CZT v CZU: Appeal on Setting Aside Arbitral Award for Defence Equipment Defect

CZT appealed against a decision by the Singapore International Commercial Court (SICC) dismissing its application to set aside an arbitral award in favor of CZU. The dispute arose from a contract related to the construction of defence equipment, where CZT was found liable for delivering defective material packages. CZT argued it was denied natural justice. The Court of Appeal dismissed the appeal, finding no unfairness in the arbitral tribunal's decision-making process.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Written Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Appeal to set aside an arbitral award regarding a defect in defence equipment. The court dismissed the appeal, finding no denial of natural justice.

1.7 Decision Date

12 September 2024

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
CZT	Appellant	Corporation	Appeal Dismissed	Lost	Francis Xavier SC of Rajah & Tann Singapore LLP Chia Xin Ran Alina of Rajah & Tann Singapore LLP Gani Hui Ying Tracy of Rajah & Tann Singapore LLP Soon Jian Wei Joel of Rajah & Tann Singapore LLP
CZU	Respondent	Corporation	Appeal Dismissed	Won	Koh Swee Yen SC of WongPartnership LLP Pang Yi Ching Alessa of WongPartnership LLP Claire Lim of WongPartnership LLP Teo Wei Kiat Samuel of WongPartnership LLP Shawn Ang De Xian of WongPartnership LLP

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	No
Steven Chong	Justice of the Court of Appeal	No
James Allsop	International Judge	Yes

4. Counsels

Counsel Name	Organization
Francis Xavier SC	Rajah & Tann Singapore LLP
Chia Xin Ran Alina	Rajah & Tann Singapore LLP
Gani Hui Ying Tracy	Rajah & Tann Singapore LLP
Soon Jian Wei Joel	Rajah & Tann Singapore LLP
Koh Swee Yen SC	WongPartnership LLP
Pang Yi Ching Alessa	WongPartnership LLP
Claire Lim	WongPartnership LLP
Teo Wei Kiat Samuel	WongPartnership LLP
Shawn Ang De Xian	WongPartnership LLP

4. Facts

The dispute arose from a contract for the construction of defence equipment.
The State Party alleged a defect in the equipment.
The Foreign Constructor was found liable by the arbitral tribunal for delivering defective material packages.
The Foreign Constructor applied to set aside the arbitral award, claiming denial of natural justice.
The contractual arrangements involved four contracts: Provisional Contract, Transfer Agreement, Supply Contract, and Domestic Contract.
The central issue was whether the State Party retained any contractual obligation from the Foreign Constructor after the Transfer Agreement.

5. Formal Citations

CZT v CZU, , [2024] SGCA(I) 6

6. Timeline

Date	Event
2023-01-01	Originating Summons No 1 of 2023 filed in the Singapore International Commercial Court
2023-01-01	Civil Appeal No 11 of 2023 filed from the Singapore International Commercial Court
2024-07-02	Judgment reserved
2024-09-13	Judgment delivered

7. Legal Issues

Denial of Natural Justice
- Outcome: The court found no denial of natural justice.
- Category: Procedural
- Sub-Issues:
  - Failure to consider critical arguments
  - Conclusions based on facts not argued by parties
- Related Cases:
  - [2015] 3 SLR 154
  - [2007] 3 SLR(R) 86
  - [1978] VR 385
  - [1959] 1 WLR 787
  - [1984] 2 Lloyd’s Rep 66
  - [1998] 3 All ER 730
  - [1991] NZHC 1501
  - [1975] AC 295
  - [1999] 2 NZLR 452
  - [2013] 1 SLR 125
  - [2022] 2 SLR 1
  - [2022] 1 SLR 1080
  - [2023] SGHC 275
  - [2023] 3 SLR 1
Contractual Interpretation
- Outcome: The court upheld the tribunal's interpretation of the Provisional Contract and Transfer Agreement.
- Category: Substantive

8. Remedies Sought

Setting aside of arbitral award

9. Cause of Actions

Breach of Contract

10. Practice Areas

Arbitration
Commercial Litigation

11. Industries

Defence

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Coal & Oil Co LLC v GHCL Ltd	High Court	Yes	[2015] 3 SLR 154	Singapore	Cited for the principle that an assertion of a denial of natural justice is a serious matter and cases that have succeeded have been limited to egregious cases where the error is clear.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd	Court of Appeal	Yes	[2007] 3 SLR(R) 86	Singapore	Cited for the quadripartite analysis of an asserted breach of natural justice.
Gas & Fuel Corporation of Victoria v Wood Hall Ltd & Leonard Pipeline Contractors Ltd	Supreme Court of Victoria	Yes	[1978] VR 385	Australia	Cited regarding the notions of fairness and judgment only after a full and fair hearing given to all parties.
Société Franco-Tunisienne D'Armement-Tunis v Government of Ceylon	Privy Council	Yes	[1959] 1 WLR 787	United Kingdom	Cited as an example of a case where the circumstances disclosed real unfairness.
The “Vimeira”	Admiralty Court	Yes	[1984] 2 Lloyd’s Rep 66	United Kingdom	Cited as an example of a case where the circumstances disclosed real unfairness.
Gbangbola v Smith & Sherriff Ltd	Court of Appeal	Yes	[1998] 3 All ER 730	United Kingdom	Cited regarding deciding a matter not argued by the parties.
Burne v Young	High Court	Yes	[1991] NZHC 1501	New Zealand	Cited for the principle that it is for counsel to lay out and develop the case, and for the Judge or arbitrator to decide as best he may on the materials the parties have given him.
F Hoffmann-La Roche & Co AG v Secretary of State for Trade and Industry	House of Lords	Yes	[1975] AC 295	United Kingdom	Cited for the principle that the rules of natural justice do not require the decision maker to disclose what he is minded to decide so that the parties may have a further opportunity of criticising his mental processes before he reaches a final decision.
Trustees of Rotoaira Forest Trust v Attorney-General	High Court	Yes	[1999] 2 NZLR 452	New Zealand	Cited regarding the evaluation of circumstances that founded the conclusion of unfairness.
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 test of prejudice: whether the arbitrator was denied the benefit of arguments or evidence that had a real as opposed to a fanciful chance of making a difference to his deliberations.
CKH v CKG and another matter	Court of Appeal	Yes	[2022] 2 SLR 1	Singapore	Cited for the principle that a failure by an arbitrator to address an issue can constitute a breach of the fair hearing rule.
BZW and another v BZV	High Court	Yes	[2022] 1 SLR 1080	Singapore	Cited for the principle that the tribunal’s chain of reasoning must be one which the parties had reasonable notice that the tribunal could adopt and one which has a sufficient nexus to the parties’ arguments.
CYE v CYF	High Court	Yes	[2023] SGHC 275	Singapore	Cited for the principle that an arbitral tribunal has to ensure that the essential issues are dealt with; it need not deal with each point made by a party.
CFJ and another v CFL and another and other matters	Court of Appeal	Yes	[2023] 3 SLR 1	Singapore	Cited in relation to the question of excess of jurisdiction.
CZT v CZU	Singapore International Commercial Court	Yes	[2023] SGHC(I) 22	Singapore	The judgment under appeal.

13. Applicable Rules

Rule Name
Article 34(2)(a)(iii) of the Model Law

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

Natural Justice
Arbitral Award
Provisional Contract
Transfer Agreement
Supply Contract
Defence Equipment
Material Packages
Domestic Constructor
State Party
Foreign Constructor

15.2 Keywords

arbitration
contract
natural justice
defence equipment
singapore

17. Areas of Law

Area Name	Relevance Score
Arbitration	90
International Commercial Arbitration	85
Natural justice	75
Contractual terms	60
Construction	50

16. Subjects

Arbitration
Contract Law
Civil Procedure
Construction Dispute