PT Perusahaan Gas Negara v CRW Joint Operation: Setting Aside Arbitral Award for Exceeding Mandate
In PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation, the Singapore High Court heard an application by PGN to set aside a final arbitral award. The court, presided over by Justice Belinda Ang Saw Ean, allowed the application, finding that the arbitral tribunal exceeded its mandate by converting a Dispute Adjudication Board (DAB) decision into a final award without determining the merits of the underlying dispute. The court ordered costs to CRW.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Application allowed with costs
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The Singapore High Court set aside an arbitral award, finding the tribunal exceeded its mandate by enforcing a DAB decision without review.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| PT Perusahaan Gas Negara (Persero) TBK | Applicant | Corporation | Application allowed | Won | |
| CRW Joint Operation | Respondent | Other | Application dismissed | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Belinda Ang Saw Ean | Judge | Yes |
4. Counsels
4. Facts
- PGN and CRW entered into a contract for pipeline construction.
- A dispute arose regarding Variation Order Proposals and CRW’s request for payments.
- The dispute was referred to a Dispute Adjudication Board (DAB).
- The DAB ordered PGN to pay CRW US$17,298,834.57.
- PGN submitted a Notice of Dissatisfaction (NOD).
- CRW filed a request for arbitration with the ICC.
- The arbitral tribunal directed PGN to pay CRW the sum of US$17,298.834.57.
5. Formal Citations
- PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation, Originating Summons No 206 of 2010, [2010] SGHC 202
- PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation, Civil Appeal No 59 of 2010, [2011] SGCA 33
6. Timeline
| Date | Event |
|---|---|
| PGN and CRW entered into a pipeline construction contract. | |
| DAB ordered PGN to pay CRW US$17,298,834.57. | |
| PGN submitted a Notice of Dissatisfaction. | |
| CRW filed a request for arbitration with the ICC International Court of Arbitration. | |
| Hearing of Arbitration Case No 16122 took place. | |
| The majority members of the Arbitral Tribunal published its decision (viz., the Majority Award). | |
| CRW registered the Majority Award in Singapore as a judgment by way of an order of court. | |
| PGN filed OS 206/2010 to set aside the Majority Award. | |
| The High Court allowed PGN's application to set aside the Majority Award. | |
| The appeal to this decision in Civil Appeal No 59 of 2010 was dismissed by the Court of Appeal. |
7. Legal Issues
- Exceeding Arbitral Mandate
- Outcome: The court held that the arbitral tribunal exceeded its mandate by converting the DAB decision into a final award without determining the merits of the underlying dispute.
- Category: Substantive
- Sub-Issues:
- Converting DAB decision into final award without determining merits
- Acting outside powers conferred by arbitration agreement
- Breach of Agreed Arbitral Procedure
- Outcome: The court found that this was another facet of the same complaint under Article 34(2)(a)(iii) of the Model Law.
- Category: Procedural
- Breach of Natural Justice
- Outcome: The court did not accept PGN’s contention that the Majority Tribunal had breached the rules of natural justice.
- Category: Procedural
8. Remedies Sought
- Setting aside of arbitral award
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Construction
- Energy
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Government of the Republic of Philippines v Philippine International Air Terminals Co, Inc | Singapore High Court | Yes | [2007] 1 SLR(R) 278 | Singapore | Cited for the principle that the court will not interfere with an arbitral award even if the award was made on a misapplications of the law or contains errors of fact. |
| Lesotho Highlands Development Authority v Impregilo SpA | House of Lords (UK) | Yes | [2005] UKHL 43 | United Kingdom | Cited to raise the question of whether the Majority Tribunal purported to exercise a power which it did not have. |
| PT Asuransi Jasa Indonesia (Persero) v Dexia Bank SA | Singapore High Court | Yes | [2007] 1 SLR(R) 597 | Singapore | Cited as an example of a case where a tribunal exceeded its powers by dealing with matters that had not been submitted to it. |
| Tiong Huat Rubber Factory v Wah-Chang Int’l Co | Hong Kong Court | Yes | [1991] HKLY 51 | Hong Kong | Illustrates a challenge to an award under the New York Convention on the grounds that the arbitral tribunal dealt with a dispute that was not within the arbitration agreement. |
| Heyman v Darwins Ltd | House of Lords (UK) | Yes | [1942] AC 356 | United Kingdom | Cited for the principle that whether a dispute falls within an arbitration clause in a contract must depend on what the dispute is about and the kinds of disputes which the arbitration clause covers. |
| S A Shee & Co (Pte) Ltd v Kaki Bukit Industrial Park Pte Ltd | Singapore Court of Appeal | Yes | [2000] 1 SLR(R) 192 | Singapore | Cited for the principle that whether a dispute falls within an arbitration clause in a contract must depend on what the dispute is about and the kinds of disputes which the arbitration clause covers. |
| Soh Beng Tee & Co Pte Ltd v Fairmont Development Pte Ltd | Singapore High Court | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the principles regarding the setting aside of an arbitral award on the basis of a breach of the rules of natural justice. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
| UNCITRAL Model Law on International Commercial Arbitration | N/A |
| Order 69A Rule 2(1)(d) of the Rules of Court (Cap 322, 2006 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitral award
- Dispute Adjudication Board
- Notice of Dissatisfaction
- Arbitration agreement
- International Chamber of Commerce
- UNCITRAL Model Law
- FIDIC Conditions of Contract
- Majority Tribunal
- Binding but not final decision
15.2 Keywords
- arbitration
- DAB
- FIDIC
- Singapore
- construction
- contract
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| International Arbitration | 85 |
| Arbitration | 75 |
| International Commercial Arbitration | 70 |
| Contract Law | 60 |
| Construction Contracts | 40 |
16. Subjects
- Arbitration
- Contract Law
- Construction Dispute