CAJ v CAI: Setting Aside Arbitral Award for Breach of Natural Justice and Excess of Jurisdiction

CAJ and CAK appealed against the High Court's decision to set aside a portion of an arbitral award in favor of CAI. The Court of Appeal dismissed the appeals, finding that the arbitral tribunal exceeded its jurisdiction and breached natural justice by considering an extension of time defense (EOT Defence) that was not raised in the parties' pleadings or the Terms of Reference. The court upheld the High Court's order that liquidated damages be calculated based on a 99-day delay.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeals Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal against setting aside an arbitral award. The court found the tribunal exceeded jurisdiction and breached natural justice by considering an unpleaded defense.

1.7 Decision Date

10 November 2021

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
CAJ	Appellant, Defendant	Corporation	Appeal Dismissed	Lost	Thio Shen Yi of TSMP Law Corporation Uday Duggal of TSMP Law Corporation Neo Zhi Wei Eugene of TSMP Law Corporation
CAK	Appellant, Defendant	Corporation	Appeal Dismissed	Lost	Thio Shen Yi of TSMP Law Corporation Uday Duggal of TSMP Law Corporation Neo Zhi Wei Eugene of TSMP Law Corporation
CAI	Respondent, Plaintiff	Corporation	Appeal Upheld	Won	Cavinder Bull of Drew & Napier LLC Nicholas Jeyaraj s/o Narayanan of Nicholas & Tan Partnership LLP Lin Shumin of Drew & Napier LLC Amadeus Huang Zhen of Drew & Napier LLC

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Phang Boon Leong	Justice of the Court of Appeal	Yes
Judith Prakash	Justice of the Court of Appeal	Yes
Steven Chong	Justice of the Court of Appeal	Yes

4. Counsels

Counsel Name	Organization
Thio Shen Yi	TSMP Law Corporation
Uday Duggal	TSMP Law Corporation
Neo Zhi Wei Eugene	TSMP Law Corporation
Cavinder Bull	Drew & Napier LLC
Nicholas Jeyaraj s/o Narayanan	Nicholas & Tan Partnership LLP
Lin Shumin	Drew & Napier LLC
Amadeus Huang Zhen	Drew & Napier LLC

4. Facts

The dispute arose from two contracts for the construction of a polycrystalline silicon plant.
The respondent's subsidiary commenced arbitration against the appellants, alleging a 144-day delay in mechanical completion.
The appellants' defense was that mechanical completion was achieved on time and that any delay was a result of the Admitted Instruction.
The appellants raised the EOT Defence for the first time in their written closing submissions.
The tribunal accepted the EOT Defence and extended the time for mechanical completion by 25 days.
The respondent applied to the High Court to set aside the award, arguing that the tribunal exceeded its jurisdiction and breached natural justice.

5. Formal Citations

CAJ and another v CAI and another, Civil Appeals Nos 11 and 43 of 2021, [2021] SGCA 102

6. Timeline

Date	Event
2019-01-01	Originating Summons No 1103 of 2019 filed
2021-09-22	Appeals heard and dismissed
2021-11-11	Grounds of decision delivered

7. Legal Issues

Breach of Natural Justice
- Outcome: The court found that the tribunal breached natural justice by considering the EOT Defence without giving the respondent a fair opportunity to respond and by relying on its own experience without allowing the parties to address it.
- Category: Procedural
- Sub-Issues:
  - Failure to provide a fair opportunity to respond to a new defense
  - Reliance on unarticulated experience without providing an opportunity to address it
Excess of Jurisdiction
- Outcome: The court found that the tribunal exceeded its jurisdiction by ruling on the EOT Defence, which was not raised in the pleadings, Terms of Reference, or List of Issues.
- Category: Jurisdictional
- Sub-Issues:
  - Adjudicating on an unpleaded defense
  - Exceeding the scope of the submission to arbitration

8. Remedies Sought

Setting aside of arbitral award
Liquidated Damages

9. Cause of Actions

Breach of Contract

10. Practice Areas

Arbitration
Commercial Litigation
Construction Law

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another	Court of Appeal	Yes	[2020] 1 SLR 695	Singapore	Cited for the principle of 'hedging' in arbitration proceedings.
CAI v CAJ and another	High Court	Yes	[2021] SGHC 21	Singapore	The High Court decision under appeal, where the judge found a breach of natural justice and excess of jurisdiction.
BSM v BSN and another matter	High Court	Yes	[2019] SGHC 185	Singapore	Cited as an example where the court remitted the issue of wasted costs to the tribunal.
AKN and another v ALC and others and other appeals	Court of Appeal	Yes	[2015] 3 SLR 488	Singapore	Cited regarding the scope of submission to arbitration and recharacterization of claims.
CEF and another v CEH	High Court	Yes	[2021] SGHC 114	Singapore	Cited regarding the scope of submission to arbitration.
CDM and another v CDP	Court of Appeal	Yes	[2021] 2 SLR 235	Singapore	Cited regarding the scope of a tribunal's jurisdiction and the relevance of pleadings.
PT Prima International Development v Kempinski Hotels SA and other appeals	Court of Appeal	Yes	[2012] 4 SLR 98	Singapore	Cited for principles regarding the role of pleadings in defining the jurisdiction of the tribunal.
CRW Joint Operation v PT Perusahaan Gas Negara (Persero) TBK	Court of Appeal	Yes	[2011] 4 SLR 305	Singapore	Cited for the principle that mere errors of fact or law are not sufficient to warrant setting aside an award.
GD Midea Air Conditioning Equipment Co Ltd v Tornado Consumer Goods Ltd and another matter	High Court	Yes	[2018] 4 SLR 271	Singapore	Cited as an example of consequential orders made after setting aside a tribunal's finding.
Convexity Ltd v Phoenixfin Pte Ltd and others	High Court	Yes	[2021] SGHC 88	Singapore	Cited as an example of consequential orders made after setting aside a tribunal's finding.
BZV v BZW and another	High Court	Yes	[2021] SGHC 60	Singapore	Cited as an example of consequential orders made after setting aside a tribunal's finding.
JVL Agro Industries Ltd v Agritrade International Pte Ltd	High Court	Yes	[2016] 4 SLR 768	Singapore	Cited as an example where the court remitted the award to the tribunal to consider whether to receive further evidence or submissions.
Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and another	Court of Appeal	Yes	[2021] SGCA 94	Singapore	Cited regarding the role of pleadings in arbitration proceedings.
CBX and another v CBZ and others	Court of Appeal	Yes	[2020] 5 SLR 184	Singapore	Cited regarding the role of pleadings in arbitration proceedings.

13. Applicable Rules

Rule Name
Article 23(4) of the ICC Rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Extension of Time (EOT) Defence
Mechanical Completion
Liquidated Damages
Breach of Natural Justice
Excess of Jurisdiction
Admitted Instruction
Terms of Reference
Pleadings
Hedging
ICC Rules

15.2 Keywords

arbitration
construction
breach of natural justice
excess of jurisdiction
extension of time
pleadings
Singapore

17. Areas of Law

Area Name	Relevance Score
Arbitration	95
Recourse against award	95
Jurisdiction	70
Natural justice	70
Construction Law	30
Breach of Contract	20
Contract Law	20

16. Subjects

Arbitration
Construction Dispute
Contract Law
Civil Procedure