CYY v CYZ

Facts

CYY and CYZ are companies in the marine salvage industry. On 24 December 2019 CYY was engaged to salvage a vessel that had run aground, and its salvage master, Mr X, approached CYZ's managing director, Mr Y, to charter CYZ's crane barge as an offshore command centre for the operation. The parties signed a charter dated 3 January 2020 on the BIMCO Supplytime 2017 form, governed by Singapore law with an arbitration clause seated in Singapore covering any dispute arising out of or in connection with the charter. They added clause 39, whose second sentence provided that all procurement services by the owner at the charterer's request would be charged at cost plus 15%.

During the operation CYZ procured services, personnel, equipment and craft at CYY's request, and invoices with a 15% markup were signed by Mr X. When CYY did not pay, CYZ began arbitration on 6 July 2021, claiming under clause 39 or alternatively on a quantum meruit. CYY objected that clause 39 covered only procurement for the charter of the barge itself, not the salvage operation generally, so the tribunal had no jurisdiction. The tribunal ruled on 31 August 2022 that it had jurisdiction. CYY applied in Originating Application No 624 of 2022 under s 10(3)(a) of the International Arbitration Act 1994 for a declaration that the tribunal lacked jurisdiction.

Issues

1. Whether the interpretation of clause 39 went to the tribunal's jurisdiction or to the admissibility of the claims.
2. Whether clause 39 covered procurement services for the salvage operation generally or only for the charter of the barge.
3. Whether the court should decide the tribunal's jurisdiction in the owner's favour.

Holding

Philip Jeyaretnam J dismissed CYY's application and held that the tribunal had jurisdiction over the disputed claims. Parties were directed to exchange costs submissions, limited in length, within 14 days, and to try to agree costs within 7 days after that, failing which either could ask for a hearing.

Reasoning

The court noted that a review under s 10(3)(a) is de novo, but that the court must guard against substantive challenges dressed up as jurisdictional ones. Once CYY accepted that a binding arbitration agreement existed, whether CYZ's claims fell within clause 39 was part of the dispute referred to the tribunal. The judge used the example of a contract for English apples: an arbitrator who picks one of two possible readings of the description of the goods is deciding exactly what was submitted, not exceeding her power. Drawing on Swissbourgh Diamond Mines (Pty) Ltd and others v Kingdom of Lesotho [2019] 1 SLR 263, the court held that the objection was aimed at the claim, not at the tribunal's authority, and so was a matter of admissibility.

Because counsel and the tribunal had treated the point as jurisdictional, the court also addressed the interpretation. CYY had no direct evidence of the negotiations, since Mr X now gave evidence for CYZ after his relationship with CYY broke down. CYY relied on a broker, Mr Z, but his own affidavit showed he only finalised the contract and accepted clause 39 subject to Mr X's agreement; late suggestions that Mr Z led the negotiations or that Mr X lacked authority were unsupported. The urgency, CYY's reliance on a local operator, and the barge's role as command centre supported the wider reading.

On the text, nothing restricted the word "all"; the limit was that services had to be requested by the charterer, and the two sentences of clause 39 were independent. The court agreed with the tribunal's reading. Whether every invoiced item was recoverable was a merits question for the tribunal.

From the judgment