Case Law Update – February 2025

Although this is a relatively old case, it is one which has been relevant to our work in international arbitration this month.

L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal [2012] SGCA 57

• This case considered two appeals, the first being brought by the Claimant, and the second, by the Defendant.

• The case considers:
  • How the rules of natural justice apply to arbitration.
  • How relief from breaches of natural justice is obtained.
  • What court’s jurisdiction to supervise arbitration is, beyond what is expressly provided for in the Act.

• The Claimant was the Defendant’s sub-contractor for a building project. The Claimant failed to complete the works by the agreed upon completion date so the Defendant subsequently terminated the contract, leading to the dispute.

• The dispute was referred to arbitration by the Defendant, pursuant to a Notice of Arbitration served on 22 June 2004. The Defendant was the applicant and Claimant was the respondent. The arbitrator rendered his final award (“the Final Award”) on 29 June 2010 and the Claimant was awarded the sum of $341,391.10. Neither party was content with his decision and applied to the Singaporean High Court to remit the Award.

• The Award was remitted to the arbitrator who then rendered his supplementary award (“Supplementary Award”) on 21 June 2022, awarding the Defendant $945,000 in liquidated damages. The Claimant was ordered to pay $603,608.90 after off-setting the sum of $341,391.10 that had been awarded to them in the Final Award.

• In both instances, the arbitrator only awarded post-award interest. The Defendant’s solicitors, pursuant to s43(4) of the Arbitration Act, wrote a letter to the arbitrator, with the Claimant’s solicitors copied in, requesting “pre-award interest”. The arbitrator granted their request after three days, without the Claimant’s solicitors having had the opportunity to reply.

• The additional award (“Additional Award”) was for a further sum of $274,114.61 in respect of pre-award interest awarded to the Defendant.

• Upon protestation by the Claimant’s solicitors, the arbitrator gave his reasoning:

• “I held my hands for 3 days till 20 Oct 2011 pending a response from [the Claimant]. Since there was no objection raised and no interim reply to suggest that the [Claimant] intended to object to the request, I proceeded to deal with the application. I am also surprised by your suggestion that because the original award had only dealt with post-award interest that it was my intention to exercise my discretion on pre-award interest. It is obvious from [the Additional Award] that it was indeed an oversight in the original award. If it was my intention not to award pre-award interest, I would have refused the [Defendant’s] application”.

• The Claimant then filed an application in the Singaporean High Court, applying for the following relief:
• • The Additional Award be declared a nullity in that it was not an award made under, or for the purposes of s43(4) of the Act; and

• • Further, or in the alternative, an order that the Additional Award be set aside under s48(1)(a)(vii) of the Act on the ground that it had been made in breach of natural justice.

• The Judge did set the Additional Award aside; however, he did not declare it a nullity. Reasoning that the Court has no jurisdiction to make such a declaration relying on s47 of the Act.

• The Judge set aside the Additional Award under s48(1)(a)(vii) of the Act, ruling that it was made in breach of the rules of natural justice. The Claimant argued that the arbitrator failed to give them an opportunity to be heard before issuing the Additional Award.

• The arbitrator decided the issue on a basis not raised or contemplated by the parties. The Judge affirmed that natural justice applies throughout arbitration proceedings, including additional awards. While an arbitrator can issue an additional award under s43(4) of the Act to correct oversights, this power is limited to cases where all necessary submissions and evidence were presented in the main arbitration.

• In this case, the arbitrator acted with undue haste, assuming the Claimant’s silence over three days implied no objection. This was a breach of “audi alteram partem” (the right to be heard). The Judge ruled that the denial of the Claimant’s right to submit on s 43(4) constituted prejudice sufficient to justify setting aside the Additional Award. Accordingly, the entire Additional Award was set aside under s 48(1)(a)(vii) of the Act.

• The matter was appealed by the Defendant.

• The two main issues before the Singaporean Court of Appeal then, were:
• • Did the Judge err in refusing to declare the Additional Award a nullity?
  • Did the Judge err in setting aside the Additional Award?

• The Court affirmed the previous decision citing breaches of natural justice because the Claimant was not able to respond to the application made under s43(4) of the Act.

• The Judge in the High Court was found not to have erred in either example as he acted within his jurisdiction, which provided for the setting aside of awards, but not declaring them nullities.

Key takeaways:

• Parties should be allowed sufficient time to submit a response to a request for an arbitration to consider corrections to an award made by another party to the arbitration.

Placefirst Construction Ltd v CAR Construction (North East) Ltd [2025] EWHC 100 (TCC

Facts:

• Following a “smash and grab” adjudication decision made on 18 October 2024, the adjudicator found in the main contractor’s favour and declared the following:
  • Placefirst, the main contractor, had failed to serve a valid payless notice under the JCT Design & Build Contract 2016;
  • The purported payless notice issued by Placefirst, included a valuation regarding an interim payment application under the sub-contract with the main-contractor and was therefore invalid; and
  • It was served before the date when it could have validly been served under statute or the sub-contract.

• Placefirst initiated Part 8 proceedings on 5 November 2024, applying for a final determination to fend off enforcement of the adjudicator’s decision.

• The sub-contractor, “CAR”, issued Part 7 proceedings to enforce the adjudicator’s award. The court heard both applications together.

First issue: was the payless notice valid?

• CAR argued that Placefirst’s payless notice was invalid as it was served too early under the Act and sub-contract.

• Upon examination of the relevant statutory provisions, particularly s.110A(3) of the Housing Grants, Construction and Regeneration Act 1996, which defines valid payment notices, and s.111(2) (which dictates when a payless notice can be issued). The Court found that:
• • Placefirst’s interim payment application met the requirements of a valid payment notice under s.110A(3), meaning Placefirst’s payless notice was correctly issued.

• • The court disagreed with CAR’s claim that a payless notice could only be given after the time for the payer’s payment notice had elapsed, emphasising that there was no statutory requirement for such a delay. The only statutory restriction on timing was that one cannot be issued before a payment application is submitted.

• • The court ruled that Placefirst’s payless notice, served on 31 July 2024, was valid, rejecting CAR’s challenge.

Second issue: Did Placefirst give a payment notice on 31 July 2024?

• Under the Act, payment and payless notices must state the sum considered due and the basis upon which it has been calculated. Therefore, they can include exactly the same content, including valuations and deductions.

• A single notice cannot constitute both, a payment notice and a payless notice. However, there is no restriction on serving both notices, at the same time, within the same communication, in an email for example.

• CAR’s argument was that the payment notice did not describe itself as such, in contrast to the payless notice which did, nor did it refer to the relevant section of the Act.

• Placefirst’s submission was that it:
• • “intended to submit and did submit two separate documents, one being a payless notice and the other being a valuation; and
  • the worksheet attached to the email was, in form and in substance, a valuation such as one would expect to see in a payment notice”.

• The court concluded that the payment notice was valid because:
  • It was distinct from the payless notice;
  • It contained the necessary valuation details; and
  • Objectively, it was intended to serve as a payment notice.

• The Judge emphasised that it would be a shame if payment and payless notices had to be treated as ineffective, because one was not properly described and the other was sent too late owing to the complexity of the Act. He admonished an “unduly legalistic interpretation of the Act’s requirements”.

Key takeaways:

• A payless notice can be given before the time for a payment notice has elapsed.
• Note previous authorities which have held that deductions such as LD’s can only be made in a payless notice.
• Ensure payless notices and payment notices are described/identified as such.