CZQ v CZS: Enforceability of Arbitration Agreement & Condition Precedent

In CZQ and another v CZS, the Singapore International Commercial Court dismissed an application by CZS, the respondents in an arbitration, challenging the arbitral tribunal's jurisdiction. The court, comprising Andre Maniam J, Sir Henry Bernard Eder IJ, and Zhang Yongjian IJ, held on October 27, 2023, that the amicable settlement procedure in Clause 20.5 of the construction contract was not a condition precedent to commencing arbitration under Clause 20.6. The court agreed with the tribunal's ruling, finding no clear contractual language establishing such a condition precedent. The claim was regarding a construction contract.

1. Case Overview

1.1 Court

Singapore International Commercial Court

1.2 Outcome

Respondents' application dismissed.

1.3 Case Type

Arbitration

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court affirms arbitration tribunal's jurisdiction, holding that amicable settlement was not a condition precedent to arbitration.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
CZQApplicantOtherApplication DismissedLost
CZSRespondentOtherApplication GrantedWon

3. Judges

Judge NameTitleDelivered Judgment
Andre ManiamJudge of the High CourtYes
Sir Henry Bernard EderInternational JudgeNo
Zhang YongjianInternational JudgeNo

4. Counsels

Counsel NameOrganization
David Isidore TanRajah & Tann Singapore LLP
Poon Kin Mun KelvinRajah & Tann Singapore LLP
Timothy James Chong Wen AnRajah & Tann Singapore LLP
Koh En Da MatthewRajah & Tann Singapore LLP
Thio Shen YiTSMP Law Corporation
Thara Rubini GopalanTSMP Law Corporation
Nikita GargTSMP Law Corporation

4. Facts

  1. The respondents challenged the arbitral tribunal's jurisdiction based on non-compliance with the amicable settlement procedure.
  2. The contract incorporated the FIDIC Conditions of Contract for Plant and Design Build (First Edition, 1999).
  3. Clause 20 of the contract addressed the resolution of disputes.
  4. Sub-Clause 20.5 outlined an amicable settlement procedure.
  5. Sub-Clause 20.6 provided for arbitration.
  6. The tribunal ruled that the amicable settlement procedure was not a condition precedent to arbitration.

5. Formal Citations

  1. CZQ and another v CZS, Originating Application No 4 of 2023, [2023] SGHC 16

6. Timeline

DateEvent
Claimant commenced two arbitrations.
Tribunal was constituted.
Hearing on jurisdiction took place.
Tribunal issued the Ruling.
Hearing date.
Judgment date.

7. Legal Issues

  1. Condition Precedent to Arbitration
    • Outcome: The court held that compliance with Sub-Clause 20.5 was not a condition precedent to the commencement of arbitration under Sub-Clause 20.6.
    • Category: Substantive
  2. Jurisdiction of Arbitral Tribunal
    • Outcome: The court upheld the arbitral tribunal's jurisdiction.
    • Category: Jurisdictional

8. Remedies Sought

  1. Declaration that the arbitral tribunal had no jurisdiction

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Commercial Litigation
  • Construction Law

11. Industries

  • Construction

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Halifax Financial Services Limited v Intuitive Systems LimitedNot specifiedYes[1999] 1 All ER (Comm) 303England and WalesCited as an authority for the principle that a condition precedent to the commencement of arbitration should be expressed in clear words.
International Research Corp PLC v Lufthansa Systems Asia Pacific Pte LtdHigh CourtYes[2013] 1 SLR 973SingaporeCited for the principle that clear words are necessary to create a condition precedent to the commencement of arbitration.
International Research Corp PLC v Lufthansa Systems Asia Pacific Pte LtdCourt of AppealYes[2014] 1 SLR 130SingaporeCited for the principle that clear words are necessary to create a condition precedent to the commencement of arbitration.
Emirates Trading Agency LLC v Prime Mineral Exports Private LtdNot specifiedYes[2014] EWHC 2104England and WalesCited as an authority for the principle that a condition precedent to the commencement of arbitration should be expressed in clear words.
Ohpen Operations UK Ltd v Invesco Fund Managers LtdNot specifiedYes[2019] EWHC 2246 (TCC)England and WalesCited as an authority for the principle that a condition precedent to the commencement of arbitration should be expressed in clear words.
Insigma Technology Co Ltd v Alstom Technology LtdHigh CourtYes[2009] 1 SLR(R) 23SingaporeCited for the principle that a party is entitled to raise an objection to jurisdiction before the judge that it had not raised and argued before the arbitrator.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act 1994Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Condition Precedent
  • Amicable Settlement
  • Jurisdiction
  • FIDIC Conditions
  • Construction Contract
  • Sub-Clause 20.5
  • Sub-Clause 20.6

15.2 Keywords

  • Arbitration
  • Condition Precedent
  • Construction Contract
  • Singapore
  • Jurisdiction

17. Areas of Law

Area NameRelevance Score
Arbitration95
International Commercial Arbitration90
Contract Law85
Condition Precedent80
Contractual Interpretation75
Jurisdiction70
Commercial Disputes65
Breach of Contract60
Construction Law55

16. Subjects

  • Arbitration
  • Contract Law
  • Construction Disputes