CDM v CDP: Appeal Dismissed on Arbitral Award Regarding Vessel Launch & Payment Instalment
CDM and CDO appealed against a decision regarding an arbitral award in favor of CDP. The Court of Appeal dismissed the appeal, finding that the arbitral tribunal did not exceed its jurisdiction by ruling on the 'second launch' of a vessel and the associated payment instalment. The court also addressed the issue of indemnity costs for unsuccessful applications to set aside arbitral awards, declining to adopt a default position of awarding such costs.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal dismissed
1.3 Case Type
Arbitration
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal dismissed. The court found the arbitral tribunal did not exceed its jurisdiction in ruling on the vessel's second launch and payment.
1.7 Decision Date
2. Parties and Outcomes
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Judith Prakash | Justice of the Court of Appeal | No |
| Steven Chong | Justice of the Court of Appeal | Yes |
| Chao Hick Tin | Senior Judge | No |
4. Counsels
4. Facts
- CDM and CDP entered into a contract for CDP to design, build, launch, equip, commission, test, complete, sell, and deliver a Self-Erected Tender Rig and a Derrick Equipment Set to CDM.
- Addendum No. 2 varied the payment terms such that 10% of the total contract sum would become payable upon launching and receipt of invoice.
- The launching was subject to prior approval by the ship classification society, CDM, and CDP collectively.
- CDP purported to launch the Hull on 20 January 2015, but CDM did not consider the floating as launching.
- A second launch occurred on 3 May 2015.
- CDP demanded payment of the Fourth Instalment, but payment was withheld.
- The Tribunal found that CDM had given its approval on 28 April 2015 for the second launch on 3 May 2015.
5. Formal Citations
- CDM & anor v CDP, Civil Appeal No 53 of 2020, [2021] SGCA 45
6. Timeline
| Date | Event |
|---|---|
| Contract signed between CDM and CDP for the design, build, launch, equip, commission, test, complete, sell, and deliver a Self-Erected Tender Rig and a Derrick Equipment Set | |
| Addendum No. 2 to the contract was entered into | |
| Respondent purported to launch the Hull into the water | |
| Construction and Progress Meeting held | |
| Construction and Progress Meeting held | |
| Construction and Progress Meeting held | |
| The Hull was launched (the “second launch”) | |
| Respondent demanded payment of the Fourth Instalment | |
| Respondent issued a default notice | |
| Notice of Arbitration was filed | |
| Oral hearing took place | |
| Appeal dismissed | |
| Grounds of decision delivered |
7. Legal Issues
- Excess of Jurisdiction
- Outcome: The court held that the Tribunal did not act in excess of its jurisdiction in finding that the second launch had been approved by the parties.
- Category: Jurisdictional
- Related Cases:
- [2007] 1 SLR(R) 597
- Breach of Natural Justice
- Outcome: The court held that there was no breach of natural justice because the appellants had ample opportunity to address the second launch.
- Category: Procedural
- Indemnity Costs
- Outcome: The court declined to adopt a default position of awarding indemnity costs in the event of an unsuccessful application for setting aside an arbitral award.
- Category: Procedural
8. Remedies Sought
- Payment of debt
- Setting aside arbitral award
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA | Court of Appeal | Yes | [2007] 1 SLR(R) 597 | Singapore | Cited for the two-step inquiry on an application to set aside an award under Art 34(2)(a)(iii) of the Model Law for excess of jurisdiction. |
| PT Prima International Development v Kempinski Hotels SA and other appeals | Court of Appeal | Yes | [2012] 4 SLR 98 | Singapore | Cited to define the jurisdiction of the tribunal by reference to the pleadings filed in the arbitration. |
| JVL Agro Industries Ltd v Agritrade International Pte Ltd | High Court | Yes | [2016] 4 SLR 768 | Singapore | Cited to support the proposition that a particular chain of reasoning will be open to a tribunal if it arises from the party’s express pleadings. |
| A v R | Hong Kong Court of First Instance | Yes | [2010] 3 HKC 67 | Hong Kong | Discussed regarding the Hong Kong position on awarding indemnity costs in unsuccessful applications to set aside arbitral awards, but not followed. |
| Pacific China Holdings Ltd (in liq) v Grand Pacific Holdings Ltd (No 2) | N/A | Yes | [2012] 6 HKC 40 | Hong Kong | Discussed regarding the Hong Kong position on awarding indemnity costs in unsuccessful applications to set aside arbitral awards, but not followed. |
| Chimbusco International Petroleum (Singapore) Pte Ltd v Fully Best Trading Ltd | Hong Kong Court of First Instance | Yes | [2016] 1 HKC 149 | Hong Kong | Discussed regarding the Hong Kong position on awarding indemnity costs in unsuccessful applications to set aside arbitral awards, but not followed. |
| BTN and another v BTP and another | High Court | Yes | [2021] SGHC 38 | Singapore | Cited for the principle that the imposition of costs on an indemnity basis is dependent on there being exceptional circumstances. |
| Sui Southern Gas Co Ltd v Habibullah Coastal Power Co (Pte) Ltd | N/A | Yes | [2010] 3 SLR 1 | Singapore | Cited for the principle that Article 34(2)(a)(iii) is not concerned with the substantive correctness of the arbitral tribunal’s decision on a matter that was properly within its jurisdiction. |
| Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd | N/A | Yes | [2015] 1 SLR 114 | Singapore | Cited in the context of the requirement for parties to have the opportunity to present their cases, such a requirement does not shield a party from its own failures or strategic choices not to utilise the opportunity afforded. |
| Terna Bahrain Holding Company WLL v Al Shamsi & ors | English High Court | Yes | [2012] EWHC 3283 (Comm) | England and Wales | Cited for the principle that a tribunal does not act unfairly in deciding a case on a point which was not emphasised by the party raising it, or which is not the subject matter of any great exposition. |
| Airtrust (Hong Kong) Ltd v PH Hydraulics & Engineering Pte Ltd | N/A | Yes | [2016] 5 SLR 103 | Singapore | Cited for the principle that the category of “exceptional circumstances” attracting indemnity costs is not closed. |
| Three Rivers District Council v The Governor and Co of the Bank of England (No 6) | N/A | Yes | [2006] EWHC 816 (Comm) | England and Wales | Cited for the principle that in deciding whether to order indemnity costs, the Court should have regard to all the circumstances of the case, and whether a party has behaved unreasonably. |
| Raffles Town Club Pte Ltd v Lim Eng Hock Peter and others (Tung Yu-Lien Margaret and others, third parties) | N/A | Yes | [2011] 1 SLR 582 | Singapore | Cited for the principle that costs on an indemnity basis should only be ordered in a special case or where there are exceptional circumstances. |
| Tecnomar & Associates Pte Ltd v SBM Offshore NV | Court of Appeal | Yes | [2021] SGCA 36 | Singapore | Cited as an example of a case which fell within such an exceptional category where there had been “deliberate material non-disclosure”. |
| Gao Haiyan and another v Keeneye Holdings Ltd and another | Hong Kong Court of Appeal | Yes | [2012] HKCU 226 | Hong Kong | Cited as approving the reasons set out by Reyes J in A v R. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitral award
- Second launch
- Fourth Instalment
- Launching condition
- Indemnity costs
- Excess of jurisdiction
- Breach of natural justice
15.2 Keywords
- arbitration
- award
- setting aside
- jurisdiction
- costs
- indemnity
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Arbitration | 90 |
| Recourse against award | 90 |
| Setting aside | 90 |
| Indemnity costs | 80 |
| Civil Procedure | 80 |
| Costs | 70 |
| Breach of Contract | 30 |
| Commercial Law | 30 |
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure