COD v COE

Facts

COD, a Singapore company in the business of leasing, building and selling offshore vessels, engaged COE, a local fabricator of marine and offshore equipment, to build and deliver two fibre rope cranes under two contracts. COD terminated both contracts, saying the cranes did not meet the specifications, and refused delivery. COE started arbitration on 6 November 2015. In an interim award the tribunal held that although the cranes exceeded the weight specification, that did not justify termination. In the Final Award of 21 June 2021 it gave COE the balance price of the cranes less their resale value, taken as scrap value from the evidence of one of COE's witnesses, and gave COD damages for rectification costs and late delivery.

COD applied in Originating Summons No 925 of 2021 to set the award aside for breach of natural justice and failure to follow the agreed procedure. Before that hearing it had filed a summons (SUM 991) to adduce broker evidence that the cranes had market value, but its counsel withdrew it as a "judgment call" to avoid an adjournment. The application was dismissed and COD appealed in Civil Appeal No 32 of 2022. It then filed Summons No 22 of 2022 to adduce further evidence: broker emails from July to September 2022 offering the cranes for sale with indicative prices, and a surveyor's inspection report. COD said this showed COE had lied to the tribunal that the cranes were worth only scrap. COE denied this and said it had sold the cranes for scrap in August 2020 to a local buyer. The Court of Appeal dismissed both the summons and the appeal on 26 June 2023; these grounds concern the summons only.

Issues

1. Whether COD could adduce new evidence on appeal to run arguments it had not put to the Judge below, or whether the application was an abuse of process.
2. Whether the further evidence met the modified Ladd v Marshall test for evidence of matters arising after the decision below.
3. How far a court will admit fresh evidence on appeal in a challenge to an arbitral award on non-jurisdictional grounds.

Holding

The Court of Appeal dismissed the summons in limine as an abuse of process, and, for completeness, held that it would also have failed on the merits because the further evidence was not even potentially material. The appeal itself had already been dismissed at the hearing, the court affirming the Judge's refusal to set aside the award.

Reasoning

On the anterior issue, the court found the summons offended finality. COD had known before the setting-aside hearing of broker evidence suggesting the cranes had more than scrap value, yet chose to proceed without it after withdrawing SUM 991. The new emails concerned the same subject matter. Relying on UJN v UJO [2021] SGCA 18, the court held that a party will generally not be allowed to adduce fresh evidence on appeal to support a position inconsistent with the one it took below. The summons was an attempt to fill an evidential gap left by COD's own conduct, and new arguments not made to the Judge could not form the basis of the appeal.

On the merits, because the emails post-dated the decision below, the modified test from BNX v BOE and another appeal [2018] 2 SLR 215 applied. The court noted that on non-jurisdictional challenges Singapore courts are guarded about admitting evidence that goes to the tribunal's findings on the merits, though they may be more open where fraud or corruption is alleged. The evidence failed the materiality requirement. The emails showed only that a broker was offering the cranes for sale with indicative prices, not that a market existed. The tribunal had found that COD had ample opportunity to challenge COE's scrap-value evidence and did not. The breach occurred in 2015, while the broker's figures related to 2022. There was no evidence the broker acted for COE, and what later buyers did with the cranes said nothing about COE's good faith in the arbitration. The suggestion that COE lied to the tribunal was at best speculative.

From the judgment