DKT v DKU

Facts

DKU, which provided electricity transmission services through a network of buildings in Singapore, engaged DKT under two term contracts to maintain them, including crack repairs. Between 2012 and 2016 DKT submitted at least 278 claim forms for grouting works it had allegedly carried out. In 2018 DKU had a consultancy firm sample-test the works, which found them incomplete or not done by the agreed method. Relying mainly on the expert report of the firm's managing director, Mr K, DKU began arbitration. The tribunal accepted that report, found that in at least 246 instances DKT had charged for crack repairs that were not needed, and awarded DKU around $2m.

DKT applied under s 48(1) of the Arbitration Act 2001 in Originating Application No 844 of 2024 to set the award aside for breach of natural justice. A judicial commissioner dismissed the application, and DKT appealed in Civil Appeal No 73 of 2024. Three complaints remained: that the tribunal ignored some pleaded defences, that it failed to consider Mr K's admission that he took five core samples from the wrong places, and that it reasoned on that admission in a way DKT could not reasonably expect.

Issues

1. Whether the tribunal failed to consider DKT's pleaded defences
2. Whether the tribunal failed to apply its mind to Mr K's admission about the wrong core samples
3. Whether the tribunal's chain of reasoning on the core samples breached the fair hearing rule
4. Whether indemnity costs should be awarded against DKT

Holding

The Court of Appeal dismissed the appeal and upheld the award. It awarded DKU indemnity costs of $70,000.00, made the usual consequential order for payment out of the security for costs, and allowed disbursements of $3,349.88.

Reasoning

The court set out four conditions for an infra petita challenge: the point was properly put to the tribunal, it was essential to the dispute, the tribunal completely failed to consider it, and real prejudice followed. The question is whether the tribunal considered the point at all, not how well it did so; only an analysis so cursory that it leads to a clear and virtually inescapable inference of non-consideration could qualify. The court also said the judge below had examined the arbitral record in more detail than was needed, which risks encouraging award debtors to burden courts with the record.

On the pleaded defences, although the tribunal said at one point that it need not deal with defences not pursued in closing, it went on to reduce them to their factual premises and find no evidence for them. That was consideration, and adequacy was not the court's concern.

On the core samples, the tribunal had treated them as only the final bit of proof and was satisfied on all the evidence, even with the sampling rejected, that the breaches were proved. Whether it was right did not matter.

On the chain of reasoning, manifest incoherence is not a ground by itself and must tie back to a breach of a rule of natural justice. The tribunal had simply accepted DKU's answer to DKT's own natural justice argument, which could not have surprised the parties.

On costs, cl 24.1.1 of both contracts required DKT to indemnify DKU for legal costs arising directly or indirectly from its breaches, and DKT gave no reason why enforcing that bargain would be manifestly unjust.

From the judgment