Functus Officio After Conditional Final Award

• Published date: 07 September 2022
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Chancery Law Corporation
• Author: Mr Tian Luh Tan and Xian Ying Tan

In York International Pte Ltd v Voltas Ltd [2022] SGHC 153, the High Court held that an arbitrator was functus officio after a conditional final award had been rendered by the said arbitrator in 2014.

The facts. This case concerned the plaintiff's application under s 21(9) of the Arbitration Act (Cap 10, 2002 Rev Ed) (the 'AA') for the court to decide that the sole arbitrator (the 'Arbitrator') in Singapore International Arbitration Centre ('SIAC') Arbitration No 61 of 2012 (the 'Arbitration') did not have jurisdiction to issue a further award in the Arbitration, following the Arbitrator's ruling as a preliminary question that he has jurisdiction to do so (at [2]).

This centred on whether the award issued by the Arbitrator in 2014, titled 'Final Award' (the '2014 Award'), resolved all the issues in the Arbitration, such that the Arbitrator became functus officio, and therefore no longer retained jurisdiction to issue any further award.

The background. The defendant was engaged by Resorts World at Sentosa Pte Ltd ('RWS') to carry out the design, supply, construction, completion and maintenance of a District Cooling Plant ('DCP') on Sentosa Island, Singapore (the 'Main Contract') (at [5]). The Main Contract was subsequently novated by RWS to DCP (Sentosa) Pte Ltd ('DCP Sentosa').

Under a purchase agreement, the defendant purchased five water-cooled dual centrifugal chillers (each powered by two motors) (the 'Chillers') from the plaintiff (the 'Purchase Agreement'), which formed one of the components of the DCP (at [6]). The plaintiff duly delivered the Chillers to the defendant, but around one to two years later, seven of the Chiller motors failed during operation.

The 2014 Arbitration. The plaintiff commenced the Arbitration against the defendant for, inter alia, the plaintiff's claim for outstanding payments owed by the defendant under the Purchase Agreement (at [8]).

The defendant counterclaimed for damages, losses, and/or expenses arising out of the plaintiff's supply of allegedly defective Chillers, alleging that the Chiller motor failures had resulted in RWS making claims against the defendant for losses and expenses. The defendant therefore sought to recover those amounts from the plaintiff in the Arbitration.

Among others, the defendant counterclaimed for a sum of S$1,099,162.46 (the 'Nitrogen Claim') and a sum of S$33,277 (the 'Removal Claim'), being the costs that RWS had incurred due to the allegedly defective Chillers.

The 2014 Award. The Arbitrator issued the 2014 Award allowing the defendant's counterclaims in part, finding that the plaintiff was liable to the defendant for the Nitrogen and Removal Claims (at [9]).

But as the Arbitrator was concerned of the risk of the defendant enjoying a windfall if the defendant ultimately did not have to pay RWS, the Arbitrator decided to make his orders conditional upon the defendant making payment to RWS.

The relevant orders made are set out below (at [9] - [10]):

• For the Nitrogen Claim:
  
  ' I will make an order for the [plaintiff] to make payment to the [defendant] for this head of damage as itemised at page 988 of Mr Sidhwani's...