Anwar Siraj and Another v Ting Kang Chung and Another

[1] This Originating Motion sought the following orders:

[2] The application was originally brought under section 16 of the Arbitration Act 2001. The arbitrator’s counsel pointed out that the arbitration commenced before 1 March 2002 (the date the Act of 2001 came into operation) and the applicable law ought to have been the Act that was in force immediately before that date. This was because section 65 of the Act of 2001 provides that the Act of 2001 would not apply to arbitrations commenced before 1 March 2002 unless the parties in question have so agreed in writing. The Applicants have acknowledged their error and accepted the arbitrator’s position as correct.

[3] The Applicants are the owners of a house at 2 Siglap Valley. They contracted with the Second Respondent to demolish and reconstruct the said house for the sum of $1.2 million. The agreement was signed on 30 December 1999 and the completion date for the project was 9 January 2001. The contract was the standard one used by the Singapore Institute of Architects (“SIA”) and provided that in the event of a dispute, it shall be referred to arbitration. If the parties to the arbitration could not agree on an arbitrator, the President of the SIA would appoint one for them.

[4] A dispute did arise around July 2001 and the Second Respondent referred it to arbitration. The President of the SIA subsequently appointed the First Respondent as the arbitrator.

[5] The First Respondent convened a meeting of the parties on 11 March 2002. At that meeting, directions were given for the filing of the Points of Claim, Points of Defence and Counterclaim, Points of Reply and Defence to Counterclaim.

[6] On 14 March 2002, the arbitrator attended a site meeting with the parties and the alleged defects were pointed out to him. By 11 June 2002, the pleadings as directed were filed. The Applicants then applied to file a Statement of Reply regarding the Counterclaim and were permitted to do so. The parties were also directed to exchange documents by 25 June 2002.

[7] In their pleadings, the Applicants claimed that the alleged shoddy workmanship caused delamination of tiles, water seepage, flooding of the basement, dampness on the walls and other serious defects. As a result of these alleged problems, they emphasised in a letter written by their solicitors to the arbitrator on 12 June 2002 that the hearing should be conducted as early as possible. Although the arbitrator had stated in his letter of 10 June 2002 that he would convene a meeting on a convenient date, nothing was heard from him after the Applicants’ solicitors’ letter of 12 June 2002. They then wrote to the arbitrator again on 31 July 2002 and on 15 August 2002 to ask that a meeting be convened. They did not receive any response from him. The convening of such a meeting for directions was becoming critical as the Second Respondent refused to carry out any rectification works unless directed to do so by the arbitrator. The Applicants listed various other correspondence to the arbitrator requesting meetings on different matters to which no response was obtained. These letters covered the period between 12 June 2002 (when the letter mentioned above was sent) and 7 November 2002 (when letters were sent enquiring about the specific issues on which the arbitrator was seeking expert advice and the name of the expert in question).

[11] On 30 October 2002, the Applicants wrote to the arbitrator to enquire about the outcome of the said applications. They were surprised to receive a letter dated 31 October 2002 from him stating that he had faxed the parties a letter on 11 October 2002 as neither party had received that letter. The letter of 11 October 2002 read:

Please be informed that I will need to consult an expert to advise on the quantum of a security for costs and damages.

It appeared to the Applicants that the arbitrator had decided on awarding security for costs and damages and needed advice only on the quantum.

[12] They were further puzzled by another letter dated 30 October 2002 from the arbitrator in which he stated:

The Applicants wrote to the arbitrator to ask him whether counsel could assist him in any difficulty he may have on procedural matters, drawing his attention to the fact that expert assistance was sought only on specific issues. They were concerned that the costs of the arbitration would increase with the addition of an expert.

[15] The Applicants argued that the fact that the arbitrator had not set out his qualifications and experience as an arbitrator meant that he possessed none. If he had attended any of the courses on arbitration law and practice conducted by the Singapore Institute of Arbitrators and the London based Chartered Institute of Arbitrators, he would not have committed the blunders complained of nor displayed such “utter incompetence”.

[18] The First Respondent is the current President of the SIA. He was appointed the arbitrator here on 12 December 2001 and held a preliminary meeting on 11 March 2002 at which directions for the filing of pleadings were given. After the exchange of pleadings, he issued directions by a letter dated 10 June 2002 on the exchange of the list of documents by 25 June 2002. That date was subsequently extended to 9 July 2002. Around this period, the parties to the arbitration started exchanging correspondence concerning the manner in which the Second Respondent had prepared its list of documents. Some letters were sent to the arbitrator setting out the Applicants’ dissatisfaction with the list but no specific application for relief was contained in those letters.

[19] A second preliminary meeting was held on 29 August 2002. Further directions were given for the Second Respondent to provide copies of all its documents to the Applicants upon payment of photocopying charges. This would have taken care of the Applicants’ complaints about the difficulty in identifying the documents in the Second Respondent’s list. The Applicants’ solicitors’ letter the next day recorded the directions given without raising any complaint that the arbitrator had refused to deal with any particular issue. Several other letters were written in September 2002 by the said solicitors without any such complaint.

[22] On 1 October 2002, he promptly wrote to the parties about his available dates in November of that year. After hearing from the parties’ solicitors on their available dates, he notified them on 9 October 2002 that the first set of hearing dates would be for three days between 20 and 22 November 2002. On 12 November 2002, he notified the solicitors of his available dates in December 2002 for the other two days of hearing required.

[23] Although several letters were written by the solicitors and by the First Applicant between 1 and 10 October 2002, no complaints were made therein. It was only in the First Applicant’s letter of 28 October 2002 that he began to refer to the earlier letters saying that “critical” matters needed to be discussed/resolved immediately without specifying what he was applying for.

[24] On 13 November 2002, the arbitrator wrote to invite the First Applicant to state clearly the outstanding matters that he wanted dealt with and to inform him that he could raise them at the commencement of the hearing proper on 20 November 2002 if he wished.

[25] Given the contentious nature of the proceedings, the arbitrator indicated he would seek legal advice on procedural issues, something permitted by Article 10.3 of the SIA Arbitration Rules. Article 5.1 of the said rules provided that the arbitrator had the widest discretion allowed by law to ensure the economical and final determination of the dispute but did not impose a duty to ensure that the proceedings be carried out in the most economical way possible.

[27] The Applicants’ objections to the Second Respondent’s expert for the site inspection were in fact made known to the arbitrator. That was why he replied in his letter of 4 July 2002 that he did not see why the presence of the expert should be objectionable as he would be an expert witness in the dispute. The expert could be cross-examined at the hearing. The arbitrator’s decision not to make another site inspection was something within his prerogative. The parties could adduce evidence of the defects at the hearing proper in any event.

[28] An arbitrator was not obliged to convene a meeting every time one was requested by one of the parties. It was within his discretion to decide that certain interlocutory matters could be dealt with at the hearing proper instead of convening unnecessary meetings which would lead to wastage of time and increased expenditure.

[30] The arbitration hearing was scheduled to take place between 20 and 22 November 2002. This Originating Motion was filed on 20 November 2002. The Applicants’ complaints could have been raised and dealt with at the scheduled hearing. Their subjective conduct showed that no serious grounds existed for them to say that their confidence in the arbitrator’s ability to conduct the proceedings fairly or competently had been destroyed.

[31] The Applicants moved into the property in issue since April 2001. The arbitrator was appointed by the President of the SIA on 12 December 2001 after the parties could not agree on an arbitrator. A fee of $2,000 was required to be paid to the arbitrator. The Second Respondent paid its half share on 28 December 2001 and sought a meeting with the arbitrator for directions on preliminary matters. However, the Applicants did not pay their share. On 30 January 2002, the Second Respondent paid the other half share. A preliminary meeting was then held on 11 March 2002.

[32] The site inspection was held on 14 March 2002. All pleadings were exchanged by 11 June 2002. The Second Respondent did request a two-week extension of time to file its list of documents. The arbitrator granted the request and the Second Respondent complied within the extended time frame. Following discovery of documents, affidavits of evidence-in-chief were exchanged by 5 October 2002. On 9 October 2002, the first set of hearing dates was confirmed. There was therefore only a period of about eight months between the first meeting and the hearing dates. About a week before the hearing was to commence on 20 November 2002, the Applicants informed all concerned that they would be taking out the present application in Court and warned the arbitrator not to proceed further or face injunction proceedings.

[34] The bundles of documents were filed properly. The Second Respondent’s solicitors had earlier requested the Applicants to identify the documents they were complaining about so that they could look into the complaints but no details were received from the Applicants except for six documents for which the Second Respondent rendered an explanation. The direction that the Applicants serve their bundle of documents on the Second Respondent was due to the fact they had served a copy thereof on the arbitrator without serving a copy on the other party. There were no fictitious documents. Final Account and Final Claim documents were completed on 27 September 2002 and therefore bore that date. The arbitrator had to settle the Final Account in the dispute.

[35] The Applicants’ requests for meetings were not accompanied by a clear indication of their purpose or the remedies sought. The arbitrator did not shut them out in any event as shown by his letter of 13 November 2002 inviting them to identify the critical matters to be addressed and the specific applications they wished to make, with such applications being submitted at least one day before the hearing proper.

[37] Between October 2001 and January 2002, the parties were involved in a series of Court proceedings in which the Second Respondent was seeking an injunction against payment on its performance bond. Many affidavits had to be prepared and studied. Because of such distraction, the Second Respondent overlooked the initial payment of $515 due to the SIA.

[40] “Misconduct” is “such a mishandling of the arbitration as is likely to amount to some substantial miscarriage of justice” [Halsbury’s Laws of England (4 Edition Reissue) Volume 2, paragraph 694]. The nature of such mishandling is a question of fact and of degree and depends on the circumstances of the case. However, making an erroneous finding of law or of fact or making procedural errors by themselves do not amount to misconduct.

[41] The arbitrator is, subject to any procedure otherwise agreed between the parties as applying to the arbitration in question, master of his own procedure and has a wide discretionary power to conduct the arbitration proceedings in the way he sees fit, so long as what he is doing is not manifestly unfair or contrary to natural justice (see the Handbook of Arbitration Practice, 3 Edition). A subjective lack of confidence in the arbitrator by one party is not a sufficient ground to remove him. The test is an objective one and there must exist real grounds for which a reasonable person would think there is a real likelihood that the arbitrator could not or would not fairly determine the issue on the basis of the evidence and the arguments to be adduced before him [Hagop Ardahalian v Unifert International S.A. (The ‘Elissar’) [1984] 2 Lloyd’s Rep 84].

[42] It is therefore plain that the Court’s supervisory role is to be exercised with a light hand and that arbitrators’ discretionary powers should be circumscribed only by the law and by the parties’ agreement.

[43] Looking at the complaints raised by the Applicants, it was clear that any allegation relating to the lack of impartiality on the part of the arbitrator was wholly misplaced. The fact that an arbitrator seems to be constantly ruling in favour of one party is equally consistent with the merits being on that party’s side. The Applicants must show that his decision was likely to have been coloured by something which should have no part at all in a fair decision-making process. Taking bribes and having a personal interest in the outcome of the proceedings would be obvious and extreme examples. It appeared to me that the arbitrator was completely above board in all his dealings with the parties. I accepted that there was nothing sinister in his receiving a copy of the judgment in question and that there was no secret communication between him and the Second Respondent. It was a Court document known to the parties anyway and not some one-sided piece of information slipped surreptitiously into the mind of the arbitrator.

[45] “Reasonable dispatch” is also a matter of degree to be determined according to the particular facts of the case. While the lack of response between the Applicants’ letters of 12 June 2002 and of 15 August 2002 was somewhat puzzling, the overall picture showed the arbitration process was proceeding on an even keel and at a reasonable speed, considering its very contentious nature. Again, an arbitrator who moves the proceedings along at a breakneck speed may well be accused of misconduct in subordinating fairness to speed.