Leave to Appeal Against an Arbitral Award

It is trite that the notion of Calderbank offers denotes that a Court has the discretion to make an adverse costs order against a party if he refuses an offer to settle proceedings for a particular sum which is more than the sum granted in the final judgment. The application of Calderbank offers remains the same in an arbitration governed by Singapore law.  

In the case of CKR Contract Services Pte Ltd v Asplenium Land Pte Ltd [2020] SGHC 81 the Plaintiff was dissatisfied with the adverse costs order made because he did not accept a favourable Calderbank offer. He subsequently applied to the Singapore High Court for leave to appeal against an arbitral award pursuant to s.49(3)(b) of the Arbitration Act.  

The Court set out the conditions a party has to satisfy before a leave would be granted, which are as follows:             

1) The appeal must be on a question of law;

2) The determination of that question will substantially affect the rights of one or more of the parties to the arbitration;

3) The question was one which the arbitrator was asked to determine;

4) On the basis of the findings of fact in the award, the decision of the arbitrator on the question is obviously wrong, or the question is one of general public importance and the decision of the arbitral Tribunal is at least open to serious doubt; and

5) Despite the agreement of the parties to resolve the matter by arbitration, it is just and proper in all the circumstances for the Court to determine the question.

On the facts, the Court enunciated that the law on Calderbank offers are trite and the parties had not disputed the law in question, but how the Tribunal had exercised its discretion. The Court drew a difference between an error in the application of law (which does not confer a right of appeal) and a question of law (which confers a right of appeal). Essentially, the Court dismissed the application as the questions posed relates merely to the application of the law.  
The Court also bore in mind the overarching principles of finality in arbitration proceedings and party autonomy where curial intervention should be minimised. It also propounded that it should not approach an award with a “meticulous legal eye endeavouring to pick holes, inconsistencies and faults in the award”.  

The Court underlined the following in the course of its judgment:

• Parties should carefully consider and evaluate offers to settle disputes. They represent an avenue to minimise the costs of litigation, and can save considerable time and resources. It is for this reason that there may be consequences when they are unjustifiably ignored; and
• Courts will be vigilant in guarding against attempts to frame a challenge to arbitral Tribunals’ findings of fact as questions of law. 

This decision aims to alert the parties that they should carefully evaluate such offers to settle could bring about the appropriate costs orders or an avenue to minimize the costs of litigation. More prominently, this judgment illustrates the high threshold for the grant of leave under Section 49(5) of the Arbitration Act. Therefore, parties should carefully consider the merits of their applications for leave to appeal against an arbitral award.