DEM v DEL

Facts

Under a Business Purchase Agreement (BPA) dated 4 January 2019, the respondent, W Co, bought a franchised enrichment centre for $200,000 from the appellant Mr X, Ms Y and her company Z Co, who were listed as sellers. Mr X gave a Tampines address and a personal email address in the BPA's notices clause. W Co later alleged that the sellers had diverted clients and staff, misappropriated curriculum and misrepresented the business's revenue. After an attempt to consolidate claims under several agreements failed, W Co filed a notice of arbitration under the BPA with the SIAC on 14 August 2020, claiming misrepresentation against all three and breach of restrictive covenants against Mr X. Around this period Mr X had stopped being represented and stopped participating.

W Co settled with Ms Y and Z Co. Right after the hearing on 8 September 2021, the arbitrator received an email from an unfamiliar address claiming to be from Mr X; requests to verify the sender went unanswered, and the arbitrator proceeded. The award, published on 27 April 2023, found for W Co on all its claims. When W Co moved to enforce, Mr X reappeared and applied under s 48 of the Arbitration Act 2001 to set aside the award. The High Court judge dismissed the application, and Mr X appealed in Civil Appeal No 24 of 2024.

Issues

1. Whether the appellant had proper notice of the arbitration
2. Whether a party who chose not to participate could challenge the award on the ground that the arbitrator failed to consider whether the BPA lacked consideration
3. Whether there was any breach of natural justice

Holding

The Court of Appeal dismissed the appeal with costs fixed in the aggregate sum of $50,000, with the usual order for payment out of security. It made no order on a late application by the respondent to adduce further evidence, and found it unnecessary to decide the respondent's time bar objection.

Reasoning

On notice, the court explained that service of the notice of arbitration is not an end in itself; what matters is whether the party had actual or deemed notice that gave a full opportunity to take part. Mr X had actual notice by his own admission, since he wrote to the arbitrator on 8 September 2021. It was prudent to verify an email from an address unlike his name, and his failure to respond confirmed that he chose not to participate. He also had deemed notice: the notices clause allowed delivery to the Tampines address and the email address he gave. His explanations, that the flat was let to a tenant and that police had advised him to log out of his email, did not prove non-receipt; the court found he knew the tenant and was never prevented from accessing his own email.

On the alleged failure to consider, the court held that infra petita challenges are better treated as natural justice challenges and not under Art 34(2)(a)(iii) of the Model Law, which addresses only tribunals exceeding their mandate. Differing from the judge, it found the arbitrator had not in fact addressed the lack of consideration point. But a party who elects not to participate, files no pleadings and so never raises an issue cannot later complain that the tribunal failed to decide it; that would be hedging of the most egregious form.

In any event there was no prejudice. The promises being enforced were Mr X's restrictive covenants, so consideration had to move from W Co, the promisee, though not to him. W Co's payment of $200,000 to Ms Y was sufficient, and the point would have made no difference. The remaining natural justice complaints depended on the failed grounds.

From the judgment