CEF v CEH: Setting Aside Arbitration Award for Misrepresentation and Breach of Natural Justice
CEF and CEG, the Appellants, appealed against a decision of the High Court of Singapore dismissing their application to set aside an arbitration award in favor of CEH, the Respondent. The dispute arose from a contract to construct a steel-making plant. The Court of Appeal allowed the appeal in part, setting aside the damages order due to a breach of natural justice, but dismissed the appeal on all other grounds. The court found that the Tribunal breached the fair hearing rule in respect of the Damages Order.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal allowed in part.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Appeal to set aside arbitration award. The court allowed the appeal in part, setting aside the damages order due to a breach of natural justice.
1.7 Decision Date
2. Parties and Outcomes
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Judith Prakash | Justice of the Court of Appeal | Yes |
| Steven Chong | Justice of the Court of Appeal | No |
4. Counsels
4. Facts
- CEF and CEG contracted to design and build a steel-making plant for CEH.
- The completed plant never achieved its production target.
- CEH terminated the contract, leading to consolidated arbitration proceedings.
- The arbitration award ordered CEF and CEG to pay CEH F$92.7m, less deductions.
- The award also ordered CEH to transfer the title to the plant to CEF and CEG.
- The Tribunal only permitted the respondent to recover 25% of the damages it had sought under each of the five heads as it found the respondent’s evidence of the quantum of the loss it had suffered under each head to be deficient.
5. Formal Citations
- CEF and another v CEH, Civil Appeal No 153 of 2020, [2022] SGCA 54
6. Timeline
| Date | Event |
|---|---|
| Contract signed between CEF and the Parent for construction of a steel-making plant. | |
| The Parent assigned its rights, title, interest and liabilities under the Contract to CEH. | |
| CEF supplied CEH with additional equipment and services. | |
| CEF and CEH entered into a Service Agreement. | |
| CEF commenced arbitration against CEH. | |
| CEH commenced arbitration against CEF. | |
| The two arbitrations were consolidated into the Arbitration by consent. | |
| The Tribunal was constituted. | |
| The parties and the Tribunal signed the terms of reference. | |
| The Tribunal issued the Award. | |
| CEF applied to the High Court to set aside the Award. | |
| The court permitted both the respondent and the appellants to adduce further evidence. | |
| Hearing in the Court of Appeal. | |
| Judgment reserved. |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court found a breach of natural justice in relation to the Damages Order, setting it aside.
- Category: Procedural
- Sub-Issues:
- Failure to provide a fair hearing
- Inadequate reasoning in the award
- Setting Aside Arbitration Award
- Outcome: The court dismissed the appeal to set aside the Transfer Order and Repayment Order.
- Category: Procedural
- Sub-Issues:
- Award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration
- Composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties
- Misrepresentation
- Outcome: The Tribunal found that the respondent had been induced to enter into the Contract by the appellants’ misrepresentations.
- Category: Substantive
- Sub-Issues:
- Inducement to enter into a contract
- Damages for misrepresentation
8. Remedies Sought
- Setting Aside of Arbitration Award
- Rescission of Contract
- Damages
9. Cause of Actions
- Breach of Contract
- Misrepresentation
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Construction
- Steel Manufacturing
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| CEF and another v CEH | High Court | Yes | [2021] SGHC 114 | Singapore | The High Court's decision that was appealed against in the current judgment. |
| Margulies Brothers Ltd v Dafnis Thomaides & Co (UK) Ltd | UK Court | Yes | [1958] 1 WLR 398 | United Kingdom | Cited regarding the implied term in every arbitration agreement that the resulting award shall be in a form which is capable of being enforced in the same manner as a judgment. |
| Montgomery Jones & Co v Liebenthal & Co | UK Court | Yes | (1898) 78 LT 406 | United Kingdom | Cited for common law principles regarding remitting an award. |
| AKN and another v ALC and others and other appeals | Court of Appeal | Yes | [2016] 1 SLR 966 | Singapore | Cited regarding Art 34(4) of the Model Law and remission of awards. |
| Official Assignee v Chartered Industries of Singapore Ltd | High Court | Yes | [1977–1978] SLR(R) 435 | Singapore | Cited regarding setting aside an award due to ambiguity. |
| BYL and another v BYN | High Court | Yes | [2020] 4 SLR 1 | Singapore | Cited regarding setting aside an award due to incompleteness or unworkability. |
| Western Employers Ins Co v Jefferies & Co | US Court of Appeals for the Ninth Circuit | Yes | 958 F 2d 58 (9th Cir, 1992) | United States | Cited regarding vacating an award due to failure to comply with requirements in the arbitration agreement. |
| Weiner v Commerce Ins Co | Massachusetts Appeals Court | Yes | 78 Mass App Ct 563 (Mass App Ct, 2011) | United States | Cited regarding setting aside an award due to failure to determine the issue of damages. |
| Pacol Ltd v Joint Stock Company Rossakhar | UK Court | Yes | [2000] CLC 315 | United Kingdom | Cited regarding setting aside an award due to dealing with issues beyond the scope of the submission. |
| TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd | High Court | Yes | [2013] 4 SLR 972 | Singapore | Cited regarding issues within the scope of submission to arbitration. |
| Straits Colonies Pte Ltd v SMRT Alpha Pte Ltd | High Court | Yes | [2018] 2 SLR 441 | Singapore | Cited regarding rescission restoring parties to their pre-contractual positions. |
| CAI v CAJ and another | High Court | Yes | [2021] SGHC 21 | Singapore | Cited regarding the Tribunal's authorization for new claims falling outside the limits of the Terms of Reference. |
| Prometheus Marine Pte Ltd v King, Ann Rita and another appeal | Court of Appeal | Yes | [2018] 1 SLR 1 | Singapore | Cited regarding an error of law not being a ground for setting aside an award. |
| AKN and another v ALC and others and other appeals | Court of Appeal | Yes | [2015] 3 SLR 488 | Singapore | Cited regarding the policy of minimal curial intervention in arbitral proceedings. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | High Court | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited regarding an arbitrator basing decisions on matters not submitted or argued before him. |
| Minister for Immigration and Ethnic Affairs v Pochi | Australian Court | Yes | (1980) 31 ALR 666 | Australia | Cited in relation to the no evidence rule. |
| R v Deputy Industrial Injuries Commissioner ex parte Moore | UK Court | Yes | [1965] 1 QB 456 | United Kingdom | Cited in relation to the no evidence rule. |
| BZW and another v BZV | Court of Appeal | Yes | [2022] SGCA 1 | Singapore | Cited regarding a breach of the fair hearing rule arising from the chain of reasoning which the tribunal adopts in its award. |
| Robertson Quay Investment Pte Ltd v Steen Consultants Pte Ltd and another | High Court | Yes | [2008] 2 SLR(R) 623 | Singapore | Cited regarding the flexible approach with regard to the proof of damage. |
| AUF v AUG and other matters | High Court | Yes | [2016] 1 SLR 859 | Singapore | Cited regarding whether a given decision is sufficiently reasoned is a matter of degree and must be considered in the circumstances of each case. |
13. Applicable Rules
| Rule Name |
|---|
| UNCITRAL Model Law on International Commercial Arbitration |
| ICC Rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
| Misrepresentation Act (Cap 390, 1994 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration Award
- Setting Aside
- Breach of Natural Justice
- Misrepresentation
- Transfer Order
- Repayment Order
- Damages Order
- Fair Hearing Rule
- Steel-Making Plant
- Rescission
- Counter-Restitution
15.2 Keywords
- arbitration
- setting aside
- misrepresentation
- natural justice
- contract
- steel plant
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Recourse against award | 95 |
| Arbitration | 95 |
| Setting Aside Arbitral Award | 95 |
| Natural justice | 70 |
| Misrepresentation | 60 |
| Contract Law | 50 |
| International Commercial Arbitration | 40 |
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure