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In CEF and another v. CEH [2021] SGHC 114, the Singapore High Court dismissed an application to set aside an award, reaffirming its clear commitment to minimal curial intervention. It addressed the practical application of principles regarding the setting aside of an arbitral award in Singapore. It also refused to expand the rules of natural justice.

Notably, the Court cited with approval a passage from International Arbitration in Singapore, Legislation and Materials (Sweet & Maxwell, 2018) by Timothy Cooke, in determining the issue of whether the award was beyond the scope of the parties’ submission to arbitration.

What happened between the parties?

The parties entered into an equipment and services contract, and a services agreement, relating to the construction of a steel plant. The plaintiffs (P) also extended loans totalling €15 million to the defendant (D). The steel plant failed to reach production targets. The parties blamed each other for the delays that led to this failure, and each held the other in repudiatory breach.

The agreements provided for disputes to be resolved in Singapore under the Rules of Arbitration of the International Chamber of Commerce.

What did the ICC tribunal decide and why?

The parties commenced arbitrations against each other, which were consolidated by consent.

P sought declaratory relief, damages for repudiatory breach, and repayment of the loan with interest. D argued that P made material misrepresentations in the equipment and services contract. D sought rescission of both agreements, repayment of all sums paid by D to P, and damages for misrepresentation or, in the alternative, damages for breach of contract.

The tribunal issued an award in favour of D, upholding the misrepresentation claim in its entirety and rescinded both agreements. It ordered the following relief:

  • D was entitled to restitution (Repayment Order).
  • D was to transfer title to the plant to P in return for the payment above (Transfer Order).
  • D was entitled to reliance damages (Damages Order)

The application to set aside the award before the Singapore High Court

P applied to the Singapore High Court (Court) to set aside all three orders. It applied to set aside the Transfer Order on four main grounds:

  1. The arbitral procedure was not in accordance with the parties’ agreement or Article 34(2)(a)(iv) of the UNCITRAL Model Law on International Commercial Arbitration (Model Law).
  2. The award decided matters beyond the scope of the submission to arbitration (Article 34(2)(a)(iii) of the Model Law).
  3. There was a breach of natural justice in connection with the making of the award under section 24(b) of the International Arbitration Act (Cap. 143A).
  4. The plaintiffs were unable to present their case on essential issues in the arbitration (Article 34(2)(a)(ii) of the Model Law).

P also contended that the tribunal had breached natural justice in making the Repayment Order and Damages Order in violation of the fair hearing rule, and without evidence of the value, or diminution of value, of the plant and reliance loss.

The High Court dismissed P’s challenge to all three orders.