration agreement. | |
| Plaintiff commenced the CEE Arbitration by a Notice of Arbitration. | |
| Plaintiff served its Statement of Claim. | |
| CEC filed its Written Statement and Counterclaim. | |
| CEE filed its Written Statement and Counterclaim. | |
| Hearing in Singapore. | |
| Arbitrator issued the CEC Award. | |
| Arbitrator issued the CEE Award. | |
| Parties received the CEC and CEE Awards. | |
| Originating Summonses in the CEC and CEE Actions were issued. | |
| Originating Summonses were transferred to the Singapore International Commercial Court. | |
| Hearing via video-link. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court found that while there was a breach of natural justice, it would not set aside the award due to the plaintiff's failure to invoke s 33(4) of the 1996 Indian Act.
- Category: Procedural
- Sub-Issues:
- Failure to consider pleaded issue of consequential losses
- Related Cases:
- [2015] 3 SLR 488
- [2007] 3 SLR(R) 86
- Conflict with Public Policy
- Outcome: The court found that the outcome of the awards did not shock the conscience of the court and therefore did not conflict with public policy.
- Category: Substantive
- Sub-Issues:
- Manifest injustice
- Unconscionable windfall
- Related Cases:
- [2007] 1 SLR(R) 597
- [2018] SGHC 275
- Anticipatory Breach
- Outcome: The court held that the arbitrator did not err in law by failing to consider the question of anticipatory breach.
- Category: Substantive
- Related Cases:
- [2015] 5 SLR 1
8. Remedies Sought
- Setting aside of arbitral award
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Union of India v McDonnell Douglas Corp | English court | Yes | [1993] 2 Lloyd’s Rep 48 | England | Cited to interpret an arbitration clause with similar wording regarding the seat and conduct of the arbitration. |
| AKN and another v ALC and others and other appeals | Court of Appeal | Yes | [2015] 3 SLR 488 | Singapore | Cited for the principle that failure to consider an important pleaded issue in arbitration is a breach of natural justice. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | Court of Appeal | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the four factors to be established when challenging an arbitral award based on a breach of natural justice. |
| PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA | Court of Appeal | Yes | [2007] 1 SLR(R) 597 | Singapore | Cited for the principle that an award may only be set aside on public policy grounds in exceptional cases where it would 'shock the conscience'. |
| BAZ v BBA and others and other matters | High Court | Yes | [2018] SGHC 275 | Singapore | Cited for the balancing exercise between enforcing arbitral awards and avoiding violations of public policy. |
| BLC and others v BLB and another | Court of Appeal | Yes | [2014] 4 SLR 79 | Singapore | Cited for the principle of minimal curial intervention in arbitral proceedings and the consequences of parties' choices in arbitration. |
| The “STX Mumbai” and another matter | Court of Appeal | Yes | [2015] 5 SLR 1 | Singapore | Cited regarding the doctrine of anticipatory breach and its application to executed contracts. |
| John Holland Pty Ltd v Toyo Engineering Corp (Japan) | High Court | Yes | [2001] 1 SLR(R) 443 | Singapore | Cited for factors to be established by a party challenging an arbitral award on the basis of a breach of natural justice. |
| Sinclair v Woods of Winchester Ltd | English High Court | Yes | [2005] EWHC 1631 (QB) | England | Cited in BLC for the premise that an application to set aside an award may not be brought if the applicant has not first exhausted the recourse under s 57 of the 1996 UK Act. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Arbitration and Conciliation Act, 1996 | India |
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
| Indian Contract Act, 1872 | India |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration
- Setting aside
- Breach of contract
- Natural justice
- Public policy
- Consequential loss
- Anticipatory breach
- Separate contracts
- Minimal curial intervention
15.2 Keywords
- arbitration
- setting aside award
- breach of contract
- public policy
- Singapore International Commercial Court
16. Subjects
- Arbitration
- Contract Law
- International Trade
17. Areas of Law
- Arbitration Law
- Contract Law
- International Commercial Arbitration