Wan Sern Metal Industries v Hua Tian Engineering: Setting Aside Arbitral Award for Breach of Natural Justice

In Wan Sern Metal Industries Pte Ltd v Hua Tian Engineering Pte Ltd, the Singapore Court of Appeal heard an appeal against a High Court decision dismissing Wan Sern's application to set aside an arbitral award. The arbitration, seated in Singapore and administered by the SIAC, concerned a construction project dispute. The Court of Appeal allowed the appeal in part, finding that the arbitrator breached natural justice by failing to properly consider an unpleaded claim related to the balance work counterclaim. The court set aside the award insofar as it concerned the balance work counterclaim.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Allowed in Part

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal sets aside an arbitral award due to a breach of natural justice, specifically regarding an unpleaded claim in a construction dispute.

1.7 Decision Date

12 February 2025

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Wan Sern Metal Industries Pte Ltd	Appellant, Applicant	Corporation	Appeal Allowed in Part	Partial	Ashok Kumar Rai of Cairnhill Law LLC Yeo Wei Ying Jolyn of Cairnhill Law LLC
Hua Tian Engineering Pte Ltd	Respondent	Corporation	Partial Loss	Partial	Daniel Tay Yi Ming of Chan Neo LLP Lee Yun Long of Chan Neo LLP
Lian Beng Construction (1988) Pte Ltd	Other	Corporation

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

Counsel Name	Organization
Ashok Kumar Rai	Cairnhill Law LLC
Yeo Wei Ying Jolyn	Cairnhill Law LLC
Daniel Tay Yi Ming	Chan Neo LLP
Lee Yun Long	Chan Neo LLP

4. Facts

Wan Sern Metal Industries was a sub-contractor for the Defu Industrial City project.
Hua Tian Engineering was engaged by Wan Sern as a sub-contractor for labor supply.
Disputes arose between Wan Sern and Hua Tian regarding defective works.
Wan Sern terminated the Sub-Contract on 15 July 2022.
Hua Tian commenced an adjudication application against Wan Sern under SOPA.
Wan Sern commenced SIAC arbitration to challenge the adjudication determination.
The arbitration proceeded on an expedited, documents-only basis.

5. Formal Citations

Wan Sern Metal Industries Pte Ltd v Hua Tian Engineering Pte Ltd, Civil Appeal No 10 of 2024, [2025] SGCA 5

6. Timeline

Date	Event
2017-11-28	Main contract signed between Lian Beng Construction and Wan Sern Metal Industries.
2018-05-04	Sub-Contract agreement executed by Wan Sern Metal Industries.
2018-07-17	Sub-Contract agreement executed by Hua Tian Engineering.
2022-04-15	Hua Tian Engineering issued a payment claim.
2022-05-10	Wan Sern Metal Industries issued a payment response.
2022-05-18	Hua Tian Engineering lodged an adjudication application.
2022-06-14	Adjudication Determination issued.
2022-06-21	Wan Sern Metal Industries filed a Notice of Arbitration with the SIAC.
2022-07-15	Wan Sern Metal Industries issued a notice of termination of the Sub-Contract.
2022-12-27	Sole arbitrator appointed.
2023-02-10	Wan Sern Metal Industries filed a Statement of Claim.
2023-02-24	Hua Tian Engineering filed a Defence and Counterclaim.
2023-04-24	Parties agreed to list of issues.
2023-05-22	Hua Tian Engineering filed written submissions.
2023-05-26	Wan Sern Metal Industries filed reply written submissions.
2023-07-31	Arbitral award issued.
2023-01-01	Wan Sern Metal Industries applied to set aside the Award in HC/OA 1079/2023.
2024-10-10	Hearing date.
2025-02-13	Judgment reserved.

7. Legal Issues

Breach of Natural Justice
- Outcome: The court found that the arbitrator breached natural justice by failing to properly consider an unpleaded claim related to the balance work counterclaim.
- Category: Procedural
- Sub-Issues:
  - Failure to apply mind to essential issues
  - Introduction of unpleaded issue
- Related Cases:
  - [2020] 1 SLR 695
  - [2010] SGHC 80
  - [2013] 1 SLR 125
  - [2022] 1 SLR 1080
Scope of Submission to Arbitration
- Outcome: The court did not make a determination on whether the arbitrator exceeded the scope of submission to arbitration.
- Category: Procedural
Breach of Agreed Arbitral Procedure
- Outcome: The court did not make a determination on whether the arbitrator acted in breach of agreed arbitral procedure.
- Category: Procedural

8. Remedies Sought

Setting aside of arbitral award
Declaration under s 21(1)(b) of the SOPA

9. Cause of Actions

Breach of Contract

10. Practice Areas

Arbitration
Commercial Litigation
Construction Law

11. Industries

Construction

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
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 the requirements of natural justice may differ according to the context of the case, particularly in expedited arbitrations.
CVV and others v CWB	Court of Appeal	Yes	[2024] 1 SLR 32	Singapore	Cited for the principle that errors of law or fact are not grounds to set aside an arbitral award.
AKN and another v ALC and others and other appeals	Court of Appeal	Yes	[2015] 3 SLR 488	Singapore	Cited for the principle that a failure to apply mind to essential issues must be shown by clear and inescapable inference.
BZW and another v BZV	Court of Appeal	Yes	[2022] 1 SLR 1080	Singapore	Cited for the principles regarding breach of the fair hearing rule and defective chain of reasoning in arbitration.
Phoenixfin Pte Ltd and others v Convexity Ltd	Court of Appeal	Yes	[2022] 2 SLR 23	Singapore	Cited for the principle that parties may agree to an unpleaded issue being dealt with in the arbitration.
CDM and another v CDP	Court of Appeal	Yes	[2021] 2 SLR 235	Singapore	Cited for the sources to determine the scope of submission to arbitration.
CBX and another v CBZ and others	Court of Appeal	Yes	[2022] 1 SLR 47	Singapore	Cited for the function of pleadings in defining the parameters of the issues which the parties have to address.
Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd	High Court	Yes	[2010] SGHC 80	Singapore	Cited for the principle that failure to consider a pleaded contention due to a mistaken belief constitutes a 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 test of actual prejudice in breach of natural justice claims.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd	High Court	Yes	[2007] 3 SLR(R) 86	Singapore	Cited regarding the test of 'some actual or real prejudice' but distinguished.
AKN and another v ALC and others and other appeals	Court of Appeal	Yes	[2016] 1 SLR 966	Singapore	Cited for the courses of action open to the court when there is a breach of natural justice.
CAJ and another v CAI and another appeal	Court of Appeal	Yes	[2022] 1 SLR 505	Singapore	Cited for the principle that awards were generally remitted to deal with a point which was already before the tribunal, meaning that the point had already been pleaded.

13. Applicable Rules

Rule Name
Arbitration Rules of the SIAC (6th Ed, 1 August 2016)
Order 3 rr 1(2)(c)(iii) and 1(2)(d) of the Rules of Court 2021

14. Applicable Statutes

Statute Name	Jurisdiction
Arbitration Act 2001	Singapore
International Arbitration Act 1994	Singapore
Building and Construction Industry Security of Payment Act 2004	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Documents-only arbitration
Natural justice
Balance Work Counterclaim
Expectation Damages Issue
SIAC Rules
Unpleaded claim
Expedited arbitration

15.2 Keywords

arbitration
construction
singapore
natural justice
setting aside
award
SIAC
unpleaded claim

17. Areas of Law

Area Name	Relevance Score
Arbitration	95
Construction Law	60
Commercial Litigation	30
Civil Litigation	25

16. Subjects

Arbitration
Construction Dispute
Civil Procedure