DBL v DBM: Application to Set Aside Arbitration Award for Breach of Natural Justice Dismissed

In DBL v DBM, the Singapore High Court dismissed DBL's application to set aside an arbitration award in favor of DBM. DBL argued a breach of natural justice, claiming it lacked opportunity to respond to DBM's demonstration during closing arguments and that the tribunal failed to consider its defenses. Hri Kumar Nair J found no grounds to set aside the award, leading DBL to file an appeal.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application Dismissed

1.3 Case Type

Arbitration

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court dismisses DBL's application to set aside an arbitration award, finding no breach of natural justice.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
DBLClaimantCorporationApplication DismissedLost
DBMDefendantCorporationAward UpheldWon

3. Judges

Judge NameTitleDelivered Judgment
Hri Kumar NairJudge of the High CourtYes

4. Counsels

Counsel NameOrganization
Prakash PillaiCLASIS LLC
Koh JunxiangCLASIS LLC
Charis Toh Si YingCLASIS LLC
Bazul Ashhab bin Abdul KaderOon & Bazul LLP
Prakaash s/o Paniar SilvamOon & Bazul LLP
Caleb Tan Jia ChweenOon & Bazul LLP
Chan Cong Yen LionelChen Congren
Ng Guang YiOon & Bazul LLP

4. Facts

  1. DBL agreed to sell steel slabs to DBM under a written sales contract.
  2. The Sales Contract specified that the goods were to be loaded at any port from KSA.
  3. The goods were loaded on the M/V [FP].
  4. The Bill of Lading stated the goods were loaded at Dammam Port, KSA on 19 September 2013.
  5. DBM alleged the goods were loaded in Iran, breaching the Sales Contract.
  6. DBL provided DBM with an Indemnity Bond.
  7. DBM sought damages for breach of contract and claimed the New Outstanding Amount.

5. Formal Citations

  1. DBL v DBM, Originating Application No 79 of 2023, [2023] SGHC 267

6. Timeline

DateEvent
Goods loaded on the M/V [FP] at Dammam Port, Kingdom of Saudi Arabia
[DBL] invoiced [DBM] for US$9,922,152.97
[FD] Bank suspected goods were loaded in Bandar Abbas, Iran, not Dammam Port, KSA
[DBL] provided [DBM] with an Indemnity Bond
[DBM] cancelled the Sales Contract and requested reimbursement
[DBL] agreed to remit US$500,000 to [DBM]
[FD] Bank debited monies from [DBM]’s bank account
[DBM] claimed [DBL] owed US$9,422,177.97
[DBM] and [DKL] finalized nickel purchase agreement
[DBM] and [DKL] finalized nickel purchase agreement
[GBM] Group requested revision of agreement for [DBL] to assume seller role
[DBM] and [DBL] executed Addendum to Nickel Purchase Agreement
[DBM] requested [DBL] confirm New Outstanding Amount
[DBL] confirmed it owed [DBM] US$4,610,707.65
[DBM] requested [DBL] confirm New Outstanding Amount
[DBM] commenced arbitration proceedings against [DBL]
Arbitration Hearing held
Arbitration Hearing held
Award issued
Award corrected and delivered to parties
High Court dismissed DBL's application
Grounds of Decision issued

7. Legal Issues

  1. Breach of Natural Justice
    • Outcome: The court held that there was no breach of natural justice that warranted setting aside the award.
    • Category: Procedural
    • Sub-Issues:
      • Improper introduction of evidence
      • Failure to provide reasonable opportunity to respond
      • Failure to consider pleaded defenses
  2. Enforceability of Bond
    • Outcome: The court did not rule on the enforceability of the bond, finding it unnecessary to the outcome.
    • Category: Substantive
  3. Limitation Period
    • Outcome: The court found that the acknowledgments of debt gave rise to new causes of action and interrupted any time bar.
    • Category: Substantive
    • Sub-Issues:
      • Extension of limitation period
      • Effective acknowledgement of debt

8. Remedies Sought

  1. Setting aside of arbitration award
  2. Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Arbitration
  • International Arbitration
  • Commercial Litigation

11. Industries

  • Shipping
  • Commodities Trading

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte LtdCourt of AppealYes[2007] 3 SLR(R) 86SingaporeEndorsed principles of natural justice, including the right to a fair hearing and opportunity to present a case.
Gas & Fuel Corporation of Victoria v Wood Hall Ltd & Leonard Pipeline Contractors LtdSupreme Court of VictoriaYes[1978] VR 385AustraliaOutlined the two pillars of natural justice: impartiality and the opportunity to be heard.
John Holland Pty Ltd v Toyo Engineering Corp (Japan)High CourtYes[2001] 1 SLR(R) 443SingaporeEstablished the four requirements for challenging an arbitration award based on breach of natural justice.
China Machine New Energy Corp v Jaguar Energy Guatemala LLC and anotherHigh CourtYes[2020] 1 SLR 695SingaporeReiterated the high threshold for finding a breach of natural justice and cautioned against using fairness as a license to appeal.
JVL Agro Industries Ltd v Agritrade International Pte LtdHigh CourtYes[2016] 4 SLR 768SingaporeDistilled the principle of opportunity to be heard into positive and responsive aspects.
AKN and another v ALC and others and other appealsCourt of AppealYes[2015] 3 SLR 488SingaporeAffirmed the right to be heard on all pleaded issues and the high evidential threshold for finding failure to apply mind.
Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte LtdHigh CourtYes[2010] SGHC 80SingaporeStated that disregarding parties’ submissions on pleaded issues constitutes a breach of natural justice.
Pacific Recreation Pte Ltd v SY Technology IncHigh CourtYes[2008] 2 SLR(R) 491SingaporeStated that disregarding parties’ submissions on pleaded issues constitutes a breach of natural justice.
L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appealCourt of AppealYes[2013] 1 SLR 125SingaporeClarified that breach of natural justice inquiry is whether the breach could reasonably have made a difference.
SEF Construction Pte Ltd v Skoy Connected Pte LtdHigh CourtYes[2010] 1 SLR 733SingaporeHeld that natural justice requires parties to be heard, not necessarily given responses on all submissions.
TMM Division Maritima SA de CV v Pacific Richfield Marine Pte LtdHigh CourtYes[2013] 4 SLR 972SingaporeHeld that failure to comprehend submissions or erroneous comprehension falls short of breach of natural justice.
BLB and another v BLC and othersHigh CourtYes[2013] 4 SLR 1169SingaporeErrors of fact are not a proper subject of review.
iVenture Card Ltd and others v Big Bus Singapore City Sightseeing Pte Ltd and othersHigh CourtYes[2022] 1 SLR 302SingaporeTribunal can take judicial notice of uncontroversial facts.
CDI v CDJHigh CourtYes[2020] 5 SLR 484SingaporeCourt should not carry out a hypercritical analysis of the Tribunal’s decision.
BRS v BRQ and another and another appealCourt of AppealYes[2021] 1 SLR 390SingaporeTribunal failed to consider evidence and submissions in respect of an important issue in the dispute.
AQU v AQVHigh CourtYes[2015] SGHC 26SingaporeThere must be some indication that the tribunal had considered the critical issues and arguments.
Phoenixfin Pte Ltd and others v Convexity LtdCourt of AppealYes[2022] 2 SLR 23SingaporeIn arbitration proceedings generally, a more generous approach is taken towards pleadings.
World Trade Corporation v C Czarnikow Sugar LtdCommercial CourtYes[2005] 1 Lloyd’s Rep 422England and WalesArbitrators are under no duty to explain why they attach more weight to some evidence than to other evidence.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act 1994Singapore
Limitation Act 1980 (c 58) (UK)United Kingdom
Law of Property (Miscellaneous Provisions) Act 1989 (c 34) (UK)United Kingdom

15. Key Terms and Keywords

15.1 Key Terms

  • Natural justice
  • Arbitration award
  • Sales contract
  • Indemnity bond
  • Limitation period
  • New Outstanding Amount
  • Searoutes Demonstration
  • Hearing Protocol
  • Vessel Finder Report

15.2 Keywords

  • Arbitration
  • Breach of natural justice
  • Setting aside award
  • Contract
  • Shipping
  • Singapore

17. Areas of Law

Area NameRelevance Score
Recourse against award90
Natural justice90
Setting aside85
Breach of Contract80
Arbitration75
Contract Law70
Contractual terms60
International Commercial Arbitration50
Evidence40
Hearing Protocol30

16. Subjects

  • Arbitration
  • Contract Law
  • Civil Procedure