In Coal & Oil Co LLC v GHCL Ltd [2015] SGHC 65, the Singapore High Court held that in the absence of express arbitral rules imposing a time limit for the release of an arbitral award, a 19 month delay in the issue of an award after parties’ final submissions was not a sufficient basis for setting aside the award.
In holding that such a delay was not per se against public policy, The Singapore High Court drew a distinction between the concept of public interest and public policy. While public interest was a wider concept that embraced everything conducive to the public good, violations of public policy only encompassed those acts which were so egregious that elementary notions of morality had been transgressed.
The Singapore High Court further observed that if the delay were truly intolerable, the plaintiff ought to have applied under Article 14 of the Model Law for the mandate of the arbitrator to be terminated before the Award was released, instead of making the argument of delay in setting aside proceedings after it knew that the Award was adverse to itself.
The Court also considered that the plaintiff’s complaint that the tribunal had failed to declare proceedings closed. It held that:
(a) the 1991 and 1997 of the SIAC Rules gave the tribunal a power but not a duty to declare hearings closed and did not expressly deal with a closure of proceedings.
(b) the 2007 SIAC Rules did not impose any duty on the tribunal to declare proceedings closed but merely a power to do so;
(b) In contrast, the 2010 and 2013 versions of the SIAC Rules imposed a duty to declare proceedings closed, if after consulting with the parties, it was satisfied that they had no further evidence or submissions to present. Following a declaration of the proceedings, the tribunal had an obligation to render a draft Award within 45 days.
In the present case, the 2007 rules applied and the Court held that the Tribunal’s failure to issue a declaration of proceedings, in the absence of proof of actual prejudice which could have reasonably altered the final outcome of the proceedings, would not amount to a breach of natural justice as it was not a material breach of procedure serious enough that it justified the exercise of the court’s discretion to set aside the award.
The plaintiff’s attempt to argue that it was prejudiced, amongst other reasons, because it had to pay additional interest due to the delay of the Award was rejected by the court as payment of interest was a consequence of arbitration rather than a factor which would have affected its outcome. The court further added that for as long as the Award had not been rendered, the plaintiff would have had use of the money and could have invested it profitably. Therefore, the plaintiff could not assert that it had been prejudiced by the imposition of interest. The plaintiff could show no other reason why the Tribunal’s delay in issuing the award had prejudiced the plaintiff in the preparation of its case.
While the Singapore Court had upheld the arbitration award in this case and took a narrow view of public policy in relation to delay in issuing awards, it made it clear that since 2012, many arbitral institutions have updated their rules to introduce time limits for the release of awards and that it would set aside an award if a time limit for an award had indeed expired because the mandate of the arbitrator ends with such time limit.
