Artic Builders & Company (Pte) Ltd v Tan Tong Meng Company (Pte) Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 22 May 1986 |
| Docket Number | Privy Council Appeal No 67 of |
| Date | 22 May 1986 |
| Court | Privy Council |
[1986] SGPC 3
Privy Council
Lord Bridge of Harwich
,
Lord Brightman
,
Lord Mackay of Clashfern
,
Lord Ackner
and
Lord Goff of Chieveley
Privy Council Appeal No 67 of 1984
Peter Cresswell QC and Nicholas Merriman (Clifford-Turner) for the appellant
Desmond Wright QC and C S Wu (Taylor Garrett) for the respondent.
Tersons Ltd v Stevenage Development Corp [1965] 1 QB 37 (refd)
Arbitration–Challenge against arbitrator–Rules of natural justice–Arbitrator refusing request by party to provide notes of evidence of arbitration hearing–Arbitrator failing to provide notes to both parties–Whether constituting misconduct on part of arbitrator
The respondent had been involved in an arbitration against the appellant, in which the arbitrator had given an interim award in favour of the respondent. Shortly thereafter, the appellant discharged its counsel, and engaged new lawyers. The appellant then sought to set aside the award via an application to the High Court but the matter was remitted to the arbitrator to determine one point - whether the appellant had limited its case to a particular clause in the contract which was the subject of dispute. At the remission hearing, the new lawyers sought to obtain the notes of evidence taken by the arbitrator in the course of the earlier hearing in order to determine whether the previous solicitors had taken the position of limiting the appellant's case to the particular clause in question. The new lawyers contended that their client, the appellant, had categorically instructed the first set of counsel not to so limit its case. The arbitrator refused to provide the notes, as he had not exhibited his notes of evidence to the interim award and was of the view that he was not entitled to provide them as such. After the remission hearing, the appellant took out another motion to the High Court to set aside the interim award, alleging misconduct on the part of the arbitrator by showing bias against the appellant and failing to observe the rules of natural justice during the remission hearing by refusing to provide the notes. The High Court set aside the interim award, but this decision was reversed by the Court of Appeal. The appellant then appealed to the Privy Council.
Held, dismissing the appeal:
(1) The arbitrator, following the appropriate practice, had not exhibited his notes of evidence to his interim award. He therefore felt, and so stated, that he was precluded from complying with the new lawyers' request. In forming this view, he was clearly wrong. The arbitrator was clearly at liberty, if he had been so minded, to provide the parties with copies of his notes of evidence in order to assist in the resolution of that issue. However, he was under no duty to supply copies of his notes: at [29] and [30].
(2) The fact that the arbitrator misunderstood his entitlement to show the parties his notes did not of itself result in any unfairness or in any failure to observe the rules of natural justice. He had withheld the notes not merely from the appellants but from both parties. He had thus acted even-handedly: at [30].
(delivering the judgment of the Board):
1 The appellants were the respondents in an arbitration, and the plaintiffs in two originating motions relating to that arbitration. The respondents were the claimants in that arbitration and the defendants to those two motions. The subject matter of the arbitration was a building contract dated 15 November 1975 made between the appellants and the respondents by virtue of which the respondents agreed to erect and complete for the appellants a 19-storey apartment block in Singapore. Work commenced on 26 September 1976 and continued until the appellants, by letter of 2 June 1978 written by their solicitors, terminated the agreement purportedly pursuant to cl 25 (1). The respondents contended that such termination was wrongful, but accepted the same as wrongfully repudiating the contract and claimed for the work which they had done and materials supplied on a quantum meruit basis.
2 The dispute was referred to arbitration, the arbitrator being Mr H E Cashin. At the commencement of the arbitration it was agreed that as the matters submitted to the arbitration comprised several distinct issues, the first of which was whether the termination of the contract was lawful, the arbitrator should hear all the evidence, contentions and arguments of the parties in regard to that issue and should make an interim award. That interim award was made on 9 May 1979 and was in favour of the respondents in this appeal who, as previously stated, were the claimants in the arbitration. The arbitrator found that the appellants had not given the notices required by cl 25 (1) (c) and further, on the facts, the appellants had not established that the respondents failed to comply with their obligations under cl 25 (1) (c).
3 On 20 June 1979 the respondents applied to A P Rajah J for an order that the interim award be set aside or remitted to the arbitrator for reconsideration on the ground that it was ambiguous or unclear in that it only dealt with the appellants' liability under cl 25 (1) (c) and not with the appellants' liability under cl 25 (1) (a) or (b). The motion was contested, the respondents contending that the appellants had at the arbitration only relied upon cl 25 (1) (c). However, A P Rajah J ordered that the matter be remitted to the arbitrator:
… on the question of whether the respondents [the appellants] had made cl 25 (1) (a) and cl 25 (1) (b) of the building contract dated 15 November 1975 part of their case, and if so, the arbitrator do make his findings on the respondents' case under these clauses.
4 On 10 April 1980 Mr Cashin stated, with reasons, his finding namely that the appellants had relied only on cl 25 (1) (c). The matter came back before A P Rajah J on 8 June 1981 on a further motion by the respondents to set aside the interim award on the grounds, inter alia:
that the learned arbitrator had misconducted himself by showing bias against the plaintiffs [the appellants] and failing to observe the rules of natural justice during the remission hearing …
A P Rajah J set aside the award, but his decision was reversed by the Court of Appeal on 11 May 1984.
5 The issue raised by this appeal - to quote the words of para 2 of the appellants' case - “is whether the arbitrator misconducted himself by failing to observe the rules of natural justice during the remission hearing”. For the proper...
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