Anwar Siraj & Anor v Teo Hee Lai Building Construction Pte Ltd  SGHC 200
In Anwar Siraj & Anor v Teo Hee Lai Building Construction Pte Ltd, the Singapore High Court granted leave to an arbitrator to withdraw from his appointment. In doing so, the court provided some clarification on the circumstances under which an arbitrator may lawfully resign, and the proper procedure for doing so.
In this case, following the setting aside of an arbitral award by the arbitrator, the plaintiffs applied for a second arbitrator to be appointed by way of Originating Summons 1200 of 2008 (“OS 1200”), after the arbitral award by the first arbitrator had been set aside by the court. The court appointed Mr Chow Kok Fong (“Mr Chow”) as the second arbitrator in respect of the disputes. The arbitration proceedings before Mr Chow, however, became problematic. The plaintiffs raised issues relating to the transfer of documents from the first arbitrator to Mr Chow, began to disagree with Mr Chow’s conduct of the arbitration, and made personal and unwarranted attacks against Mr Chow.
This led Mr Chow to write to the High Court, setting out his reasons for applying for leave to be discharged as the appointed arbitrator. At a hearing of the application, the plaintiffs did not object to Mr Chow’s application to be discharged. The plaintiffs affirmed twice that they were agreeable to Mr Chow’s withdrawal from the arbitration.
The plaintiffs’ submissions were summarised by the court as follows:
- When Mr Chow accepted his appointment as arbitrator, OS 1200 had been concluded, and OS 1200 could not be arbitrarily revived.
- As a non-party to OS 1200, Mr Chow had no locus standi to intervene in the OS 1200 proceedings.
- In OS 1200, the court had ordered that parties be at “liberty to apply - if Chow Kok Fong says he cannot for some reason or other be the Arbitrator.” The plaintiffs argued that Mr Chow could not subsequently apply to be discharged through the “liberty to apply” order made in OS 1200.
- The joint hearing of OS 1200 and Originating Summons 1179 (“OS 1179”) (being the plaintiff’s previous application to retrieve documents from the former arbitrator) took the plaintiffs by surprise and resulted in proceedings becoming excessively complicated and convoluted in breach of natural justice.
Right of an arbitrator to resign
The High Court held that whether an arbitrator has a right to resign is a matter of contract between the parties and the arbitrator. The arbitrator becomes a party to the previously bilateral arbitration agreement between the parties, and has the right to resign in circumstances specified in the contract. The arbitrator should not resign during the course of the arbitration “without good cause”, but would have the right to do so where there are unanticipated circumstances which would render it impossible or impracticable to continue the arbitration proceedings. In the court’s view, it was apparent from the correspondence between parties that the plaintiffs had lost their confidence, albeit unjustifiably, in Mr Chow’s ability to conduct the arbitration fairly and efficaciously. Given that the relationship between the plaintiffs and Mr Chow had deteriorated and become acrimonious, Mr Chow had a good and justifiable cause to resign.
Proper procedure for arbitrator’s discharge
The court held that Mr Chow was in fact not required to ask the court for leave to withdraw, and could have effectively done so by a simple letter. In this regard, the court noted that the Arbitration Rules of the Singapore Institute of Architects (2nd Edition, Reprint August 2013) do not prescribe a particular mode for an arbitrator to resign from his appointment. Similarly, the Arbitration Act is silent on the procedure for an arbitrator to resign. The court held that in the absence of any set procedure in institutional rules, national laws or the contract which set out the terms of appointment, a letter which clearly indicates the arbitrator’s wish to resign would be sufficient.
The court refrained from deciding whether there should be a notice period or a meeting to deal with consequential matters before the resignation takes place, but stated that it would depend on the circumstances of each case. In this case, Mr Chow had written to both parties seeking their consent to discharge himself as arbitrator, and the plaintiffs had responded stating that they had “no objection whatsoever… save as to costs”.
The court also observed there is generally no requirement for arbitrators to set out their reasons for resigning, and that the drafters of the UNCITRAL Rules had rejected proposals requiring a resigning arbitrator to provide a statement of reasons. In this case, Mr Chow had set out his reasons in full and had provided good reasons and proper cause.
Whether leave to withdraw was irregularly obtained
The court went on to consider whether, assuming Mr Chow was required to ask for leave from court, such leave had been irregularly obtained. It noted that under Order 45 rule 9(1) of the Rules of Court, any non-party who obtains an order or in whose favour an order is made, is entitled to enforce obedience to the order. In OS 1200, the court had ordered that there would be liberty to apply “if (Mr Chow) says he cannot for some reason or other be the Arbitrator”. The court agreed that the “liberty to apply” order was limited in scope, allowing parties to seek a fresh appointee if Mr Chow had declined his appointment, but did not extend to a situation where an arbitrator may subsequently apply for leave to be discharged under circumstances which arose after his appointment.
However, citing Order 2 rule 1 of the Rules of Court, the court noted that a failure to comply with the requirements of the Rules of Court will not nullify the proceedings, but be treated as an irregularity which the court may correct. The court should only refuse to correct an irregularity in cases of exception, where (a) it would result in prejudice, (b) the error is so serious that it cannot in principle be validated, (c) where the mandatory nature of the rule breached may be construed as excluding cure, and (d) where the substantive application would have failed. The court held that this was not an instance where the exceptions applied. The court added that it would have been a waste of time and money and also oppressive if Mr Chow was required to intervene as a party and take out a fresh application for leave to discharge himself.
Whether there was breach of natural justice
The court dismissed as groundless the plaintiffs’ allegation that there was a breach of natural justice when both OS 1200 and OS 1179 were heard together. The court found that the plaintiffs had been put on notice that Mr Chow was applying to discharge himself, and were aware that the two matters were being heard together. The court also held that the plaintiffs were given ample opportunity to be heard on Mr Chow’s application for discharge and had clearly said they did not wish to have him as the arbitrator.