BZV v BZW: Setting Aside Arbitration Award for Breach of Natural Justice

In BZV v BZW, the General Division of the High Court of Singapore heard an application by BZV to set aside an arbitration award that dismissed its claims against BZW for delay in delivering a vessel and breach of contract regarding generator specifications. The court, presided over by Justice Vinodh Coomaraswamy, allowed BZV's application, setting aside the award to the extent it dismissed BZV's claims, finding a breach of natural justice in the tribunal's reasoning.

1. Case Overview

1.1 Court

GENERAL DIVISION OF THE HIGH court of the republic of singapore

1.2 Outcome

Application allowed and the award set aside in so far as it dismisses the plaintiff's claim.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court sets aside arbitration award dismissing BZV's claims against BZW for breach of contract due to a breach of natural justice.

1.7 Decision Date

4 April 2021

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
BZW	Defendant	Corporation	Claim Dismissed	Lost	Kenny Yap of Allen & Gledhill LLP Erik Widjaja of Allen & Gledhill LLP Eugene Lee of Allen & Gledhill LLP
BZX	Defendant	Corporation	Claim Dismissed	Lost	Kenny Yap of Allen & Gledhill LLP Erik Widjaja of Allen & Gledhill LLP Eugene Lee of Allen & Gledhill LLP
BZV	Plaintiff	Corporation	Appeal Allowed	Won	Leonard Chia of Asia Ascent Law Corporation Priyanka Shinde Sayaji of Asia Ascent Law Corporation Eli Peh of Asia Ascent Law Corporation

3. Judges

Judge Name	Title	Delivered Judgment
Vinodh Coomaraswamy	Judge	Yes

4. Counsels

Counsel Name	Organization
Kenny Yap	Allen & Gledhill LLP
Erik Widjaja	Allen & Gledhill LLP
Eugene Lee	Allen & Gledhill LLP
Leonard Chia	Asia Ascent Law Corporation
Priyanka Shinde Sayaji	Asia Ascent Law Corporation
Eli Peh	Asia Ascent Law Corporation

4. Facts

Plaintiff and defendants were claimant and respondents in an arbitration.
The arbitration arose from a shipbuilding contract between the plaintiff as the vessel’s buyer and the defendants as the vessel’s builders.
The plaintiff advanced two claims against the defendants: delay in delivering the vessel and breach of contract by delivering the vessel with generators which failed to meet contractual specifications.
The defendants denied the plaintiff’s claims and brought a counterclaim.
The tribunal dismissed the plaintiff’s claims as well as the defendants’ counterclaim.
The plaintiff applied to set aside the award, save only for that part of the award which has dismissed the defendants’ counterclaim.
The court allowed the plaintiff’s application and set aside the award in so far as it dismisses the plaintiff’s claim.

5. Formal Citations

BZV v BZW, Originating Summons No 488 of 2019, [2021] SGHC 60

6. Timeline

Date	Event
2012-11-01	Contract signed
2014-05-31	Original delivery date of vessel
2014-12-01	Meetings between End-Buyer, Plaintiff, and Defendants
2014-12-01	ABS conducted tests on the vessel
2014-12-31	Defendants served written notice of completion
2015-01-01	Meetings between End-Buyer, Plaintiff, and Defendants
2015-02-01	Second supplemental agreement (SA2) entered
2015-04-01	Third supplemental agreement entered
2015-04-30	Extended delivery date per SA2
2015-06-30	Cancelling date per SA2
2015-07-01	Plaintiff put defendants on notice for failure to deliver vessel
2015-07-02	ABS issued interim class certificate for the vessel
2015-07-03	ModuSpec carried out inspection of the vessel
2015-09-01	ABS issued interim class certificate for the vessel
2015-09-12	Fourth supplemental agreement (SA4) entered
2015-09-22	Defendants delivered the vessel to the plaintiff
2015-10-01	Plaintiff commenced arbitration against the defendants
2016-01-01	Tribunal constituted
2016-03-01	Plaintiff filed statement of claim in the arbitration
2016-04-01	Defendants filed statement of defence and counterclaim
2017-05-01	Evidential hearing in the arbitration took place
2018-10-25	Tribunal delivered its award
2018-10-30	SIAC forwarded the award to the parties
2018-11-27	Plaintiff requested the tribunal to correct the award
2019-01-16	Tribunal disposed of the plaintiff’s request by issuing an addendum to the award
2019-02-15	Plaintiff requested the tribunal to interpret the award
2019-04-09	Tribunal rejected the plaintiff’s further request
2019-04-15	Plaintiff filed originating summons
2019-04-30	Plaintiff filed the affidavit in support
2019-05-24	Plaintiff effected service on the defendants
2021-04-05	Judgment issued

7. Legal Issues

Breach of Natural Justice
- Outcome: The court found that the tribunal breached the fair hearing rule, a breach of natural justice.
- Category: Substantive
- Sub-Issues:
  - Failure to apply mind to essential issues
  - Defective chain of reasoning
Setting Aside Arbitration Award
- Outcome: The court allowed the application to set aside the arbitration award in part.
- Category: Procedural

8. Remedies Sought

Setting aside of arbitration award

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation
Arbitration
Construction Law

11. Industries

Construction
Shipping

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
ABC Co v XYZ Co Ltd	High Court	Yes	[2003] 3 SLR(R) 546	Singapore	Cited to show that the Model Law leaves it to each Model Law jurisdiction to prescribe the procedure for “making” an “application” to set aside an award.
John Holland Pty Ltd v Toyo Engineering Corp (Japan)	High Court	Yes	[2001] 1 SLR(R) 443	Singapore	Cited for the elements a plaintiff must establish to succeed in setting aside an award under s 24(b) of the Act.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd	Court of Appeal	Yes	[2007] 3 SLR(R) 86	Singapore	Cited for the fair hearing rule requiring each party to be given adequate notice of the case it must meet and a fair opportunity to be heard.
TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd	Court of Appeal	Yes	[2013] 4 SLR 972	Singapore	Cited for principles of law to be applied when determining the plaintiff's application.
BLC v BLB	High Court	Yes	[2014] 4 SLR 79	Singapore	Cited for the principle that if a fair reading of the award shows that the tribunal did apply its mind to the essential issues but failed to comprehend the submissions or comprehended them erroneously, and thereby came to a decision which may fall to be characterised as inexplicable, that will be simply an error of fact or law and the award will not be set aside.
ASG v ASH	High Court	Yes	[2016] 5 SLR 54	Singapore	Cited for the principle that the fact that an award fails to address one of the parties’ arguments expressly does not, in itself, mean that the tribunal failed to apply its mind to that argument.
AKN v ALC	High Court	Yes	[2015] 3 SLR 488	Singapore	Cited for the principle that an award will not be set aside on the ground that the tribunal failed to apply its mind to an essential issue arising from the parties’ arguments unless the failure is a clear and virtually inescapable inference from the award.
JVL Agro Industries Ltd v Agritrade International Pte Ltd	Court of Appeal	Yes	[2016] 4 SLR 768	Singapore	Cited for the principle that to comply with the fair hearing rule, the tribunal’s chain of reasoning must be: (i) one which the parties had reasonable notice that the tribunal could adopt; and (ii) one which has a sufficient nexus to the parties’ arguments.
BXS v BXT	High Court	Yes	[2019] 4 SLR 390	Singapore	Cited to show that Art 5 of the Model Law is so weighty as to exclude the court’s general substantive power in paragraph 7 of the First Schedule of the Supreme Court of Judicature Act to extend the three-month period in Art 34(3) of the Model Law.
Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board	House of Lords	Yes	[1973] 1 WLR 601	England and Wales	Cited for the principle that an act of prevention may be quite legitimate conduct and does not have to amount to a breach of contract.
LW Infrastructure Ltd v Lim Chin San Contractors Pte Ltd	High Court	Yes	[2013] 1 SLR 125	Singapore	Cited for the principle that a breach of natural justice causes a party to suffer actual or real prejudice if complying with the rules of natural justice could reasonably have made a difference to the outcome of the arbitration.
AKN v ALC	Court of Appeal	Yes	[2016] 1 SLR 966	Singapore	Cited for the principle that the principle of limited curial intervention militates against its exercise rather than in favour of it.
Secretary of State for the Home Department v Raytheon Systems Ltd	Commercial Court	Yes	[2015] 1 Lloyd’s Rep 495	England and Wales	Cited for the principle that there is no allegation of apparent bias, let alone a finding of actual bias.
Lovell Partnerships (Northern) Ltd v AW Construction plc	Technology and Construction Court	Yes	(1997) 81 BLR 83	England and Wales	Cited for the principle that there is no allegation of apparent bias, let alone a finding of actual bias.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

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

15. Key Terms and Keywords

15.1 Key Terms

Arbitration
Setting aside
Breach of natural justice
Shipbuilding contract
Delay claim
IP44 claim
Model Law
International Arbitration Act
Fair hearing rule
Prevention principle

15.2 Keywords

arbitration
setting aside
breach of contract
natural justice
shipbuilding

17. Areas of Law

Area Name	Relevance Score
Setting Aside Arbitral Award	95
Arbitration	95
International Commercial Arbitration	90
Contract Law	80
Shipbuilding Contracts	75
Breach of Contract	70
Construction	50
Building and Construction Contracts	50
Shipping Law	40

16. Subjects

Arbitration
Contract Law
Construction Dispute