WAN SERN METAL INDUSTRIES PTE LTD v HUA TIAN ENGINEERING PTE. LTD.

Parties

Procedural Posture

Civil Appeal (setting Aside Arbitral Award) / Court of Appeal Judgment on Appeal From High Court

Legal Issues

1. 1 Whether the arbitrator breached natural justice by deciding an unpleaded Expectation Damages Issue without appreciating parties' positions in a documents-only arbitration
2. 2 Whether the arbitrator exceeded the scope of the submission to arbitration by deciding unpleaded issues
3. 3 Whether the arbitrator acted in breach of the agreed arbitral procedure by deciding issues outside the agreed list of issues

Ratio Decidendi

The arbitrator breached natural justice by failing to appreciate that the respondent had advanced an unpleaded Expectation Damages Issue in written submissions and by failing to clarify or require amendment given the documents-only expedited context, resulting in actual prejudice; accordingly the Court set aside the Award insofar as it concerned the Balance Work Counterclaim and declined to remit that issue to the arbitrator given the late and tactical introduction of the unpleaded claim.

Court Disposition

Appeal allowed in part; Award set aside insofar as the Balance Work Counterclaim; remainder of Award upheld

Orders

• Award set aside insofar as it concerns the Balance Work Counterclaim
• Parties to file and exchange written submissions on costs, limited to six pages each, within 21 days of judgment if costs not agreed