Impeaching An Arbitral Award In The Singapore High Court—Natural Justice

The sanctity of arbitration proceedings and awards was again preserved by the Singapore High Court in its decision in TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd [2013] SGHC 186. The tone of the judgment was established in the very first sentence of the introductory paragraph when Chan Seng Onn J stated, "[h]owever good or bad in the eyes of a party, the decision of an arbitral tribunal with the requisite jurisdiction is final and binding." What followed was an instructive analysis of the principles of natural justice in a case that exemplified the difficulty in separating the "genuine challenges" from attempts to massage unhappiness at an arbitral outcome into a ground for challenging an award under the International Arbitration Act (Chapter 143A) (the "IAA").

The case involved an attempt by TMM Division Maritima SA de CV("TMM") to set aside an arbitral award made in respect of a dispute that arose out of the sale and purchase of two secondhand vessels. TMM argued that pursuant to s24(b) of the IAA, the award breached the rules of natural justice prejudicing TMM and determined issues that were beyond the scope of the submission to arbitration.

Curial Scrutiny

The Court accepted that when a challenge against an award is brought, it has a duty to hear the challenge—the IAA and the Model Law both require this. In this instance, the Court recognized that it was being asked to "review the actions or inactions of the arbitral tribunal" and while, on occasion, this may require the Court to refer to and examine the evidence, this did not mean that the Court must always "sift through the entire record of the arbitral proceedings with a fine-tooth comb." Citing the Singapore Court of Appeal judgment in Soh Beng Tee & Co v Fairmount Development Pte Ltd, the Court reiterated that there is a policy of minimal curial intervention in the arbitral process and that courts should not "nit-pick" at the award.

The Rules of Natural Justice

The Court recognized that natural justice requires a party to be afforded an opportunity to be heard and to be heard without bias. However, the judge acknowledged that many of the practical questions defining the limits of these principlessuch as whether parties get to respond to every single argument raised by the other side, or whether a tribunal needs to address every argument raised and explain its reasons for accepting or rejecting themremain unanswered as a matter of Singapore law. While the court...