Singapore High Court Sets Aside Arbitration Award for Insufficient Nexus

In DOM v DON [2025] SGHC 103, the Singapore High Court partially set aside an arbitration award in a construction dispute, ruling that the tribunal's decision to award consultancy fees lacked sufficient connection to the parties' submissions.

The dispute stemmed from a construction contract where DOM served as the main contractor for works on DON's factory building. Following project completion, multiple disputes emerged involving variation orders claimed by DOM and rectification costs for defects counterclaimed by DON.

The parties proceeded to arbitration in Singapore pursuant to their contractual arbitration clause. The tribunal required detailed Scott Schedules and ultimately granted awards to both parties: DOM received compensation for variation orders, while DON was awarded amounts for defects and consultants' fees.

The critical issue centered on the tribunal's contradictory reasoning. Despite repeatedly determining that a project manager was unnecessary, the tribunal nevertheless awarded half the requested fees, citing "insufficient evidence" as justification for the reduction. This inconsistency created a fundamental disconnect between the tribunal's factual findings and its ultimate decision.

The High Court found this reasoning breached natural justice principles. The tribunal's conclusion lacked sufficient nexus to the parties' arguments regarding whether consultants' fees were justified. A reasonable litigant could not have anticipated that fees would be awarded despite the tribunal's finding that the consultant was unnecessary.