Jurong Engineering v. Black & Veatch
DMC Rating Category: Developed
This Case Note was contributed by Ang & Partners, the Website’s International Contributors for Singapore
The plaintiffs, Jurong Engineering and the Defendants, Veatch Singapore, both of which were locally incorporated companies, entered into a contract for steel works for a power plant in Singapore.
The relevant part of the arbitration clause read:
Differences then arose between the parties. Jurong Engineering commenced arbitration under the SIAC Domestic Arbitration Rules. However, only the Singapore International Arbitration Centre ("SIAC") Arbitration Rules (which govern international arbitration) existed at the time the parties made the contract, i.e. on 4 January 2000. The SIAC Domestic Arbitration Rules only came into existence on 1 May 2001.
Veatch Singapore argued that the words in the arbitration clause could only refer to the SIAC Arbitration Rules since the SIAC Arbitration Rules were the only rules of SIAC in existence at the time of the contract. Jurong Engineering were, therefore, in breach in commencing the arbitration under the SIAC Domestic Arbitration Rules.
Veatch Singapore did not challenge Jurong Engineering’s contention that the arbitration was a domestic arbitration within the meaning in rule 1.2 of the SIAC Domestic Arbitration Rules*
Jurong Engineering took out the present application to seek a declaration that on a true construction of the arbitration clause, the reference to any arbitration being conducted "under and in accordance with the rules of arbitration promulgated by the Singapore International Arbitration Centre" was a reference to the rules of arbitration of the SIAC generally, at the time of the submission of the dispute to arbitration, and not an express reference to the SIAC Arbitration Rules. Given the arbitration was a domestic arbitration, the SIAC Domestic Arbitration Rules should apply.
The judge granted Jurong Engineering’s application.
2. While parties are free to specify SIAC Arbitration Rules to govern their arbitration even though it is a domestic arbitration, this must be done explicitly in the arbitration clause. In the absence of any such specification, the SIAC Domestic Arbitration Rules would apply to domestic arbitration (while the SIAC Rules would apply to international arbitration).
3. The subjective intention of Veatch Singapore in drafting the arbitration clause was irrelevant for the purposes of construing the arbitration clause.
* A domestic arbitration is described in rule 1.2 of the SIAC Domestic Arbitration Rules as one where all the parties at the conclusion of the arbitration agreement had their place of business in Singapore and where a substantial part of the obligations of the commercial relationship was to be performed in Singapore; or where the subject matter of the dispute is most closely connected with Singapore.
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