CYE v CYF

Facts

CYE, a Singapore energy trader, applied in HC/OA 642/2022 under s 48 of the Arbitration Act 2001 to set aside a Final Award made by a sole arbitrator in an SIAC arbitration seated in Singapore. The parties' identities and many details were anonymised.

CYF, the defendant, ran a petroleum storage terminal and was linked through common controllers to Co A, a trading company that later collapsed. CYE agreed with CYF to store gasoil at the terminal and, on the same date, bought gasoil from Co A to be transferred within the terminal. CYE received certificates on CYF's letterhead recording transfers of parcels to it, but, on CYE's evidence, the tanks named were emptied on Co A's instructions, and other parties later asserted competing claims to the product. CYF denied issuing or authorising the certificates. CYE terminated the storage agreement and began the arbitration, claiming breach of contract, fraudulent or negligent misrepresentation, conversion and detinue, negligence, and unlawful means conspiracy with Co A. The arbitrator dismissed all of its claims and allowed CYF's counterclaim for unpaid storage fees. He found, among other things, that the agreement did not require tanks to be kept for CYE's exclusive use, that CYF had not issued or authorised the certificates, and that no combination to defraud had been proved.

CYE said the arbitrator breached natural justice and that the award was induced by fraud and contrary to public policy.

Issues

1. Whether the arbitrator failed to consider CYE's arguments on an implied term, on vicarious liability for Co A's issue of the certificates, and on the combination between CYF and Co A.
2. Whether CYE was denied a reasonable opportunity to present its case on whether the company stamps on the certificates were in wet ink and on the apparent authority of CYF's directors.
3. Whether the award was induced or affected by fraud through concealment of documents or perjury, and so was contrary to public policy.

Holding

The High Court dismissed the application to set aside the award, rejecting every ground. Costs were to be heard separately, and the court directed that time for any appeal ran from the date of the judgment.

Reasoning

On the implied term, the court found that CYE had never pleaded or argued it as a standalone breach of contract. It was raised as part of the complaint that tanks had not been allocated for CYE's exclusive use and as one of the unlawful acts in the conspiracy claim; CYE's counsel accepted that its closing submissions in the arbitration had no separate section on breach of contract. By rejecting the exclusive-use obligation and finding no combination, the arbitrator had at least implicitly dealt with the term, and an issue may be implicitly resolved, as BLB and another v BLC and others [2013] 4 SLR 1169 holds. Any breach would also have caused no real prejudice. The vicarious liability argument was expressly decided by a fortiori reasoning: if the close connection test failed for the two directors, it failed more clearly for Co A. On the combination, framing the duty to inquire as one about the product's existence rather than title was not a failure to decide; the two questions were intertwined, and the arbitrator's basic difficulty was a lack of evidence of the alleged combination.

CYE bore the burden of proving the certificates genuine, and CYF had disputed their authenticity from the start, so the wet ink point was not a new defence and the case relied on, CAJ and another v CAI and another appeal [2022] 1 SLR 505, was distinguishable. The arbitrator's wording on apparent authority was at most infelicitous; he had decided the question put to him, and in any case found no evidence that the directors issued the certificates.

The fraud ground failed. The WhatsApp message relied on fell within none of the disclosure categories, had been disclosed in another suit, and could not have affected the outcome. The employee's evidence had not been shown to be false, and concealment of documents not shown to exist could not be proved. With no fraud, the public policy ground fell away. Remission did not arise, though the court criticised CYE's post-award questions about the arbitrator's CV.

From the judgment