DOM v DON

DOM was the main contractor for addition and alteration works to a 4-storey factory building owned by DON, under a contract on the SIA Lump Sum Conditions. DON took possession at the beginning of 2017, and disputes followed. DOM referred them to arbitration on 31 January 2018, claiming for variation orders among other things; DON counterclaimed for delay and for the cost of rectifying defects through other contractors it appointed. In an interim award amended on 12 September 2024, the tribunal awarded DOM S$704,124.10 for its variation orders and DON S$4,926,848.16 for defects, including S$985,981.62 in consultants' fees, each with interest at 5.33% a year.

In Originating Application No 1285 of 2024, DOM applied to set aside parts of the award covering consultants' fees, timber decking, plaster, doors, the garment care area and roof waterproofing, ducting, toilets and painting, and the pre-award interest. It relied on breach of natural justice, on fraud in relation to the timber decking, and on public policy. DON opposed the application and asked, in the alternative, for any affected portion to be remitted to the tribunal.

1. Whether the tribunal breached natural justice by awarding 50% of consultants' fees it had found unexplained or unnecessary
2. Whether the tribunal's percentage apportionments and treatment of the various defect claims were unforeseeable, incongruent or made without applying its mind
3. Whether the timber decking award was induced or affected by fraud
4. Whether the pre-award interest breached natural justice or public policy, and whether set-aside portions should be remitted

A setting-aside court reads awards generously and does not review the merits; errors of fact or law, and an inadequate statement of reasons alone, are not grounds. A chain of reasoning challenge succeeds only if a reasonable litigant could not have foreseen the reasoning.

On consultants' fees, following Sandy Island it was foreseeable that the tribunal might accept fees supported only by invoices if it found the engagement reasonable and necessary. But for the project manager, the M&E engineer and the structural engineer, the tribunal had effectively found their services unnecessary or not shown to relate to the rectification works, yet still awarded half. Following CEF and another v CEH [2022] 2 SLR 918, no reasonable litigant could have foreseen that, and DOM was prejudiced. Remission was refused because a reasonable person would lack confidence in a fair reconsideration and the result would logically be the same. For the contract administrator and quantity surveyor, whose necessity was not doubted, apportionment was a foreseeable middle path drawn from DOM's own argument about overlapping hours.

The defect complaints failed. The 10% reductions for timber decking and external plaster flowed from competing causes the parties had argued, and the same figure did not show the tribunal failed to apply its mind. The tribunal did deal with the internal seepage item, the doors, the pro-rated garment care area and the warranty argument; DOM's points on the roof valuation and paint were at most errors of fact, or mistakes in its favour. The expert's statement that the decking manufacturer was out of business was not shown to be meant to deceive, so fraud failed. DON had pleaded interest, so DOM had notice, and DOM abandoned the public policy point.

The High Court allowed DOM's application in part. It set aside the portions of the award granting DON S$127,151.50, S$87,475.00 and S$32,500.00, being 50% of DON's claims for the fees of the project manager, the M&E engineer and the structural engineer, and declined to remit them. It dismissed the application to set aside all other portions of the award, including the pre-award interest, and directed costs submissions.