Sai Wan Shipping v Landmark Line: Setting Aside Arbitration Award for Breach of Natural Justice
In Sai Wan Shipping Ltd v Landmark Line Co, Ltd, the General Division of the High Court of Singapore heard an application to set aside an arbitration award. The plaintiff, Sai Wan Shipping Ltd, challenged the award, arguing a breach of natural justice due to the arbitrator's peremptory order. Philip Jeyaretnam J granted the order setting aside the entire second award, finding that the arbitrator breached the fair hearing rule and the equal treatment rule, leading to prejudice against the plaintiff.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Order granted setting aside the entire second award, pursuant to s 24(b) of the IAA and Art 34(2)(a)(ii) of the Model Law.
1.3 Case Type
Arbitration
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court sets aside an arbitration award in Sai Wan Shipping v Landmark Line due to a breach of natural justice, citing unfair peremptory order.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Sai Wan Shipping Ltd | Plaintiff | Corporation | Appeal Allowed | Won | Ong Sing Huat, Kok Jia An Alwyn, Chia Kia Boon |
| Landmark Line Co, Ltd | Defendant | Corporation | Appeal Dismissed | Lost | Bazul Ashhab, Chan Cong Yen Lionel (Chen Congren), Chang Guo En Nicholas Winarta Chandra |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Philip Jeyaretnam | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Ong Sing Huat | Robert Wang & Woo LLP |
| Kok Jia An Alwyn | Robert Wang & Woo LLP |
| Chia Kia Boon | Robert Wang & Woo LLP |
| Bazul Ashhab | Oon & Bazul LLP |
| Chan Cong Yen Lionel (Chen Congren) | Oon & Bazul LLP |
| Chang Guo En Nicholas Winarta Chandra | Oon & Bazul LLP |
4. Facts
- The plaintiff, Sai Wan Shipping Ltd, chartered a vessel owned by the defendant, Landmark Line Co, Ltd.
- A dispute arose primarily over unpaid hire and periods of off-hire.
- The arbitration clause in the charterparty stipulated arbitration in Singapore with each party appointing an arbitrator.
- The Owner appointed Mr. Alan Oakley as the sole arbitrator after the Charterer failed to nominate one.
- The arbitrator issued a peremptory order barring the Charterer from advancing any defence or counterclaim if they failed to meet a specified deadline.
- The Charterer's defense submissions were submitted slightly late due to internet connectivity issues.
- The arbitrator excluded the Charterer's defense submissions and proceeded to make an award in favor of the Owner.
5. Formal Citations
- Sai Wan Shipping Ltd v Landmark Line Co, Ltd, Originating Summons No 869 of 2021, [2022] SGHC 8
6. Timeline
| Date | Event |
|---|---|
| Partial/Final Arbitration Award issued | |
| Owner served claim submissions | |
| Arbitrator ordered Charterer to provide defence by 31 March 2021 | |
| Brown Marine asked the tribunal to review the exchange and make an order | |
| Arbitrator issued a final and peremptory order | |
| Charterer served its defence submissions | |
| Brown Marine responded that the Charterer’s defence submissions should not be admitted into evidence | |
| Arbitrator invited the Owner to put in further evidence and submissions | |
| Fichte renewed its protest and objection | |
| Second/Final Arbitration Award issued | |
| Affidavit of Tanjore Sunilkumar Srinivas filed | |
| Plaintiff’s and Defendant's Written Submissions dated | |
| Hearing date | |
| Hearing date | |
| Defendant’s Further Written Submissions dated | |
| Letters to court dated from Robert Wang & Woo LLP | |
| Letter to court dated from Oon & Bazul LLP | |
| Judgment reserved |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court found that the arbitrator breached the principles of natural justice by failing to give the Charterer a fair opportunity to present its case and by treating the parties unequally.
- Category: Substantive
- Sub-Issues:
- Failure to provide adequate notice
- Failure to provide opportunity to be heard
- Unequal treatment of parties
- Powers of Arbitrator
- Outcome: The court clarified the powers of an arbitrator in a Singapore-seated ad hoc arbitration, emphasizing the application of the UNCITRAL Model Law and the need to consult parties on procedural matters.
- Category: Procedural
- Sub-Issues:
- Scope of peremptory orders
- Enforcement of peremptory orders
- Application of Model Law
8. Remedies Sought
- Setting Aside of Arbitration Award
9. Cause of Actions
- Breach of Contract
- Setting Aside of Arbitration Award
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | Court of Appeal | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the analytical framework to set aside an arbitration award on the basis of a breach of natural justice. |
| Wellmix Organics (International) Pte Ltd v Lau Yu Man | N/A | Yes | [2006] 2 SLR(R) 117 | Singapore | Cited for the principle that courts will enforce draconian orders only if the party breaches the order intentionally and contumeliously or contumaciously. |
| Yee Hong Pte Ltd v Powen Electrical Engineering Pte Ltd | N/A | Yes | [2005] 3 SLR(R) 512 | Singapore | Cited to support the arbitrator's power to make a peremptory order. |
| China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another | Court of Appeal | Yes | [2020] 1 SLR 695 | Singapore | Cited for propositions on the high threshold for finding a breach of natural justice and the limitations on the right to be heard. |
| CBS v CBP | Court of Appeal | Yes | [2021] 1 SLR 935 | Singapore | Cited for the approach a court should take to procedural decisions of a tribunal. |
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
- Peremptory order
- Natural justice
- Arbitration award
- UNCITRAL Model Law
- Fair hearing rule
- Equal treatment rule
- Sufficient cause
- Defence submissions
- Off-hire
- Ad hoc arbitration
15.2 Keywords
- arbitration
- natural justice
- peremptory order
- Singapore
- shipping
- model law
- award
- charterparty
16. Subjects
- Arbitration
- Shipping Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- Civil Procedure
- Breach of Natural Justice