DBL v DBM: Appeal against setting aside arbitral award for breach of natural justice in steel trading dispute
DBL appealed against the High Court's decision in DBL v DBM [2023] SGHC 267, which dismissed DBL's application to set aside an arbitral award. The dispute arose from a steel trading contract between DBL and DBM. DBL argued that the arbitral tribunal breached natural justice by considering a demonstration by DBM's counsel and failing to consider two of DBL's defenses. The Court of Appeal dismissed the appeal on 28 March 2024, finding no breach of natural justice that prejudiced DBL.
1. Case Overview
1.1 Court
Court of Appeal of the Republic of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Arbitration
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Appeal against High Court's decision to set aside an arbitral award. The Court of Appeal dismissed the appeal, finding no breach of natural justice.
1.7 Decision Date
2. Parties and Outcomes
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| Steven Chong | Justice of the Court of Appeal | No |
| Judith Prakash | Senior Judge | No |
4. Counsels
4. Facts
- DBL and DBM were engaged in the business of steel trading.
- DBL agreed to sell 19,600 mt of prime steel slabs to DBM under a sales contract.
- The sales contract required the steel slabs to be loaded at any port from KSA.
- The prime steel slabs were loaded onto the vessel M/V [FP].
- The bill of lading stated that 21,430.136 mt of prime steel slabs were loaded on 19 September 2013 at the Dammam Port in the KSA.
- DBL issued an invoice to DBM for USD 9,922,152.97.
- [FD] Bank notified DBM that it had received information that the Goods had been loaded at Bandar Abbas, Iran.
- DBM sought an indemnity from DBL.
- DBM informed DBL that it was cancelling the Sales Contract and asked DBL to refund the Purchase Price.
- DBL paid a net sum of USD 499,975 to DBM on 7 November 2013.
- DBM commenced arbitral proceedings on 24 July 2020.
5. Formal Citations
- DBL v DBM, Civil Appeal No 27 of 2023, [2024] SGCA 19
- DBL v DBM, , [2023] SGHC 267
6. Timeline
| Date | Event |
|---|---|
| Goods loaded onto the vessel M/V [FP] at Dammam Port in KSA | |
| Appellant issued an invoice to the respondent for USD 9,922,152.97 | |
| [FD] Bank notified the respondent that the Goods had been loaded at Bandar Abbas, Iran | |
| Respondent sought an indemnity from the appellant | |
| Appellant provided the respondent with a signed document titled “Indemnity Bond” backdated to 8 September 2013 | |
| Respondent informed the appellant that it was cancelling the Sales Contract | |
| Appellant wrote to the respondent stating that it was awaiting payment of the proceeds from the sale of the Goods to another buyer | |
| Appellant paid a net sum of USD 499,975 to the respondent | |
| Respondent commenced arbitral proceedings | |
| Deadline for disclosing demonstrative exhibits | |
| Hearing took place | |
| Hearing took place | |
| Respondent’s counsel carried out the Searoutes Demonstration | |
| Issuance of the Corrected Award | |
| Decision of the High Court judge in DBL v DBM [2023] SGHC 267 | |
| Appeal dismissed | |
| Grounds of decision furnished |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court held that there was no breach of natural justice that warranted setting aside the arbitral award.
- Category: Procedural
- Sub-Issues:
- Failure to afford reasonable opportunity to address evidence
- Failure to consider defenses
- Related Cases:
- [2020] 1 SLR 695
- [2010] 1 SLR 733
- [2013] 4 SLR 972
- [2015] 3 SLR 488
- [2007] 3 SLR(R) 86
- [2021] 1 SLR 935
- [2013] 1 SLR 125
- Limitation
- Outcome: The court held that the claims were not time-barred because the acknowledgments given by the appellant extended the time for the running of any applicable limitations period.
- Category: Substantive
- Enforceability of Bond
- Outcome: The court did not rule on the enforceability of the bond, finding that even if the bond was unenforceable, the outcome of the arbitral proceedings would not have been different.
- Category: Substantive
8. Remedies Sought
- Refund of Purchase Price
- Indemnity against losses, costs and penalties
- Damages
9. Cause of Actions
- Breach of Contract
- Unjust Enrichment
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Steel Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| DBL v DBM | High Court | Yes | [2023] SGHC 267 | Singapore | The High Court decision that was appealed against in this case. |
| China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another | Court of Appeal | Yes | [2020] 1 SLR 695 | Singapore | Cited for the principle that a party cannot 'reserve' its position until after the award and only pursue a point if the outcome of the award turns out to be unpalatable to it. |
| SEF Construction Pte Ltd v Skoy Connected Pte Ltd | High Court | Yes | [2010] 1 SLR 733 | Singapore | Cited for the principle that natural justice requires that the parties should be heard; it does not require that they be given responses to all submissions made. |
| TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd | High Court | Yes | [2013] 4 SLR 972 | Singapore | Cited for the principle that a tribunal is not obliged to deal with every argument as that would be neither practical nor realistic; rather, a tribunal is only required to deal with the essential issues. |
| AKN and another v ALC and others and other appeals | Court of Appeal | Yes | [2015] 3 SLR 488 | Singapore | Cited for the principle that an aggrieved party needed to show that a clear and virtually inescapable inference could be drawn that a tribunal had failed to consider an important pleaded issue before such a finding would be made. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | Court of Appeal | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the principle that curial intervention would only be justified where an aggrieved party is able to show that there was actual or real prejudice caused by the breach. |
| CBS v CBP | Court of Appeal | Yes | [2021] 1 SLR 935 | Singapore | Cited for the principle that an applicant seeking relief must demonstrate that a different outcome would necessarily have followed but for the breach of natural justice. |
| L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal | Court of Appeal | Yes | [2013] 1 SLR 125 | Singapore | Cited for the principle that the central question is whether, as a result of the breach, the tribunal was denied the benefit of arguments or evidence that had a real as opposed to fanciful chance of making a meaningful difference to the outcome of the arbitral proceedings. |
| Phoenixfin Pte Ltd and others v Convexity Ltd | Court of Appeal | Yes | [2022] 2 SLR 23 | Singapore | Cited in support of the position that a more generous approach may be taken towards pleadings in arbitral proceedings, and that pleadings in arbitral proceedings are not determinative in the same way that they might be in court litigation. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act 1994 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitral Award
- Breach of Natural Justice
- Sales Contract
- Prime Steel Slabs
- Dammam Port
- Indemnity Bond
- Purchase Price
- Searoutes Demonstration
- Limitation Defence
- Unenforceable Bond Defence
15.2 Keywords
- arbitration
- steel trading
- breach of contract
- natural justice
- Singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Arbitration | 95 |
| Natural justice | 80 |
| Recourse against award | 75 |
| Setting aside | 75 |
| Breach of Contract | 70 |
| Commercial Disputes | 60 |
| Civil Procedure | 40 |
16. Subjects
- Arbitration
- Contract Law
- International Trade