By Wong Siew Hong, Eldan Law LLP
Nature of Case
This case concerns an application by the Plaintiff to the High Court for leave to appeal against an arbitral award under s 49(3)(b) of the Arbitration Act.
Facts
In 2013, the parties entered into a contract concerning the development of a condominium project at Seletar Road. The Defendant had engaged the Plaintiff as main contractor to carry out building and construction works for the project.
In October 2014, the Defendant terminated the Plaintiff’s employment under the contract and the Plaintiff commenced arbitration proceedings in November 2014. The arbitration proceedings took place from 2014 to 2019 when the tribunal issued its final award.
In all, four partial awards were issued. The application to court concerned the 4th partial award (“the Costs Award”) which dealt with costs of an earlier, quantum phase of the arbi-tration (“the Quantum Award”). The Defendant had made a Calderbank Offer which was more favourable than the Quantum award but it was not accepted by the Plaintiff. The tri-bunal took the Calderbank Offer into account when issuing the Costs Award.
The Plaintiff therefore sought leave to appeal against the Costs Award on the basis a number of questions of law purportedly arose out of it.
The Ruling
The Court reviewed the law on the circumstances where leave would be granted and cited the 5 conditions set out in Ng Tze Chew Diana v Aikco Construction Pte Ltd [2019] SGHC 259, namely:
- the appeal must be on a question of law (s 49(1) of the Act);
- the determination of that question will substantially affect the rights of one or more of the parties to the arbitration (s 49(5)(a) of the Act);
- the question was one which the arbitrator was asked to determine (s49(5)(b) of the Act);
- on the basis of the findings of fact in the award, the decision of the arbitrator on the question is obviously wrong, or the question is one of general public importance and the decision of the arbitral tribunal is at least open to serious doubt (s 49(5)(c) of the Act); and
- despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the Court to determine the question (s 49(5)(d) of the Act).
The Court also bore in mind the overarching principles of finality in arbitration proceedings and party autonomy set out in Holland Leedon Pte Ltd (In Liquidation) v Metalform Asia Pte Ltd [2011] 2 SLR 1086 as well as Ng Chin Siau & Ors v How Kim Chuan [2007] 2 SLR(R) 789, where it was stated that curial intervention should be minimised. Finally, the Court accepted that it should not approach an award with a “meticulous legal eye endeavouring to pick holes, inconsistencies and faults in the award”: Polaris Shipping Co Ltd v Sinoriches Enter-prises Co Ltd [2015] EWHC 3405 (Comm).
The Plaintiff cited 5 grounds in its application but eventually proceeded only with 4. Of these, the Court grouped them into 3 heads.
After considering all 3 heads, the Court dismissed the application.
First, the question as framed by Plaintiff dealt with whether the tribunal necessarily has to penalise a party in costs if that party rejected a Calderbank offer and later failed to obtain a better outcome in the arbitral proceedings. On this, the Court found that the arbitrator was not in fact misled on the law in relation to adverse costs consequences following from an unaccepted Calderbank offer and dismissed this argument.
Second the Court addressed certain questions framed by CKR pertaining to the tribunal’s alleged overreaches of “jurisdiction”. These questions, the Court found, were questions of fact dressed as questions of law and dismissed them. On this point, the Court reiterated that it will be vigilant in guarding against attempts to frame challenges to a tribunal’s findings of fact as question of law.
The third category of questions raised by CKR concerned whether the tribunal can consider the favourability of a Calderbank offer where the offer sought to settle a non-monetary claim that remained pending before another court or tribunal. The Court dismissed this ar-gument on the facts. First, the Court was not convinced that determination of those would have a substantial impact on the rights of the parties. Second, the Court was not satisfied that the tribunal was asked to determine that question. The “non-monetary claim” referred to in the question involved separate proceedings arising from a related action, and was dis-posed of by the Court of Appeal after the issuance of the Costs Award.
The Court also considered and applied the distinction between an error in the application of the law (which does not confer a right of appeal) and a question of law (which does confer a right of appeal) from the longstanding authority of Ahong Construction (S) Pte Ltd v United Boulevard Pte Ltd [1993] 2 SLR(R) 208. On the facts, the Court in dismissing the application, found that the questions posed pertain to the application of the law.
Coda
The Court highlighted the following in the course of its judgment:
- Citing Permasteelisa Pacific Holdings Ltd v Hyundai Engineering & Construction Co Ltd [2005] 2 SLR(R) 270, the Court reiterated that the case law on granting leave to appeal questions of law arising from an arbitral award illustrates that the threshold for the grant of such leave is a high one;
- Beyond the threshold which must be met, s 49 of the AA is clear in setting out the re-quirements before leave to appeal shall be granted. These requirements are cumulative, and all of them must be satisfied before leave to appeal may be granted.
- The Court also cautioned that parties should carefully consider and evaluate offers to settle disputes. They represent an avenue to minimise the costs of litigation, and can save considerable time and resources. It is for this reason that there may be conse-quences when they are unjustifiably ignored; and
- Finally, the Court stated that it will be vigilant in guarding against attempts to frame a challenge to arbitral tribunals’ findings of fact as questions of law.