Haide Building Materials Co Ltd v Ship Recycling Investments Inc: Setting Aside Arbitration Award for Breach of Natural Justice

In Haide Building Materials Co Ltd v Ship Recycling Investments Inc, the High Court of Singapore dismissed Haide's application to set aside a final arbitration award. Haide sought to set aside the award on grounds including breach of natural justice, fraud, and deviation from agreed procedure. The court, presided over by Justice Mohan, found Haide's objections unmeritorious and dismissed the application in its entirety. The dispute arose from an abortive sale of a vessel, with Ship Recycling claiming breach of contract and Haide counterclaiming for damages.

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 court dismisses Haide's application to set aside an arbitration award, finding no breach of natural justice or deviation from agreed procedure.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels

3. Judges

Judge NameTitleDelivered Judgment
S MohanJudge of the High CourtYes

4. Counsels

Counsel NameOrganization

4. Facts

  1. Haide and Ship Recycling entered into a Memorandum of Agreement for the sale of a vessel.
  2. Ship Recycling paid a deposit of 30% of the purchase price into escrow.
  3. Ship Recycling refused to accept the Vessel, alleging discrepancies in its condition.
  4. Ship Recycling terminated the MOA based on a repudiatory breach by Haide.
  5. Ship Recycling commenced arbitration against Haide.
  6. Haide advanced counterclaims against Ship Recycling.
  7. The Tribunal found in favor of Ship Recycling and dismissed Haide’s counterclaim.

5. Formal Citations

  1. Haide Building Materials Co Ltd v Ship Recycling Investments Inc, Originating Application No 1255 of 2023, [2024] SGHC 222

6. Timeline

DateEvent
Memorandum of Agreement signed
Haide purported to deliver the Vessel at Chittagong, Bangladesh
Ship Recycling informed Haide of alleged discrepancies
Ship Recycling purported to terminate the MOA
Ship Recycling commenced the Arbitration against Haide
Vessel arrested by Ship Recycling at Chittagong
Ship Recycling’s Claim Submissions
Haide’s Response to the Claim Submission and Statement of Counterclaims
Ship Recycling’s Reply to Claim Submissions and Defence to Counterclaims
Haide’s Reply to the Claimant’s Defence to Counterclaims
Ship Recycling’s Surrejoinder to Defendant’s Reply to Claimant’s Reply to Counterclaim
Haide emailed the Tribunal requesting an expedited response
Haide emailed the Tribunal criticizing Ship Recycling for relying on a court judgment
Tribunal assured the parties that the Tribunal will bear in mind the limits of its jurisdiction
Tribunal released the Award
Claimant’s Written Submissions
Defendant’s Written Submissions
Oral arguments heard
Oral grounds delivered dismissing the application
Full grounds of decision furnished

7. Legal Issues

  1. Breach of Natural Justice
    • Outcome: The court found no breach of natural justice.
    • Category: Procedural
    • Sub-Issues:
      • Failure to consider essential issues
      • Irrational chain of reasoning
      • Apparent bias
  2. Deviation from Agreed Procedure
    • Outcome: The court found no deviation from the agreed procedure.
    • Category: Procedural
  3. Fraud
    • Outcome: The court found that the award was not procured by fraud.
    • Category: Substantive

8. Remedies Sought

  1. Setting aside of final award
  2. Remittal of award to the Tribunal

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Shipping
  • Recycling

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Xia Zhengyan v Geng ChangqingCourt of AppealYes[2015] 3 SLR 732SingaporeCited to caution against adopting a 'kitchen-sink' approach in litigation, where numerous claims or allegations may dilute the truly material facts and evidence.
MEX Group Worldwide Ltd v Stewart Owen Ford and othersEnglish Court of AppealYes[2024] EWCA Civ 959England and WalesCited to support the view that courts may decline to consider applications with a long list of alleged failures without identifying the key points.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte LtdCourt of AppealYes[2007] 3 SLR(R) 86SingaporeCited for the principle that a breach of natural justice must cause actual or real prejudice to warrant setting aside an award.
L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appealCourt of AppealYes[2013] 1 SLR 125SingaporeCited for the principle that a breach of natural justice must have a real chance of making a difference to the arbitrator's deliberations to warrant setting aside an award.
CKH v CKG and another matterCourt of AppealYes[2022] 2 SLR 1SingaporeCited for the principle that a tribunal's failure to consider an issue submitted for determination can amount to a breach of natural justice.
Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte LtdHigh CourtYes[2010] SGHC 80SingaporeCited for the principle that the right to a fair hearing is a rule of natural justice.
Orascom TMT Investments SARL (formerly Weather Investments II SARL) v VEON Ltd (formerly VimpelCom Ltd)English High CourtYes[2018] Bus LR 1787England and WalesCited for the principle that a tribunal is only required to deal with the essential issues arising in the arbitration.
TMM Division Maritima SA de CV v Pacific Richfield Marine Pte LtdHigh CourtYes[2013] 4 SLR 972SingaporeCited for the principle that the court would generally give the tribunal fair latitude in determining what is essential and what is not.
Margulead Ltd v Exide TechnologiesEnglish High CourtYes[2005] 1 Lloyd’s Rep 324England and WalesCited for the principle that a tribunal's duty to consider an issue does not require it to provide a response to all submissions made by the parties.
SEF Construction Pte Ltd v Skoy Connected Pte LtdHigh CourtYes[2010] 1 SLR 733SingaporeCited for the principle that natural justice requires that the parties should be heard; it does not require that they be given responses on all submissions made.
BLB and another v BLC and othersHigh CourtYes[2013] 4 SLR 1169SingaporeCited for the principle that a tribunal may consider certain arguments particularly compelling or determinative of the result so as to dispose of the matter and render all other arguments nugatory.
AKN and another v ALC and others and other appealsCourt of AppealYes[2015] 3 SLR 488SingaporeCited for the principle that the threshold for a finding that the tribunal had failed to consider an issue is a high one; specifically, it has been held that the court should only draw such an inference if the inference is 'clear and virtually inescapable'.
BLC and others v BLB and anotherCourt of AppealYes[2014] 4 SLR 79SingaporeCited to warn against parties artificially enlarging or narrowing the scope of submission ex post facto to attack the tribunal's decision.
X and another v ZCoHong Kong Court of First InstanceYes[2024] HKCFI 695Hong KongCited to criticize the common occurrence of a losing party challenging an award by 'repackaging' arguments not made the focus of submissions to the tribunal.
CBX and another v CBZ and othersCourt of AppealYes[2022] 1 SLR 47SingaporeCited for the principle that the conduct of the parties to litigation before an arbitrator or judge may widen the scope of the issues falling for determination.
JVL Agro Industries Ltd v Agritrade International Pte LtdHigh CourtYes[2016] 4 SLR 768SingaporeCited for the principle that an issue raised in a party's pleadings remains in play throughout the arbitration unless it is expressly withdrawn.
P v D and othersEnglish High CourtYes[2017] EWHC 3273 (Comm)England and WalesCited for the principle that an issue raised in a party's pleadings remains in play throughout the arbitration unless it is expressly withdrawn.
CKG v CKHSingapore International Commercial CourtYes[2021] 5 SLR 84SingaporeCited for the principle that the court must look at the conduct of the reference as a whole to determine whether the arbitrators have considered an important issue.
Petrochemical Industries Co (KSC) v Dow Chemical CoEnglish High CourtYes[2012] 2 Lloyd’s Rep 691England and WalesCited for the principle that a tribunal may deal with an issue by so deciding a logically anterior point.
Gracie and another v RoseEnglish High CourtYes[2019] EWHC 1176 (Ch)England and WalesCited for the principle that the terms of the arbitrator's award may reveal that a point thought to form an issue requiring determination has ceased to be such in light of other findings.
Hyphen Trading Ltd v BLPL Singapore Pte Ltd and othersHigh CourtYes[2023] SGHC 302SingaporeCited for the principle that a sale pendente lite is an interlocutory measure to convert property into cash to prevent value erosion during litigation.
BZW and another v BZVCourt of AppealYes[2022] 1 SLR 1080SingaporeCited for the principle that a Tribunal may act in breach of natural justice if it acts irrationally or capriciously by adopting a chain of reasoning that the parties could not reasonably have foreseen.
CWP v CWQHigh CourtYes[2023] 4 SLR 1725SingaporeCited for the principle that a setting aside application is not an appeal on the merits, and a court will not intervene on the mere allegation that the tribunal got the decision wrong.
Glaziers Engineering Pte Ltd v WCS Engineering Construction Pte LtdCourt of AppealYes[2018] 2 SLR 1311SingaporeCited for the principle that if a party could have reasonably foreseen that an issue would form part of the tribunal's reasoning but omitted to address it, there is no cause for complaint on the natural justice front.
CDX and another v CDZ and anotherHigh CourtYes[2021] 5 SLR 405SingaporeCited for the principle that no breach of natural justice occurs if a party fails to address an issue that is a link in the tribunal's chain of reasoning either because it fails to appreciate that the issue is in play through mistake or misunderstanding, or has made a deliberate decision not to engage it for some reason.
BOI v BOJCourt of AppealYes[2018] 2 SLR 1156SingaporeCited for the test for apparent bias, which involves objectively identifying salient facts and circumstances and understanding whether a fair-minded and informed observer would reasonably entertain an apprehension of bias.
CFJ and another v CFL and another and other mattersSingapore International Commercial CourtYes[2023] 3 SLR 1SingaporeCited for the test for apparent bias, which involves objectively identifying salient facts and circumstances and understanding whether a fair-minded and informed observer would reasonably entertain an apprehension of bias.
China Machine New Energy Corp v Jaguar Energy Guatemala LLC and anotherCourt of AppealYes[2020] 1 SLR 695SingaporeCited for the principle that the courts pay significant deference to the tribunal's exercise of procedural discretion and its case management powers.
Anwar Siraj and another v Ting Kang Chung and anotherHigh CourtYes[2003] 2 SLR(R) 287SingaporeCited for the principle that the arbitrator is master of his own procedure and has a wide discretionary power to conduct the arbitration proceedings in the way he sees fit, so long as what he is doing is not manifestly unfair or contrary to natural justice.
DGE v DGFHigh CourtYes[2024] SGHC 107SingaporeCited for the requirements for establishing a deviation from the parties' agreed arbitral procedure.
Lao Holdings NV and another v Government of the Lao People’s Democratic RepublicCourt of AppealYes[2023] 1 SLR 55SingaporeCited for the requirements for establishing a deviation from the parties' agreed arbitral procedure.
Triulzi Cesare SRL v Xinyi Group (Glass) Co LtdHigh CourtYes[2015] 1 SLR 114SingaporeCited for the principle that the requirement of prejudice arising from the deviation from the agreed arbitral procedure serves to ensure that an award is not set aside purely for a technical or minor breach.
Coal & Oil Co LLC v GHCL LtdHigh CourtYes[2015] 3 SLR 154SingaporeCited for the principle that the challenger must prove that the breach could reasonably be said to have altered the final outcome of the arbitral proceedings in some material way.
Hong Huat Development Co (Pte) Ltd v Hiap Hong & Co Pte LtdCourt of AppealYes[2000] 1 SLR(R) 510SingaporeCited for the importance of parties adopting a 'cards up' approach to their procedural objections.
Ting Kang Chung John v Teo Hee Lai Building Constructions Pte Ltd and othersHigh CourtYes[2010] 2 SLR 625SingaporeCited for the principle that a tribunal had no jurisdiction to issue the award by reason of the delay.
Alphamix Ltd v The District Council of Rivière du RempartJudicial Committee of the Privy CouncilYes[2023] UKPC 20United KingdomCited for the principle that the parties had demonstrated an unequivocal common intention that delay would not result in the award being invalid, amounting to a tacit agreement to extend the time limit for rendering the award.
CNG v GHong Kong Court of First InstanceYes[2024] 2 HKLRD 152Hong KongCited for the principle that the principle of minimal curial intervention narrows both the grounds for challenge and prospects of a challenge bearing fruit.
CLX v CLY and another and another matterHigh CourtYes[2023] 4 SLR 241SingaporeCited for the principle that where allegations of fraud and dishonesty are raised by a party seeking to challenge an award, 'strong and cogent evidence' must be adduced before a court would be prepared to make a finding of fraud.
Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and anotherHigh CourtYes[2021] 3 SLR 725SingaporeCited for the principle that where allegations of fraud and dishonesty are raised by a party seeking to challenge an award, 'strong and cogent evidence' must be adduced before a court would be prepared to make a finding of fraud.
BVU v BVXHigh CourtYes[2019] SGHC 69SingaporeCited for the principle that the phrase 'induced or affected' in the wording of s 24(a) of the IAA plainly contemplates a causative link between the alleged fraud and the decision in favor of the party responsible for the fraud.
Bloomberry Resorts and Hotels Inc and another v Global Gaming Philippines LLC and anotherCourt of AppealYes[2021] 1 SLR 1045SingaporeCited for the principle that the party challenging the award on grounds of fraud must show a connection between the alleged fraud and the making of the arbitral award.
Chantiers De l’Atlantique SA v Gaztransport & Technigaz SASEnglish High CourtYes[2011] EWHC 3383 (Comm)England and WalesCited for the principle that even if the true position had been disclosed to the tribunal, it would not, in all probability, have made any difference to the decision of the tribunal.

13. Applicable Rules

Rule Name
Rules of the Singapore Chamber of Maritime Arbitration (4th Ed, 2022)

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act 1994 (2020 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Setting aside
  • Breach of natural justice
  • UNCITRAL Model Law
  • International Arbitration Act
  • Memorandum of Agreement
  • No Objection Certificate
  • Notice of Readiness
  • Lightweight
  • Bunkers Remaining on Board

15.2 Keywords

  • arbitration
  • setting aside
  • breach of natural justice
  • international arbitration
  • maritime arbitration
  • contract dispute

17. Areas of Law

Area NameRelevance Score
Arbitration95
Setting aside85
International Commercial Arbitration80
Recourse against award75
Breach of natural justice70
Natural justice70
Essential issues in arbitration65
Tribunal not dealing with counterclaim60
Deviation from parties’ agreed procedure55
Irrational or capricious reasoning50
Apparent bias45
Jurisdiction40
Award procured by fraud35
Commercial Disputes30

16. Subjects

  • Arbitration
  • Contract Law
  • Shipping Law