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Justice hurried is justice buried

In the recent case of Sai Wan Shipping Ltd v Landmark Line Co, Ltd. [2022] SGHC 8, the High Court set aside an award due to the breach of natural justice.

In this case, the Owner of a vessel brought an ad hoc arbitration against the Charterer over unpaid hire. Without consulting the Charterer on the time it would require, the arbitrator directed that the Charterer was to provide its defence by a specified date and time. Otherwise, the Owner may apply for a final and peremptory order. The Charterer failed to meet the deadline, and the arbitrator proceeded to issue a final and peremptory order for the Charterer to file its defence by a further set date and time. The Charterer failed to serve its defence submissions within the time stipulated. It only did so later the same day. The arbitrator excluded the Charterer’s defence submissions, unless the Owner was prepared to accept them into evidence.

The Charterer subsequently applied to set aside the final award on the basis that the fair hearing rule was breached.

The court found that the arbitrator should set a procedural timetable, consulting both parties on the appropriate procedure and timetable. Secondly, the tribunal should give reasonable opportunity for the defaulting party to explain its failure to comply.  Further, the court held that the sanction imposed on Charterer, barring it from raising any positive case or positive evidence, exceeded the arbitrator’s powers under Article 25 of the Model Law. The court concluded that the peremptory order had been made and enforced in breach of the fair hearing rule, and the arbitrator’s failure to demonstrate even-handedness in the handling of each party’s timelines had breached the equal treatment rule.

This judgment underscores the delicate balance that a tribunal must take in conducting the case expeditiously, whilst giving parties a reasonable opportunity to present their case.

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