Arbitral Award Repealed By Court Of Appeal Due To Breach Of Natural Justice

In the case of BRS v BRQ & ano’r [2020] SGCA 108 the Singapore Court of Appeal has repealed an arbitral award and remitted the matter to the Tribunal for further consideration after finding that there occurred a breach of natural justice by the Tribunal’s failure to consider a party’s evidence and arguments.

To succeed in setting aside an arbitral award by virtue of a breach of natural justice, the applicant must demonstrate:

1.      The relevant rule of natural justice that was breached;
2.      How the rule was breached;
3.      In what way the breach was connected to the making of the award; and
4.      How the breach has prejudiced the party’s rights.

In this case, the Claimant alleged that there had been breaches of the ‘fair hearing’ rule, which requires a Tribunal to consider all important issues. The Court held that, where a party alleges that a Tribunal has “wholly missed one or more important pleaded issues”, “the inference, if it was to be drawn at all, must be shown to be clear and virtually inescapable”. It would be insufficient to show that a Tribunal was mistaken as to the law or that it had misunderstood a party’s case.

Applying the principles to this case, the Court found that the Tribunal had failed to take into account evidence regarding a design process as the award did not address this allegation and evidence at all. This is a breach of natural justice and has caused real and actual prejudice to the Claimant by limiting its entitlement to costs.

In its ruling, the Court has:   

• Confirmed the high bar faced by any party wishing to challenge an arbitral award for an alleged failure to comply with the principles of natural justice and 
• Confirmed that where it is apparent that a Tribunal has not duly addressed a point raised by the parties, that failure can be a basis for setting aside an award.