CWP v CWQ

Facts

CWP, a construction company in the anonymised country of Ruritania, sub-contracted dredging works at Ruritania City Port to CWQ, a marine engineering company, by a contract dated 12 May 2017 governed by English law, with SIAC arbitration seated in Singapore. CWQ was to deploy a hopper dredger, a cutter suction dredger and two split hopper barges and finish within 90 days of 26 May 2017. Article 3.9 entitled CWQ to an extension of time and compensation at standby rates for stoppages, except for mechanical breakdown, reasons attributed to CWQ, or its negligence or misconduct. CWQ finished on 26 August 2017, two days late.

CWQ claimed compensation for several stoppages, including a delay in getting import permits for the barges (which began with CWP wrongly telling CWQ that a National Security Clearance was not needed; the clearance was obtained only on 23 June 2017, and customs duties were paid on 12 July 2017) and the evacuation of vessels to avoid a typhoon. In a final award dated 4 May 2022, the majority of a three-member tribunal held that Art 3.9 entitled CWQ to compensation whether or not a stoppage delayed completion, and allowed the claims. The presiding arbitrator dissented. In Originating Application No 419 of 2022, CWP applied to set aside that part of the award under Art 34(2)(a)(iii) of the Model Law and s 24(b) of the International Arbitration Act 1994, alleging excess of jurisdiction and breach of natural justice.

Issues

1. Whether the majority's interpretation of Art 3.9 went beyond the scope of the submission to arbitration or was reached without considering CWP's arguments.
2. Whether the decision on the import delay claim, based on a flow on effect from the security clearance delay, exceeded jurisdiction or breached the fair hearing rule.
3. Whether the decision on the typhoon claim was made in breach of natural justice.

Holding

S Mohan J dismissed CWP's application in its entirety, finding no merit in any of its grounds. Costs were to be dealt with separately.

Reasoning

The court stressed party autonomy and minimal curial intervention. A tribunal's failure to consider an argument can be inferred only where the inference is clear and virtually inescapable, and even a proven breach must cause real prejudice.

On interpretation, CWP relied on the dissent's view, based on TYN Investment, that CWQ's use of the word "demurrage" in its notice of arbitration limited its claim to delay beyond the completion date. The court found that reliance misplaced: the scope of submission is judged from the pleadings, agreed issues, openings, evidence and closing submissions taken together. The statement of claim, CWP's own defence and the agreed list of issues all showed the point was live, and CWP never objected. The majority had summarised and distinguished CWP's prevention principle and commercial sense arguments; it simply held the clause's plain words decisive, with its comments on commercial sense being incidental. Any lapse would have made no difference.

On the import delay claim, the security clearance delay had been pleaded from the start. CWP had more than a year after the opening statements to seek discovery and did not. The majority set out and dealt with CWP's arguments about the agents' delays and its own indulgence, finding the stoppage was not attributable to CWQ. Its flow on effect reasoning followed reasonably from the arguments and caused no prejudice.

On the typhoon claim, the majority considered whether the force majeure clause covered a typhoon and disagreed with CWP, also finding the clause inapplicable because no party had failed to meet a contractual requirement. The point about an unexplained day before work resumed was never raised in the arbitration and was an opportunistic use of the dissent. Each complaint was, in substance, an appeal on the merits.

From the judgment