Background
Bangladesh Rural Electrification Board (BREB), a Bangladeshi state-owned corporation, contracted with KSE Electricals Pte Ltd (India) to supply electrical distribution accessories. BREB later alleged that guy accessories supplied under four contracts had deficient zinc coating, relying on post-landing inspection and university test reports. It sought to reject the goods and impose a contractual penalty.
In the ad hoc arbitration, the tribunal proposed further joint testing because of concerns about the sampling evidence. The testing was not completed. The tribunal later dismissed BREB’s defective-goods and wilful-misconduct claims, and held that BREB owed KSE the unpaid balance for goods received. BREB applied to set aside parts of the award.
The Court’s Holding
Justice Kristy Tan dismissed the setting-aside application. The tribunal’s later direction to proceed with closing submissions regardless of whether further joint testing was completed superseded its earlier procedural order. That was a procedural decision within the tribunal’s discretion, not a breach of an agreed arbitral procedure. BREB had also not objected during the arbitration and instead invited a determination on the existing evidence.
The court also rejected BREB’s natural-justice challenges. The tribunal had determined the essential issues concerning whether zinc-coating testing was permissible during post-landing inspection and whether BREB had proved a zinc-coating deficiency. BREB’s arguments based on other contractual provisions, Bangladeshi sale-of-goods legislation, and the parties’ conduct were arguments within those issues, not separate essential issues requiring express treatment. As to wilful misconduct, BREB showed no real prejudice because its claimed consequential losses, including an alleged US$650,000 replacement-procurement loss, were not supported by sufficient evidence.
Key Takeaways
- A tribunal may revise procedural directions to move an arbitration forward when agreed testing has stalled.
- A party must raise a perceived procedural unfairness during the arbitration; it cannot reserve the point for a later setting-aside challenge.
- Failure to address every argument is not a natural-justice breach where the tribunal has decided the essential issues.
Why It Matters
The decision reinforces Singapore courts’ restrained supervisory role over arbitral awards. Attempts to reframe disagreements with contractual interpretation, evidential assessment, or case management as procedural or natural-justice errors will not succeed without a clear failure to determine an essential issue and real prejudice.
It also underlines the importance of making timely objections in an arbitration, especially where a party considers further evidence or testing indispensable to a fair determination.