DBL v DBM [2023] SGHC 267

Introduction

The claimant, [DBL], applied to set aside the award made in Singapore Chamber of Maritime Arbitration (“SCMA”) Arbitration No [xxx] (“the Arbitration”) in the defendant’s ([DBM]’s) favour on the ground that the rules of natural justice had been breached. The award was issued on 13 April 2022 and corrected and delivered to the parties on 28 October 2022 (“the Award”).

[DBL]’s complaint was that:

(a) it was not afforded a reasonable and fair opportunity to present arguments in respect of a demonstration made by [DBM]’s counsel during closing arguments, which demonstration was in breach of a hearing protocol issued by the tribunal (“the Tribunal”) and improperly introduced extraneous evidence; and

(b) the Tribunal failed to consider or apply its mind to two defences raised by [DBL].

I dismissed [DBL]’s application. [DBL] has filed an appeal and I issue these grounds to explain my decision.

Background

Under a written sales contract (“the Sales Contract”), [DBL] agreed to sell 19,600mt (plus/minus 10%) of prime steel slabs (“the Goods”) to [DBM]. The total contract value was expected to be US$9,074,800 (at a unit price of US$463.00/mt). The Sales Contract expressly specified that the goods were to be loaded at “any Port from K.S.A. [ie, the Kingdom of Saudi Arabia (“KSA”)]”.

The Sales Contract was governed by English law and provided for arbitration in Singapore in accordance with the arbitration rules of the SCMA for the time being in force at the commencement of arbitration.

The Goods were loaded on the M/V [FP] (“the Vessel”). On the face of the Bill of Lading No [xxx] (“B/L”), the Goods were loaded at “Dammam Port, Kingdom of Saudi Arabia” on 19 September 2023. The notify parties on the B/L were [FD] Bank (ie, [DBM]’s bankers), [DBM], and [GLK] (ie, [DBM]’s parent company).

On 19 September 2013, [DBL] invoiced [DBM] for the sum of US$9,922,152.97 (“the Purchase Price”), and [FD] Bank released the Purchase Price to [DBL] under a letter of credit.

A dispute subsequently arose between the parties over where the goods were loaded – [DBM] alleged that the Goods were loaded in Iran (which was a jurisdiction subject to sanctions), and therefore, [DBL] had breached the Sales Contract. On 24 September 2013, [FD] Bank wrote to [DBM] stating that they were “informed by [their] sources” that the Vessel arrived at Bandar Abbas, Iran, on 21 September 2013, and that they “suspect that [the Goods] were loaded in Bandar Abbas” and not Dammam Port, KSA.

In the circumstances, [DBM] requested [DBL] to issue an “indemnity letter” to be submitted to [FD] Bank, a draft of which was provided by [DBM]. On 24 September 2013, [DBL] provided [DBM] with an “Indemnity Bond” (“the Bond”). The Bond expressly stated that it would “form part and parcel of the Sales Contract”. By way of the Bond, [DBL] confirmed that:

(a) the Goods would originate from the KSA and be loaded from Dammam Port;

(b) if the bankers or the relevant authorities were not satisfied with the documentation in relation to the Goods, then the Sales Contract shall be terminated with all payments received refunded to [DBM] (“the Dissatisfaction Clause”);

(c) in the event the Goods did not originate from the KSA and the documents provided were not to the satisfaction of the bankers and authorities, the Sales Contract would stand terminated and all payments received would be refunded by [DBL]; and

(d) [DBL] undertook to indemnify [DBM] for all costs and losses incurred by [DBM] consequent to such termination.

On 29 September 2013, [DBM] wrote to inform [DBL] that it was “cancelling the [Sales Contract]” and requested reimbursement of the Purchase Price.

On or about 26 October 2013, [DBL] agreed to remit US$500,000 to [DBM]. Concurrently, [FD] Bank demanded that [DBM] repay the sums it had paid to [DBL]. On 17 February 2014, [FD] Bank debited these monies from [DBM]’s bank account. As [DBM]’s bank account did not have sufficient funds, it was placed in an overdraft and [FD] Bank charged [DBM] a penalty interest. As at March 2014, [DBM] claimed that the principal amount owed by [DBL] was US$9,422,177.97 (“the Outstanding Amount”).

In April to May 2014, [DBM] and [DKL], a company under the [GBM] Group of companies, finalised an agreement for the purchase of nickel from [GBM] Group by [DBM]. In June 2014, [GBM] Group requested that the agreement be revised for the role of the seller to be assumed by [DBL] (which was closely associated with the [GBM] Group), so that [DBL] could supply nickel to [DBM] to set off the Outstanding Amount. The agreement for the purchase of nickel was thus revised and executed by [DBL] and [DBM] (“the Nickel Purchase Agreement”). Pursuant to the Nickel Purchase Agreement, [DBL] agreed to supply 500mt of nickel to [DBM].

On 25 July 2014, [DBM] and [DBL] executed an Addendum to the Nickel Purchase Agreement (“the Addendum”) which, amongst other things, recorded that:

The parties then agreed on certain adjustments with respect to the value of nickel supplied. Adjusting the Outstanding Amount against the agreed purchase price of the nickel, it was [DBM]’s position that the new outstanding amount owed by [DBL] was US$4,683,418.77 (“the New Outstanding Amount”).

On 31 October 2015, [DBM] requested that [DBL] confirm the New Outstanding Amount. [DBM] also requested that if [DBL] disagreed with the figure, [DBL] was to send a statement of account to [DBM] to enable it to reconcile the figures.

On 26 November 2015, [DBL] provided a signed and stamped confirmation (“the First Balance Confirmation”) that the sum it owed [DBM] was US$4,610,707.65 (ie, the New Outstanding Amount less US$72,711.12). [DBL] did not provide any statement of account explaining the revised figure.

After multiple requests for payment, [DBM] sent another letter on 10 April 2017, again requesting [DBL]’s confirmation that it owed [DBM] the New Outstanding Amount. [DBL] provided a signed and stamped confirmation that the net principal sum of US$4,610,707.65 was due to [DBM] (“the Second Balance Confirmation”). [DBL] similarly did not provide any statement of account to support this revised figure.

Ultimately, [DBL] did not make any payment to [DBM].

The Arbitration

On 24 July 2020, [DBM] commenced arbitration proceedings against [DBL]. The parties’ pleadings were prolix and somewhat confusing. In essence, and material to this application, [DBM] sought, inter alia, the following reliefs:

In both cases, the pleaded breach was that the Goods were loaded at the port of Bandar Abbas in Iran. [DBM] claimed to be entitled to the New Outstanding Amount. With respect to the principal claim, [DBM] sought, in addition, certain other losses, including the loss of revenue on the forward sale of the Goods and the penalty interest imposed by [FD] Bank.

[DBM] further pleaded that its claim was not time-barred because the limitation period had been extended on account of various acknowledgements by [DBL] in:

and these acknowledgments (“the Acknowledgments”) met the requirements of the Limitation Act 1980 (c 58) (UK) (“the English Limitation Act”).

[DBM]’s claims were denied by [DBL]. In [DBL]’s defence, [DBL] asserted that:

Prior to the evidentiary hearing, the Tribunal issued an agreed hearing protocol (“the Hearing Protocol”) setting out the procedural steps parties had to take leading up to the evidentiary hearing in the Arbitration (“the Arbitration Hearing”). Amongst other things, the Hearing Protocol expressly provided that:

Prior to the Arbitration Hearing, [DBL] adduced a document titled “Vessel Finder Port Movements report” (“the Vessel Finder Report”). The Vessel Finder Report purported to set out the coordinates of the Vessel at various dates and points in time for the period of 1 September 2013 to 31 October 2013 (“the Period”). It did not have the Vessel’s coordinates for 19 September 2013, but did for the morning of 20 September 2013.

The Arbitration Hearing was held on 18 and 19 October 2021. During oral closing submissions, [DBM]’s counsel extracted data from the Vessel Finder Report, plotted them together with (a) the coordinates of Dammam Port; and (b) the maximum speed of the Vessel throughout the Period (15 knots), into a website known as the “Searoutes Website”. The Searoutes Website has an application by which coordinates of two points can be entered and a route (via sea) between the two points will be suggested.

By doing so, [DBM] submitted that it was not possible for the Vessel to have been at Dammam Port on 19 September 2023: Dammam Port was 1,261km from the Vessel’s position on the morning of 20 September 2023 – even if the Vessel had travelled from Dammam Port at the maximum speed of 15 knots, it would have taken 45 hours at the minimum to reach that position.

The Award

The Tribunal largely found in [DBM]’s favour. In particular, it held that:

The Tribunal declined to grant [DBM] damages for the other claimed losses, including the loss of revenue on the forward sale of the Goods or the penalty interest charged by [FD] Bank, as it found these too remote.

[DBL]’s case

[DBL] relied on s 24(b) of International Arbitration Act 1994 (2020 Rev Ed) (“the IAA”) to set aside the Award. Section 24(b) reads:

[DBL]’s case was that there was a breach of natural justice in two respects:

(a) first, the Tribunal allowed [DBM] to introduce evidence via its demonstration using the Searoutes Website during its closing submissions (“the Searoutes Demonstration”), which [DBL] had no opportunity to respond to, and which demonstration contravened the Hearing Protocol;

(b) second, the Tribunal failed to consider its defences of time bar and the unenforceability of the Bond.

I elaborate on the first ground below, the second being self-explanatory.

The first ground concerned the issue of the Vessel’s location on 19 September 2023, the date the Vessel was allegedly at Dammam Port, KSA, being loaded with the Goods.

The relevant extract of [DBM]’s counsel’s oral submissions at the Arbitration Hearing is reproduced below:

[DBL] argued that this submission was accepted by the Tribunal and relied on in respect of the Tribunal’s finding that the Goods were not loaded in the KSA (see below at [51]).

[DBL] further argued that:

(a) the Searoutes Website was precisely a “demonstrative exhibit” covered by the Hearing Protocol, and in bringing it up only during oral closing submissions, [DBM] was in breach of the Hearing Protocol, taking [DBL] by surprise;

(b) the Tribunal made no comment on the belated introduction of the Searoutes Website, thereby effectively allowing it;

(c) the Tribunal allowed the Searoutes Website into evidence without giving [DBL] a reasonable opportunity to respond; and

(d) [DBM]’s counsel also inserted or relied on (a) the coordinates of Dammam Port; and (b) the assumed speed of the Vessel (15 knots), although that evidence was not previously adduced.

The applicable law

In Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86 (“Soh Beng Tee”), the Court of Appeal (at [43]) endorsed the following passage, on the two pillars of natural justice, in the Australian decision of Gas & Fuel Corporation of Victoria v Wood Hall Ltd & Leonard Pipeline Contractors Ltd [1978] VR 385 at 396:

A party challenging an arbitration award as having contravened the rules of natural justice must establish four requirements (Soh Beng Tee at [29], citing John Holland Pty Ltd v Toyo Engineering Corp (Japan) [2001] 1 SLR(R) 443 at [18]):

[DBL]’s complaint engaged the principle that the parties should have an opportunity to present their respective cases as well as to respond to the case against them, which is a fundamental rule of natural justice: see Soh Beng Tee at [42] and China Machine New Energy Corp v Jaguar Energy Guatemala LLC and another [2020] 1 SLR 695 (“China Machine”) at [87].

This principle may be distilled into two aspects – the positive aspect comprises the opportunity to present the evidence and advance legal propositions on which the party relies on to establish its claim or defence, while the responsive aspect encompasses the opportunity to present the evidence and advance legal propositions necessary to respond to the case made against it: JVL Agro Industries Ltd v Agritrade International Pte Ltd [2016] 4 SLR 768 (“JVL Agro") at [146].

The responsive aspect has several aspects to it (JVL Agro at [147]):

(a) the party must have notice of the case to which it is expected to respond;

(b) the party must be permitted to present the evidence and advance the propositions of law necessary to respond to it; and

(c) a tribunal could be construed as denying a party a reasonable opportunity to present its responsive case when it adopts a chain of reasoning in its award which it has not given the complaining party a reasonable opportunity to address.

Another essential facet of the right to a fair hearing is the right to be heard on, and have the tribunal consider, all pleaded issues: see AKN and another v ALC and others and other appeals [2015] 3 SLR 488 (“AKN”) at [46].

Therefore, when a tribunal, in the course of reaching its decision, disregards parties’ submissions and arguments on the pleaded issues without considering their merits, the tribunal would be in breach of natural justice: see Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd [2010] SGHC 80 (“Front Row”) at [31], citing Pacific Recreation Pte Ltd v SY Technology Inc [2008] 2 SLR(R) 491 at [30].

There are, however, several important principles to keep in mind when assessing a complaint of breach of natural justice.

First, the threshold for a finding a breach is a high one. It is only in very limited circumstances that the tribunal’s decision may be considered unfair – this gives effect to the balance between upholding minimal interference in the arbitral process and ensuring that the rules of natural justice are complied with: Soh Beng Tee at [65(d)]. Thus, it is only in exceptional cases that a court will find that the threshold for a breach of natural justice has been crossed: China Machine at [87], citing Soh Beng Tee at [54].

Second, and similarly in line with the policy of minimal curial intervention in international arbitrations, the court should be cautious not to allow a party to use fairness as a licence to effectively mount an appeal against the tribunal’s decision. In this regard, the Court of Appeal in Soh Beng Tee cautioned (at [65(f)]) that “[i]t must always be borne in mind that it is not the function of the court to assiduously comb an arbitral award microscopically in attempting to determine if there was any blame or fault in the arbitral process; rather, an award should be read generously such that only meaningful breaches of the rules of natural justice that have actually caused prejudice are ultimately remedied” [emphasis added].

Third, the breach of the rules of natural justice must, at the very least, have changed the tribunal’s decision in some meaningful way: Soh Beng Tee at [91]. The applicant must show actual prejudice: see s 24(b) of the IAA and Soh Beng Tee at [86]. If the same result could or would ultimately have been attained, or if it can be shown that the complainant could not have presented any substantive evidence or submissions regardless, “the bare fact that the arbitrator might have inadvertently denied one or both parties some technical aspect of a fair hearing would almost invariably be insufficient to set aside the award”: Soh Beng Tee at [91].

The Court of Appeal in L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal [2013] 1 SLR 125 (“L W Infrastructure”) clarified (at [51]) that Soh Beng Tee “should not be understood as requiring the applicant for relief to demonstrate affirmatively that a different outcome would have ensued but for the breach of natural justice”. The material inquiry is whether the breach could reasonably have made a difference to the arbitrator, not whether it would necessarily have done so: L W Infrastructure at [54].

Fourth, the fact that an arbitrator did not discuss his reasoning or state his conclusion in respect of certain issues, does not necessarily mean that he did not apply his mind to parties’ arguments on the said issues. In SEF Construction Pte Ltd v Skoy Connected Pte Ltd [2010] 1 SLR 733 (“SEF Construction”), the court held (at [60]) that “[n]atural justice requires that the parties should be heard; it does not require that they be given responses on all submissions made”.

Likewise, in TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd [2013] 4 SLR 972 (“TMM”), the court held (at [91]) that a situation where a tribunal, after applying its mind, fails to comprehend the submissions of a party, or comprehends them erroneously, and comes to a decision which is inexplicable, falls short of a breach of the rules of natural justice. In this vein, the court cautioned (at [90]) against being too fixated with the explicability of a decision, as otherwise “[t]he general principle that errors of law do not found a basis for challenging an award would … be denuded of any significant meaning”.

The evidential threshold for the court to find that an arbitrator had failed to apply his mind to an issue is therefore high. In AKN, the court held (at [46]) that the inference that an arbitrator had failed to consider an important pleaded issue, if such inference is to be drawn, “must be shown to be clear and virtually inescapable”. Accordingly, the court held (also at [46]) that:

Finally, a party will not be allowed to hedge its position by complaining only after receiving an adverse award that its hopes for a fair trial had been prejudiced by the acts of the tribunal: China Machine at [168]. This requires the complaining party to indicate to the tribunal that it intends to take up the objection at a later point in the proceedings: China Machine at [170].

With these principles in mind, I turn to my decision.

My Decision

The Searoutes Demonstration

[DBL] argued that the Tribunal relied heavily on the Searoutes Demonstration in concluding that the Vessel was not loaded at Dammam Port, KSA on 19 September 2013. It relied on the following passages in the Award:

The Tribunal also referenced the Searoutes Demonstration at paragraph 41 of the Award:

[DBL] submitted that the Searoutes Demonstration contravened the Hearing Protocol, and [DBL] had no opportunity to respond to the Tribunal’s decision to allow the Searoutes Demonstration during oral closing submissions at the Arbitration Hearing.

An objection to the Searoutes Demonstration would have made no difference

(1) Other evidence besides the Searoutes Demonstration was sufficient to establish that [DBL] was in breach of the Sales Contract

I address the Searoutes Demonstration itself below at [68]. However, the difficulty for [DBL] was that, even accepting its argument, the Tribunal did not rely on the Searoutes Demonstration alone in determining that [DBL] was in breach of the Sales Contract. In deciding the Vessel did not load the Goods at Dammam Port, KSA, the Tribunal relied on other findings as well. The following passages in the Award are relevant:

The Tribunal dealt again with the issue of the place of loading at another part of the Award, where it is stated:

It is clear from the Award that the Tribunal did not rely solely on the Searoutes Demonstration in deciding that the Goods were not loaded at Port Damman, KSA.

I do not accept [DBL]’s argument that the Searoutes Demonstration had tainted the Tribunal’s assessment of the other evidence. On the face of the Award, the Tribunal dealt with the other evidence separately and independently. The Tribunal assessed that the evidence, in particular Mr [J]’s email of 2 May 2020, supported the conclusion that the Goods were loaded in Iran. This had nothing to do with the Searoutes Demonstration, which only dealt with the assertion that the Vessel was not at Damman, KSA on 19 September 2013.

Likewise, at paragraph 38 of the Award, the Tribunal relied on the evidence of [DBL]’s own witness, Mr [L], that the Vessel stopped in the KSA on 22 and 23 September 2013, which contradicted its case that the Vessel was in the KSA on 19 September 2013. This again had nothing to do with the Searoutes Demonstration.

Thus, these pieces of evidence, without considering the Searoutes Demonstration, were sufficient to support the Tribunal’s conclusion that the Goods were loaded in Iran and the Vessel was not in the KSA on 19 September 2013. In so far as [DBL] argued that the above evidence was insufficient to establish that conclusion, or that the Tribunal had misunderstood the evidence, that is an error of fact which is not a proper subject of review: BLB and another v BLC and others [2013] 4 SLR 1169 (“BLB”) at [68].

(2) [DBL]’s own case would not have been improved by an objection to the Searoutes Demonstration

Even if [DBL] had successfully objected to the Searoutes Demonstration, it would still have been unable to show that the Goods were loaded in the KSA.

The only evidence adduced by [DBL] that the Goods were loaded in the KSA was the B/L, which the Tribunal regarded as “most unlikely to be accurate”. Although the Tribunal did not give reasons for this finding, the Tribunal is not obliged to give its reasons for all its findings. As was observed in TMM at [100] (citing World Trade Corporation v C Czarnikow Sugar Ltd [2005] 1 Lloyd’s Rep 422 at [8]–[9]), arbitrators are “under no duty … to explain why they attach more weight to some evidence than to other evidence … arbitrators are not in general required to set out in their reasons an explanation for each step taken by them in arriving at their evaluation of the evidence and in particular for their attaching more weight to some evidence than to other evidence or for attaching no weight at all to such other evidence” [emphasis in original omitted]. In any event, the finding that the B/L was unreliable is supported by the Tribunal’s findings at paragraphs 34 and 36 of the Award; namely, that the evidence showed that the Vessel had called at Bandar Abbas in Iran at the relevant time and thus the Goods were not loaded in the KSA.

Further, it was not [DBL]’s case that by depriving it of the opportunity to respond to the Searoutes Demonstration, the Tribunal had prevented it from adducing evidence to support its case that the Vessel was in the KSA on 19 September 2013. [DBL]’s best case was that it was unable to adduce evidence to persuade the Tribunal to disregard the Searoutes Demonstration.

Even on [DBL]’s argument that if it had been given notice that [DBM] intended to use the Searoutes Website, it would have had the opportunity to consider whether to lead evidence (including expert evidence) on how the Searoutes Website worked and the accuracy of the Searoutes Website in plotting routes, [DBL] would still not have suffered actual prejudice. In this regard, [DBL] pointed out that Vessel Finder itself, ie, the source of the data which was plotted into the Searoutes Website, had in emails to both parties’ counsel stated that there were “several gaps in the data” and acknowledged that “there is always the possibility of discrepancies” and “detailed information … can not [sic] be guaranteed”.

However, [DBL] did not adduce any evidence to even suggest that the margin of error in the data, if accepted in [DBL]’s favour, might have made a difference to the outcome. There was no elaboration on what the “several gaps in the data” or “the possibility of discrepancies” were, and more importantly, how these might have changed the result in [DBL]’s favour.

Thus, even assuming there was a breach of natural justice in the Tribunal’s allowing of the Searoutes Demonstration, [DBL] did not suffer prejudice.

I add that it was unclear to me what “data” the Tribunal relied on in making its finding at paragraph 18 of the Award, and how it related to the Searoutes Demonstration. The Tribunal held that the evidence showed “that the vessel could not have loaded in Dammam on 19 September because she would not have been able to sail there in order to arrive on 19 September” [emphasis added]. On the face of that finding, the Tribunal must have been referring to the location of the Vessel before 19 September 2013, which had nothing to do with the Searoutes Demonstration which dealt with the Vessel’s location on 20 September 2013.

My findings above are sufficient to dispose of [DBL]’s first ground. For completeness, I deal with the parties’ arguments with respect to the Searoutes Demonstration itself.

The allowing of the Searoutes Demonstration was not in breach of natural justice

[DBM] argued that the Searoutes Demonstration did not introduce new evidence and that the Searoutes Website was merely a presentation tool using evidence that had been adduced. What the Searoutes Website did was to plot a route between the coordinates of two points. [DBM] pointed out that:

(a) the coordinates it entered were derived from the Vessel Finder Report, which set out the location of the Vessel on various dates in the Period. In particular, the coordinates of the Vessel on 20 September 2013 were in the Vessel Finder Report and not disputed;

(b) all it did was to use the simple formula of “speed x time = distance”, with 15 knots being the maximum speed recorded by the Vessel in the Period, to show that the Vessel could not be anywhere near its (undisputed) location on 20 September 2013 if it had been at Port Damman, KSA on 19 December 2013; and

(c) the Searoutes Website therefore did not introduce evidence, nor was it a demonstrative exhibit – it was “simply a visual presentation tool that presents the information within the [Vessel Finder Report], i.e. the movement and location of the Vessel, in the form of a visual map”.

[DBL] pointed out that the data used by [DBM] was not entirely derived from the Vessel Finder Report. [DBL] also submitted that “extraneous information” was fed into the Searoutes Website by [DBM]’s counsel, namely (a) the geographical co-ordinates of Damman Port; and (b) the speed of the Vessel.

While it might have been ideal for [DBL] to have responded to the Searoutes Demonstration, I rejected its submission that the allowing of the Searoutes Demonstration was in breach of natural justice as:

I elaborate below.

(1) The data used by [DBM] was already in evidence and was uncontroversial

The formula relied on by [DBM] above and the geographical co-ordinates of Port Damman were uncontroversial and were matters the Tribunal could take judicial notice of: see iVenture Card Ltd and others v Big Bus Singapore City Sightseeing Pte Ltd and others [2022] 1 SLR 302 at [155]. It was not required to be adduced as evidence, much less expert evidence. Further, the use of the speed of 15 knots was also uncontroversial. According to the Vessel Finder Report, that was the fastest speed the Vessel attained during the Period and [DBM] was giving [DBL] the benefit by using that figure. Importantly, it was not [DBL]’s case that the data, or the calculation used, were incorrect.

It was from these data points that the Searoutes Website derived the Vessel’s route, and therefore the distance between the Vessel and Dammam Port. It was not [DBL]’s case that the distance measured was incorrect.

In this regard, I also note that the court should not carry out a “hypercritical” analysis of the Tribunal’s decision, especially where the Tribunal is experienced in the relevant technical field and the area of law concerned: see CDI v CDJ [2020] 5 SLR 484 at [31(c)], citing TMM at [44].

(2) [DBL]’s conduct throughout the Arbitration did not evince an intention on its part to object to the Searoutes Demonstration

Throughout the Arbitration, [DBL] did not object to the Searoutes Demonstration, or even raise questions about the accuracy of the data or the Searoutes Website although, on its own case, it was aware of the same. The chronology of events is important:

(a) [DBM] was first to make its oral closing submissions at the Arbitration Hearing, during which [DBM]’s counsel performed the Searoutes Demonstration. [DBL]’s counsel did not raise any objection, nor even suggest that the Searoutes Demonstration was in breach of the Hearing Protocol;

(b) after [DBM] concluded, [DBL]’s counsel requested, and was granted, an adjournment to “take account of what’s been said” before making [DBL]’s own closing submissions. [DBL] pointed out that the break was only ten minutes, but [DBL]’s counsel did not ask for a longer break, nor does [DBL] suggest that a request for one would likely have been refused;

(c) when the Arbitration Hearing resumed, [DBL]’s counsel immediately began making oral closing submissions, in which he did not address or object to the Searoutes Demonstration; neither did he ask for more time to deal with [DBM]’s arguments;

(d) in the period of about six months between the last day of the Arbitration Hearing on 19 October 2021 and the issuance of the Award on 13 April 2022, [DBL] did not seek leave to address the Searoutes Demonstration; and

(e) [DBL] also remained silent in the period leading up to the issuance of the corrected Award on 28 October 2022.

In the circumstances, [DBL], through its conduct, evidenced an intention to see the Arbitration through to its conclusion. Its conduct suggested that it did not regard the Searoutes Demonstration objectionable at all. It was only by way of this application that [DBL] alleged that the Searoutes Demonstration introduced extraneous evidence and amounted to a breach of the rules of natural justice.

[DBL] argued that it did object at the Arbitration Hearing to a piece of evidence that was introduced by [DBM]’s counsel prior to the Searoutes Demonstration. When cross-examining [DBL]’s witness, [DBM]’s counsel referred to a moving, live map (on Google Maps) (“the Live Map”) showing the Vessel’s path, although only a static map was disclosed in evidence. [DBL]’s counsel objected to the introduction of the Live Map, noting that “this document is not in evidence”. [DBM]’s counsel then suggested that if [DBL]’s counsel had a genuine objection, he could make that objection in his submissions or in the re-examination. The Tribunal allowed [DBM]’s counsel to proceed, without ruling on the issue. For clarity, I set out the relevant portion of the transcript of the Arbitration Hearing:

In oral submissions before me, [DBL]’s counsel argued that after [DBL]’s objection to the Live Map was “brushed aside” by the Tribunal, it seemed “pointless” for [DBL] to object to the later introduction of the Searoutes Website. However, even taking the prior objection to the Live Map as an objection to the Searoutes Demonstration as well, this objection was not followed up at any point thereafter, despite [DBM]’s counsel’s suggestion for [DBL]’s counsel to bring up the objection during its submissions or re-examination. As noted above at [74], [DBL] did not pursue the point in its oral closing submissions despite it taking place immediately after [DBM]’s oral closing submissions, which was when the Searoutes Demonstration took place. Neither did [DBL] raise this objection at any point up till the issuance of the corrected Award – a total period of more than a year.

In this regard, as noted earlier at [49], the Court of Appeal warned in China Machine (at [168]) that:

This squarely described [DBL]’s conduct. [DBL]’s belated objection to the Searoutes Demonstration in this application was inexcusable and opportunistic.

Further, the court in China Machine (at [170]) elaborated that the complaining party must have indicated to the Tribunal that it intended to take up the objection at a later point in the proceedings:

In the present case, the suggestion to bring up the objection at a later point in the proceedings was not even raised by [DBL]’s counsel. Rather, it was [DBM]’s counsel who said that “[i]f Mr De Wolff [ie, [DBL]’s counsel] genuinely thinks that I have shown the witness anything which is inconsistent with the documents on the record, he can make that point in his submissions or in the re-examination”. [DBL]’s counsel did not add anything to this point, neither confirming that he intended to take up the objection later nor actually doing so at any point in the proceedings thereafter. There was clearly no “fair intimation” on [DBL]’s part to the Tribunal that it intended to take up the objection to the Searoutes Demonstration at a later point in the proceedings.

In the circumstances, the Tribunal’s allowing of the Searoutes Demonstration did not constitute a breach of the rules of natural justice.

The limitation defence

It was undisputed that [DBM]’s cause of action for breach of the Sales Contract accrued in September 2013, when the Goods were loaded onto the Vessel, and that the six-year limitation period under English law (“the Limitation Period”) would have expired prior to the Arbitration commencing in July 2020.

Before the Tribunal, [DBM]’s case was that its claim was not time-barred on account of the Acknowledgments. [DBL]’s position was that none of the Acknowledgments had the effect of extending the Limitation Period as they failed to meet the requirements under ss 29 and 30 of the English Limitation Act. These requirements included that an acknowledgment be signed by its maker, made in writing to the creditor, and related to a liquidated pecuniary sum.

In the Award, the Tribunal found that each of the Acknowledgments had the effect of extending the Limitation Period:

[DBL] argued that the Award failed to reference or address any of [DBL]’s arguments on the prescribed requirements under s 29 of the English Limitation Act, and that this failure gave rise to the irresistible inference that the Tribunal had failed to consider [DBL]’s arguments on this point at all.

I rejected this submission. It was evident from the Award that the Tribunal had clearly considered [DBL]’s defence of limitation and found in favour of [DBM]’s response that the Acknowledgments had extended the Limitation Period. What [DBL] was essentially complaining about was the Tribunal’s failure to explain why the Acknowledgments satisfied s 29 of the English Limitation Act. But all the Tribunal is required to do is to deal with the essential issues in the Award, and not with every argument canvassed under each of the essential issues: see AKN at [46] and SEF Construction at [60]. Put another way, on the face of the Award, it was not a “clear and virtually inescapable” inference that the Tribunal had failed to consider [DBL]’s argument that the requirements of the English Limitation Act had not been met: AKN at [46].

[DBL] relied on the cases of Front Row, AKN, and BRS v BRQ and another and another appeal [2021] 1 SLR 390 (“BRS”) to support its argument that the Tribunal’s failure to consider these arguments constituted a failure to consider material arguments or submissions and was therefore a breach of natural justice. However, the factual matrices in these three cases, which led the courts in them to find that there was a breach of natural justice, were very different. In this regard, the Court of Appeal’s holding in AKN at [47] is pertinent:

In Front Row, AKN, and BRS, the latter limb described in AKN was operative – ie, the tribunals failed to even consider the relevant arguments. Front Row provides the clearest example – the court there held (at [45]) that the arbitrator “had explicitly stated, at paras 55 and 56 of the Award, that he was disregarding the issue concerning Daimler’s obligation to organise, brand and promote the Asian Cup Series”. Hence, the court concluded that the tribunal’s failure to consider this important argument constituted a breach of natural justice: Front Row at [46].

The same is true of AKN. There, the tribunal found an important issue in the dispute to be inconsequential as the tribunal mistakenly believed that the parties pursuing the issue had conceded it. Hence, the tribunal failed to consider the merits of the parties’ submissions in relation to that issue: AKN at [98]–[102]. However, the court found that the parties had in fact never conceded the issue (AKN at [101]), and hence the court’s failure to consider the merits of their submissions constituted a breach of natural justice.

Finally, in BRS, the parties agreed that the tribunal had failed to consider, whether explicitly or implicitly, the claimants’ evidence and submissions in respect of an important issue in the dispute: BRS at [102] and [106]. The court found that this undisputed omission on the tribunal’s part amounted to a breach of natural justice: BRS at [106].

In these three cases, it was abundantly clear that the tribunals failed to consider the relevant submissions, whether implicitly or explicitly. However, in the present case, the Award made clear that the Tribunal did consider [DBL]’s limitation defence but rejected it in favour of [DBM]’s arguments. While that was not definitive proof that the Tribunal did consider [DBL]’s specific arguments relating to s 29 of the English Limitation Act, it certainly did not lead to a “clear and virtually inescapable” inference that the Tribunal had failed to do so.

A useful parallel may be drawn between the present case and SEF Construction. The court in SEF Construction found (at [60]), after reviewing the adjudication determination, that the adjudicator did consider the submissions of the parties, their responses, and other material placed before him. Although he did not explicitly state his reasoning and conclusions as to two of the four main issues in the dispute, it did not mean that he did not consider the related submissions. Rather, the court found that “[i]t may have been an accidental omission on his part to indicate expressly why he was rejecting the submissions since [he] took care to explain the reasons for his other determinations and even indicated matters on which he was not making a determination … [or] he may have found the points so unconvincing that he thought it was not necessary to explicitly state his findings”: SEF Construction at [60]. Hence, no breach of natural justice was found.

In contrast to the adjudicator in SEF Construction, the Tribunal did state its conclusion as to the limitation issue. Hence, there was a stronger argument that the Tribunal did consider [DBL]’s arguments in relation to s 29 of the English Limitation Act.

In so far as [DBL] was complaining that the Tribunal did not correctly understand or apply the requirements under s 29 of the English Limitation Act, that was a complaint with respect to an error of law, which was beyond this review: BLB at [68].

The enforceability of the Bond

[DBL] argued before the Tribunal that the Bond was unenforceable under English law as:

(a) it contained a gratuitous promise from [DBL] to [DBM], which was not enforceable; and

(b) in addition, the Bond was not validity executed as a deed under English law as it did not meet the requirements under ss 1(2)(a) and 1(2)(b) of the Law of Property (Miscellaneous Provisions) Act 1989 (c 34) (UK).

It was clear from the face of the Award that the Tribunal did not address these arguments, or deal with the issue of the enforceability of the Bond.

[DBM] argued that as the Tribunal found [DBL] liable for breach of the Bond, it implicitly found that the Bond was enforceable, or that it was at least not a “clear and inescapable” inference that the Tribunal had failed to deal with the issues and arguments in relation to the unenforceability of the Bond. Taking [DBM]’s argument to its logical conclusion, it would mean that a tribunal which allows a party’s claim or defence must necessarily have agreed with all its arguments or dismissed those of its adversary. That clearly goes too far. There must be some indication, on the face of the documents and the tribunal’s award, that the tribunal had considered the critical issues and arguments: see TMM at [90] and AQU v AQV [2015] SGHC 26 at [33]. It will often be a matter of inference rather than explicit indication that the tribunal failed to consider an important issue: AKN at [46]. However, in the present case, there was neither an explicit nor implicit indication in the Award that the Tribunal had considered the issue of the enforceability of the Bond. This was very different from the issue of limitation discussed above at [82]–[94].

But that did not mean that there was a breach of natural justice which entitled [DBL] to set aside the Award.

[DBL]’s argument that it was prejudiced was premised on the following:

(a) [DBM]’s pleaded claims were “under the Sales Contract as varied by the [Bond]”;

(b) [DBM] sought, and the Tribunal awarded, a refund of the Purchase Price, and that remedy was only expressly provided in the Bond, not the Sales Contract – all that the Sales Contract provided was that in the event of any breach of the Sales Contract “[b]oth Parties shall indemnify and keep indemnified the other Party against all actions, suits and proceedings and all costs charges expenses loss or damages incurred or suffered by or caused to the non-defaulting Party by reason of any breach … by the defaulting Party of its obligations under this Contract and any applicable law” [emphasis added];

(c) on the contrary, the Bond expressly contained the Dissatisfaction Clause, under which a refund (and termination of the Sales Contract) was available if the relevant bankers/authorities were not satisfied with documentation showing that the Goods originated from the KSA; and

(d) in the circumstances, the Tribunal’s failure to deal with the enforceability of the Bond was a breach of natural justice which caused it prejudice.

Importantly, [DBL]’s argument mis-stated or mischaracterised:

(a) [DBM]’s pleaded case; and

(b) the Award.

[DBM]’s pleadings in the Arbitration

(1) [DBM]’s two heads of claim and the respective remedies sought

[DBM] relied on the following heads of claim and, inter alia, the respective reliefs:

(a) for breach of the Sales Contract as varied by the Bond, refund of the balance due to [DBM] from [DBL] and indemnification for all losses and costs incurred by [DBM] as a result of the breach; and

(b) alternatively, damages for breach of the Sales Contract simpliciter.

[DBM] relied on a further alternative claim in unjust enrichment; however, the Tribunal did not rule on that, and it is not relevant in the context of this application.

The heads of claim and the respective reliefs referred to at [101] above were laid out in paragraphs 2, 71, 72 and 109 of [DBM]’s Statement of Claim (“SOC”):

Similarly, paragraphs 101 and 151 of [DBM]’s Amended Reply to the Defence (“the Reply”) stated:

Importantly, the basis for both heads of claim was the same – ie, [DBL]’s failure to load the Goods in the KSA. This was a breach of a term which existed in both the Bond and the Sales Contract. Further, [DBM] did not rely on breach of the Dissatisfaction Clause (described above at [9(b)]) – that term was included only in the Bond and not the Sales Contract, and thus if [DBM] had relied on breach of that term and succeeded solely on that ground, the Tribunal’s failure to consider the enforceability of the Bond would certainly have caused prejudice to [DBM].

(2) The remedies sought under both heads of claim were the same in one material respect

With respect to the amount it was claiming under both heads of claim, [DBM]’s pleadings made no distinction between (1) the refund of the balance moneys (owed by [DBL] to [DBM]) for breach of the Sales Contract as varied by the Bond; and (2) the damages for breach of the Sales Contract simpliciter. In both cases, the pleadings made clear that [DBM] was seeking the same amount – ie, the New Outstanding Amount.

This was made clear by paragraph 130 of the SOC:

Under paragraph 130, [DBM]’s claimed remedy in respect of breach of the Sales Contract as varied by the Bond was for the New Outstanding Amount (under sub-paragraph 130(a)), plus various other losses (under sub-paragraphs 130(b)–130(d)). In its Reply, [DBM] referred to these various other losses as the “Consequential Losses”, and I will refer to them as such.

Importantly, the claimed amounts under paragraph 130 of the SOC were also being claimed in respect of breach of the Sales Contract simpliciter. The first sentence of paragraph 130 stated “[a]s noted in paragraphs 93, 95 and 111, [DBM] claims the following amounts …” [emphasis added] – this was followed by the list of amounts in paragraphs 130(a)–130(e). For context, I set out paragraphs 109–111 of the SOC:

Thus, paragraph 111 of the SOC addressed [DBM]’s claim for damages in respect of breach of the Sales Contract simpliciter. Read together with paragraph 130, it was clear that [DBM] was also seeking the New Outstanding Amount in respect of this head of claim.

Thus, under both heads of claim, [DBM] sought the refund of the New Outstanding Amount as its claimed remedy. The only difference between the amounts sought was the Consequential Losses. Under paragraph 111 of the SOC, the claim for “damages” due to breach of the Sales Contract simpliciter excluded the recovery of the Consequential Losses (ie, the amounts listed in sub-paragraphs 130(b)–130(d)).

This reading of the claim for damages for breach of the Sales Contract simpliciter was corroborated by paragraph 131 of the SOC, where it was stated that “[a]s noted in Section V(A) above, [DBL] is liable to refund to [DBM] the Admitted Dues, the principal amount of which amounts to USD 9,922,152.97” [emphasis added]. Paragraph 133 then clarified that the net balance of the Admitted Dues to be paid back was the New Outstanding Amount (after setting off the amounts due to [DBL] under the Nickel Purchase Agreement). Section V(A) of the SOC referred to both claims for breach of the Sales Contract as varied by the Bond and breach of the Sales Contract simpliciter; hence, the effect of paragraph 131 of the SOC was that the New Outstanding Amount was to be refunded to [DBM] under both heads of claim.

I observe that [DBM]’s pleadings were prolix and confusing: see [19] above. Nevertheless, in arbitration proceedings generally, a more generous approach is taken towards pleadings, and pleadings are not determinative in the same way they might be in court litigation: see Phoenixfin Pte Ltd and others v Convexity Ltd [2022] 2 SLR 23 at [50]. The crucial question is whether the relevant issue was known to all the parties, even if it was not part of the stated pleadings: TMM at [52].

In any case, [DBM]’s alternative claim for damages from breach of the Sales Contract simpliciter, and the damages it was seeking for that breach, was clear enough on the face of its pleadings (see [103]–[104] above). Importantly, as [DBL]’s counsel acknowledged, [DBL] was not taken by surprise by this alternative claim.

The Award

The Award did not expressly refer to [DBM]’s alternative claim based on breach of the Sales Contract simpliciter. It referred to the primary claim – ie, breach of the Sales Contract as varied by the Bond. Admittedly, the wording of the Award was somewhat confusing, with “breach of the Indemnity Deed [ie, the Bond]”, “breach of the express terms of the Contract” and “breach of the Sale Contract” seemingly used interchangeably.

Nevertheless, the Award made clear that [DBL] had breached terms in both the Sales Contract as well as the Bond. This breach related to the condition that the Goods were to be loaded in the KSA, which was a condition contained in both the Sales Contract and the Bond. Paragraphs 19, 36 and 39–41 of the Award stated:

In the Award, the Tribunal rejected [DBM]’s claim for the Consequential Losses as being “too remote”. Hence, the Tribunal awarded the New Outstanding Amount alone. This was the same amount claimed under both heads of claim in [DBM]’s pleadings.

In the circumstances, it was clear that:

(a) the pleaded heads of claim were for, inter alia, breach of the Sales Contract as amended by the Bond; and alternatively, breach of the Sales Contract;

(b) for both heads of claim, the relevant breach was the failure to load the Goods in the KSA;

(c) for both heads of claim, [DBM] sought an amount equivalent to the New Outstanding Amount;

(d) the only difference in claimed amounts under both heads of claim was that [DBM] was, for breach of the Sales Contract as varied by the Bond, additionally seeking the Consequential Losses. These were in any event not awarded by the Tribunal;

(e) the Tribunal found a breach of cl 9 of the Sales Contract for failure to load in the KSA, and did not appear to distinguish between a breach of the Sales Contract as varied by the Bond and breach of the Sales Contract simpliciter;

(f) the Tribunal found that [DBM] was entitled to terminate the Sales Contract and claim damages for the breach; and

(g) the Tribunal awarded the New Outstanding Amount to [DBM].

Thus, it appeared that the Tribunal saw no distinction between [DBM]’s claimed remedies under the two heads of claim. That may explain why the Tribunal did not distinguish between the “refund” claimed for breach of the Sales Contract as varied by the Bond, and the “damages” claimed for breach of the Sales Contract simpliciter. In either case, the amount which [DBM] sought to recover was the New Outstanding Amount, as was made clear by the pleadings.

This equivalence between the amounts sought by [DBM] under both heads of claim was acknowledged twice by [DBM]’s counsel in the hearing before me. Similarly, [DBL]’s counsel agreed that the remedy under both heads of claim would have been “equivalent”. Further, [DBL]’s own pleadings and submissions did not draw any distinction with respect to the direct damages, ie, the New Outstanding Amount, which [DBM] would be entitled to under both heads of claim – [DBL]’s counsel, in relation to whether this distinction appeared in [DBL]’s own pleadings and submissions in the Arbitration, admitted that it was “unfortunately not stated there”.

In the circumstances, there was no need for the Tribunal to decide on the enforceability of the Bond as it had dismissed [DBM]’s claim for the Consequential Losses. In other words, it did not reasonably appear that the failure was an omission, but simply that it was not necessary to decide the issue.

There was no prejudice to [DBL] in any event

For the same reason, [DBL] suffered no prejudice. Under both heads of claim, the granted remedy would have been the return of the New Outstanding Amount. This was evident from the Award, in which the Tribunal essentially held that the “damages” for breach of the Sales Contract were equivalent to the New Outstanding Amount:

Thus, even if the Tribunal had accepted [DBL]’s argument that the Bond was unenforceable, and had considered only the Sales Contract simpliciter, it would have reasonably arrived at the same result.

In this regard, the entire basis of [DBL]’s argument that it suffered prejudice was incorrect. [DBL] argued that the Tribunal “took the view that [DBM]’s entitlement to terminate the Sales Contract and obtain a refund of the Purchase Price arose by reason of the bond”, pointing to the fact that only the Bond “expressly provided for such a refund”. Similarly, [DBL] submitted that “the contractual basis for [DBM]’s claim for a refund "lies in the Bond”. Hence, if the Tribunal had considered the enforceability of the Bond and found it to be unenforceable, the foundation of [DBM]’s claim for a refund would fall away.

[DBL]’s argument was incorrect in two aspects. First, the Bond expressly provided for a refund of the payments received by [DBL] where the Dissatisfaction Clause is relied on. I set out the relevant portion of the Bond:

Given that [DBM]’s case in the Arbitration, and the Tribunal’s decision, relied on the failure to load the Goods in the KSA, and not the Dissatisfaction Clause, the Tribunal’s decision to award the New Outstanding Amount did not arise from that section of the Bond.

Second, and relatedly, [DBM]’s pleadings in the Arbitration and the Tribunal’s reasoning in the Award did not base [DBM]’s entitlement to obtain a refund of the New Outstanding Amount on the Bond. [DBM] sought, in its pleadings, the New Outstanding Amount as “damages” for breach of the Sales Contract simpliciter (as observed above at [108]). The Tribunal, in the Award, gave “damages” for breach of the Sales Contract which were equivalent to a refund of the New Outstanding Amount (as observed above at [120]).

Hence, [DBL] erred in submitting that [DBM]’s entitlement to a refund of the New Outstanding Amount was premised only on the Bond. This reinforces the conclusion that even if the Bond was unenforceable, [DBL] suffered no prejudice.

Conclusion

None of the various grounds relied on by [DBL] met the high threshold required to establish a breach of natural justice which warranted the setting aside of the Award. Hence, I dismissed the application.