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Rotomould (Fiji) Ltd v Deo Construction Development Co. Ltd [2015] FJHC 893; HBC61.2013 (17 November 2015)

IN THE HIGH COURT OF FIJI AT LAUTOKA
CIVIL JURISDICTION
(WESTERN DIVISION)

Civil Action No. 61 of 2013

BETWEEN:

ROTOMOULD (FIJI) LIMITED of Aliz Pacific, 8th Floor, BSP Life Centre, 3 Scott Street, Suva, in the Republic of Fiji.
PLAINTIFF

AND:

DEO CONSTRUCTION DEVELOPMENT CO. LIMITED of 11 Industrial sub division, Denarau Island, Nadi, in the Republic of Fiji.
DEFENDANT

RULING

Counsel : Ms B. Narayan for the Plaintiff
: Mr. A.K. Narayan (Jr) for the Defendant

PRELIMIARY ISSUE

1. Rotomould is seeking to set aside an arbitral award in favour of Deo Construction Development Co. Limited(“DCDCL”). At the hearing of the matter, a preliminary objection to the application was raised by Mr. AK Narayan (Jr.). He objected on the ground that the application before me was filed too late and should therefore be struck out.
   
2. The Originating Summons to set aside the award was filed on 12 April 2013 pursuant to Order 73 Rule 3 of the High Court Rules 1988. The award had been handed down on 20 February 2013.
3. Order 73 Rule 3 provides:
   

3.-(1) An application to the Court-

(a) to remit an award under section 11(1) of the Arbitration Act, or

(b) to set aside an award under section 12(2) of that Act or otherwise,

must be made, and the summons or notice must be served within 21 days after the award has been made and published to the parties

4. Clearly, the Originating Summons in this case was filed well outside the 21 days period stipulated by Order 73(3)(1)(b). Mr. Narayan argues that the time limit stipulated under Order 73 Rule 3(1) is mandatory. He emphasises that Order 73 makes no provision for abridgement of time.
   
5. I start with the salient point that, throughout the common law world, an arbitral award is given a certain measure of sanctity (see discussion later on in this ruling). This does not mean that an award cannot be impugned. Rather, it means that it will normally be hard to disturb an arbitral award. Perhaps that explains the rigidity in the tone of Order 73(3)(1)(b). However, there is, yet, a discretion to extend time vested in this Court. This discretion is conferred by Order 3 Rule 4 of the High Court Rules 1988.
   
6. Russell On Arbitration(19th ed.)(1979)[1], in his analysis of the English Arbitration Act 1950 confirms as follows at page 496:
   

An application to set aside or remit an award may be made at any time within six weeks after the award is made and published to the parties (citing the English Order 73 Rule 5). But this time may be extended (under the English Order 3 Rule 5).

7. The same applies in Fiji by application of our corresponding Orders and Rules[2]. Fiji’s Order 3 Rule 4 sub-rules (1),(2) and (3) read:
   

Extension, etc., of time (O.3, r.4)

4.-(1) The Court may, on such terms as it thinks just, by order extend or abridge the period within which a person is required or authorised by these rules, or by any judgment, order or direction, to do any act in any proceedings.

(2) The Court may extend any such period as is referred to in paragraph (1) although the application for extension is not made until after the expiration of that period.

(3) The period within which a person is required by these Rules, or by any order or direction to serve, file or amend any pleading or other document may be extended by consent (given in writing) without an order of the Court being made for that purpose.

8. In the exercise of the discretion conferred under Order 3 Rule 4, the court must take into account such factors as the length of the delay, the reasons for it, the prejudice if any that would be done to the other parties if the application were permitted to proceed, and the merits of the applicant's case.
   
9. In Invercargill City Corporation v. Dick[3], Henry J of the New Zealand Supreme Court was asked to consider whether or not the delay in moving to set aside an arbitral award was reasonable or not. Notably, the New Zealand Arbitration Act which was then in force fixed no time limit for the making of such an application. Held (as per headnotes):
   

A discretion as to time such as that which has been applied in reference to ss.11 and 12 of the Arbitration Act 1908 should not be confined to grounds which were either accepted or rejected in previous cases. Such cases may be considered as giving a general indication of the practice of the Courts, and to that extent are persuasive but not binding precedents.

Where there has been delay in moving to set aside an award, prejudice suffered by the other party may be considered as a factor in determining whether or not the delay is reasonable or unreasonable.

Where an award is manifestly unjust and wrong, the Court should not refuse to set it aside on the sole ground that there was delay in making the application.

10. In Ishmail v Polish Ocean Lines[4], notwithstanding an oversight on the part of the lawyers in filing on time, an extension was allowed as no perceivable prejudice would be done to the opposing party.
    
11. In the case before me, I exercise my discretion under Order 3 Rule 4 in favour of extending the time. In doing so, I am influenced by the fact that (i)the award in question was made some twelve months after the appointment of the arbitrator and (ii) one of the grounds on which Rotomould seeks to impugn the award is the very fact that it was handed down so late (further discussion below). Suffice it to say here at this time that clause 3 of the First Schedule to the Arbitration Act (Cap 38) stipulates that an Arbitrator:
    

“...shall make their award in writing within three months after entering on the reference, or after having been called on to act by notice in writing from any party to the submission, or on or before any later day to which the arbitrators, by any writing signed by them, may, from time to time, extend the time for making the award”.

INTRODUCTION

12. The question is whether or not I should set aside the award of a certain Arbitrator. Section 12(2) of Fiji’s Arbitration Act (Cap 38) gives me power to set aside an arbitral award on two specific grounds. Yet, other provisions of the Act appear to give some measure of sanctity to the arbitral process and award. Section 3 for example, provides that a submission is irrevocable except by leave of the court or by mutual consent[5]. And clause 8 of the First Schedule to the Act states[6] that an award is final and binding on the parties[7].
    
13. There are two competing philosophies involved here. The first, perhaps a spin-off of the laissez -faire and freedom-of-contract tradition, sees arbitration purely in terms of the parties’ agreement. Proponents argue that courts should not interfere with any arbitral process or award because the parties’ have, out of their own volition, agreed to submit to arbitration, have handpicked the arbitrator, and, by their very agreement, conferred jurisdiction[8] (and its scope) to the Arbitrator. Accordingly, the parties are taken to accept, expressly or impliedly, the finality of the arbitrator’s award[9].
    
14. It is also often mooted that the public has an interest in ensuring the finality of arbitral awards (e.g. the Singaporean High Court in TMM Division Maritima SA de CV v Pacific Richfield Marine Pte Ltd [10">[10]).InSoh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd[11]the Singaporean Court of Appeal said that foitration to work as an ADR, ADR, it must have autonomy. Accordingly, its awards must be recognised as being final[12] and parties must accept a very limited recourse to the courts[13] and that, on the rare occasion that the court will intervene, it will do so not as an appellate court[14].
    
15. The second view argues that the court may interfere in the arbitral process or with an award in the name of public policy. Proponents argue that public interest demands that every arbitration process operates according to acceptable standards of natural justice and uniformity. Hence, the state, through the courts, may interfere if only, to ensure that these standards are adhered to.
    
16. Both theories are relevant. But where to draw the line is a vexed question. The New Zealand Law Commission[15] summarises the dilemma thus:
    

Arbitration law concerns a critical balance: .. to be struck between the autonomy of the parties and the law of the land. On the one side .. is the agreement of the parties. The parties to a contract or to a dispute agree that their disputes are to be resolved by a tribunal which they establish themselves or to which they agree. The tribunal is to follow a procedure on which the parties may agree, and is to apply the law which they may state. The parties also, in general, pay for the arbitration. That is to say, the whole process rests on the parties' consent and is their creation. But not quite. For on the other side .. is the significant weight of the general law of the land. The very agreement that sets up the tribunal is an agreement under some system of law. It is national law, with national courts, which can be used to require a reluctant party to submit to arbitration, and to enforce any resulting award. The law may state the procedure to be followed. The law might, as well, also be used to control the arbitrator. To what extent should the courts, enforcing their perception of the law and of procedural fairness, be free to override the decision of the arbitral tribunal and to upset the conclusions reached through that consensual process? To what extent should judicial supervision be able to undermine the advantages of informality, privacy, expedition, expertise and cost which arise from the agreement? And what matters cannot be made the subject of arbitration, that is of the parties' private ordering?

17. Successive legislative reforms in England, Australia and New Zealand over the years attest (perhaps) to the fact that the quest for that ideal balance between contractual autonomy and state intervention is an ongoing one. In some jurisdictions, there has been a progress towards lesser court “intervention”[16].
    

BACKGROUND

18. The background to this matter is reported in paclii in an earlier ruling I had given (Rotomould (Fiji) Ltd v Deo Construction Development Co Ltd [2014] FJHC 245; Civil Action 61.2013 (10 April 2014).In 2011, Rotomould accepted the tender of DCDCL as contractor to construct a commercial building and warehouse just on the outskirts of the municipality of Lautoka. The parties purportedly terminated their agreement mutually when work was not progressing according to the agreed schedule. I say “purportedly” because, one of the issues that arose before me is whether in fact the mutual termination was effective.
    
19. Under their contract, DCDCL was to carry out and complete the work in 26 weeks from03January, 2011 to04 July, 2011. These dates were critical to Rotomould. After the termination of their contract, some issues of compensation arose. The parties could not resolve their differences on these. They then resorted to arbitration (see Appendix 1 for a full chronology of all communication leading up to termination of the agreement and subsequently, arbitration). The Arbitrator appointed was a Mr. Fraser Clark. Both parties made submissions to Mr. Clark, who, I understand, is a highly qualified and experienced Architect in Fiji. Almost a year after Clark’s appointment, he handed down an award.
    
20. The main difference between Rotomould and DCDCL was: which party had breached the agreement? Rotomould would argue that time was of the essence in the agreement, which, DCDCL breached through its delay. That delay gave it a right to determine the agreement.
    
21. DCDCL on the other hand, cites the following reasons for the delay.
    
    • (i) spate of bad weather around the agreed time for commencement of construction
      
    • (ii) subdivision plan not approved.
      
    • (iii) survey plan not done.
      
    • (iv) stop work order by Lautoka Rural Local Authority
      
    • (v) building plans not approved.
      
    • (vi) increase in price of building materials and fuel.
      
22. Rotomould would say that, other than the spate of unfavourable weather, the other excuses DCDCL gives for the delay were unreasonable or were outright lies. When the parties could not resolve their differences, Rotomould then wrote to DCDCL on 23 May 2011 terminating their agreement (see Appendix 1for the full chronology and Appendix 3 for an extract of the award).
    

ROTOMOULD’S ORIGINATING SUMMONS

23. Rotomould desires to have the award set aside and/or for this Court to determine the correct amount to be remunerated to DCDCL for work it carried out. Its Originating Summons[17]also seeks a declaration that the Arbitrator misconducted himself and/or improperly procured the award. It alleges that the Arbitrator:
    
    • (i) failed to properly consider all evidence presented by the plaintiff.
      
    • (ii) failed to accept any verbal argument from both the plaintiff and the defendant when both parties insisted on the same.
      
    • (iii) failed to consider that there was no “Stop Work Notice” issued by the Lautoka Rural Authority at any point prior to or during the duration of the contract period.
      
    • (iv) failed to order the transfer of all materials offsite and onsite to the plaintiff or give credit to the plaintiff for the said materials.
      
    • (v) went beyond his powers by inter-alia awarding loss of profit to the defendant pursuant to a breach of contract without any evidence of loss of profit provided by the defendant nor this being an issue to be determined, the contract being mutually terminated.
      
    • (vi) took into account irrelevant considerations and made errors in law.
      
    • (vii) delayed unnecessarily in handing down the award and refused to obtain terms of reference.
      
24. The affidavits of one Prakash Chand[18]and of one Sanjay Patel[19] are filed in support of the Originating Summons. Vimal Deo, a director of DCDCL, has sworn an affidavit in opposition. Presently, there is a stay on the enforcement of the award and an injunction restraining a threatened winding up petition. These were ordered after Rotomould paid the award sum into Court.
    

ISSUES

25. This court has a discretion under section 12(2) of the Arbitration Act to set aside an award if the Arbitrator has, either misconducted himself, or, if he has improperly procured the award.
    

Power to set aside award

12.-(2) Where an arbitrator or umpire has misconducted himself, or an arbitration or award has been improperly procured, the court may set the award aside.

26. The term “misconduct” does not mean moral turpitude on the part of the Arbitrator. Rather, it means lack of procedural fairness. The law books are abound with cases on this point. But Atkin J’s definition in Williams v Wallis and Cox[20]is apt in terms of the main issue in this case:
    

That expression does not necessarily involve personal turpitude on the part of the arbitrator, and any such suggestion has been expressly disclaimed in this case. The term does not really amount to much more than such a mishandling of the arbitration as is likely to amount to some substantial miscarriage of justice, and one instance that may be given is where the arbitrator refuses to hear evidence upon a material issue.

27. Notably, according to Russell at page 428, the Court has an inherent power to set aside an award on other grounds.
    

The court has further an inherent power to set aside an award which is bad on its face: either as involving an apparent error in fact or law, or as not complying with the requirements of finality and certainty. The inherent power to set aside also extends to an award which exceeds the arbitrator’s jurisdiction and possibly to cases where fresh evidence has become available.

28. An award will be taken to have been improperly procured by an Arbitrator when there is an improper relationship between the arbitrator and a party or a party’s solicitor[21].
29. Only after a finding of “misconduct” and/or, “improper procurement” of the award, will the question then arise: should the award be set aside or not? According to Russell on Arbitration (supra) at page 432:
    

In the exercise of its discretion a court may refuse to interfere with an award even where there exists one of the grounds on which awards may be remitted or set aside.

APPROACHING THE ISSUES

30. I adopt the method of Lord Justice Diplock[22]in London Export Corporation Ltd v Jubilee Coffee Roosting Co Ltd[23]as the “operating” structure within which to approach the issues. Accordingly, I structure my inquiry as follows:
    

(i) first, I look at the arbitration agreement to see if the parties have stipulated a procedure therein. If so, and if the award was reached in breach of the agreed procedure, Rotomould will be entitled to have the award set aside[24] “simply because the parties have not agreed to be bound by an award made by the procedure in fact adopted”.

(ii) second, if the Arbitrator had followed the agreed procedure, I may still set aside the award on public policy[25] if the circumstances warrant it. Here, I will consider inter-alia whether or not the Arbitrator was still in breach of the principles of natural justice[26].

(iii) however, if the parties had not expressly agreed on a procedure, I must then look to examine whether a “procedure” may be implied from the written agreement, the Arbitration Act, and/or the surrounding circumstances including any custom or trade practice[27].

31. At this point, I caution myself that the jurisdiction conferred by section 12(2) is not an appellate one. Rather, it is a first-instance jurisdiction[28]. This means that I must not embark upona narrow textual analysis of the award[29]. It means also that I must avoid re-examining the issues decided at arbitration, unless absolutely necessary. In the event that it becomes absolutely necessary to re-examine the issues, I must still avoid being too “picky”[30]. All in all, this means that I must start on the premise that the award is sacrosanct.
    
32. The sanctity of an award depends on the degree of finality it is given. Indeed, as one will come to learn, “finality” is a question of degree. The word “final” means that it is a conclusive ruling on all the matters referred.
    
33. In Fiji, clause 8 of the First Schedule to the Arbitration Act implies in every submission that:
    

8. The award to be made by the arbitrators or umpire shall be final and binding on the parties and the persons claiming under them respectively.

34. Section 4 provides:
    

A submission, unless a contrary intention is expressed therein, shall be deemed to include the provisions set forth in the First Schedule in so far as such provisions are applicable to the reference under submission

35. When the above provisions are read together, they would appear to give effect to the following words of Russell on Arbitration (supra) at page 378:
    

Unless there is an express provision in the arbitration agreement that it shall have temporary effect only, or it is an interim award, a valid award on a voluntary reference operates between the parties as a final and conclusive judgement upon all matters referred.

36. In the case before me now, I find nothing in the parties’ agreement that limits the finality of Mr. Clark’s award in any way.
    

DID THE PARTIES STIPULATE A PROCEDURE? IF NOT, ARE THERE TERMS TO BE IMPLIED?

Express Agreement

37. Rotomould’s and DCDCL’s contract was formed when Rotomould’s Architect accepted(on 06 December 2010) DCDCL’s tender (see Appendix 1). No provision for arbitration, let alone any procedure for such, was expressly agreed between the parties. However, the parties both acknowledge that the Fiji Standard Form of Building Contract (Without Quantities Private Edition 1978) (“FSFBC”) is incorporated into their agreement.
    
38. The FSFBC makes provision for arbitration in clause 33. However, this arbitration clause does not stipulate any particular arbitral process or procedure.
    
39. I then turn to the Arbitration Act to see if a procedure can be implied from its provisions. The First Schedule to the Act sets out some standard terms. As discussed, these terms are implied in any given submission, unless the parties’ expressly agree to the contrary. This is all by operation of section 4.
    
40. Rotomould and DCDCL have made no express agreement to exclude the application of any provision of the First Schedule. Hence, every single clause in the First Schedule is taken to be implied into their agreement. I must then look at the procedural course adopted by the Arbitrator, and, determine whether he had breached any procedure in the Act.
    

Procedural Course Adopted By Arbitrator

41. I observe that the Arbitrator had simply determined the issues before him from the submissions filed by both counsel and from the documents placed before him. He did not direct the filing of any pleadings. Nor did he see it fit to hear any viva voce evidence, or to even hear counsel make oral submissions. Appendix 2 sets out a chronology of emails between counsel and the Arbitrator. From these emails, it is clear that the Arbitrator had simply directed the parties to file their documents, complete discoveries, and file submissions. Both counsel did plead with the Arbitrator on several occasions for an opportunity to make oral submissions. However, these were ignored. The question is: did the Arbitrator breach any minimum standard of procedural fairness in refusing to heed counsel’s pleas? I must answer this question in terms of both the Arbitration Act says and the common law.
    

Arbitration Act

42. Clause 6 of the First Schedule provides:
    

The parties ......, shall, subject to the provisions of any law for the time being in force, submit to be examined by the arbitrators ..... on oath or affirmation in relation to the matters in dispute, and shall, subject as aforesaid, produce ..... all books, deeds, papers, accounts, writings and documents within their possession or power respectively which may be required or called for, and do all other things which, .....the arbitrators or umpire may require.

43. The first part of clause 6 imposes an obligation on the parties to submit to be examined by the Arbitrator. But I see no express provision obliging the Arbitrator to examine the parties orally, whether on oath or affirmation. It appears then that the Act and the First Schedule simply confer upon the Arbitrator a discretion to call sworn viva voce evidence (in the absence of an agreed procedure).
    
44. The second part of clause 6 imposes an obligation on the parties to produce all documents in their possession or power which the Arbitrator may require or call for. The language of clause 6 appears also to give a discretion to the Arbitrator to require or call for these materials. Logically, it must be a discretion that is to be exercised almost as if it is a duty, given the tremendous importance of such material.
45. Clause 7 provides:
    

The witnesses on the reference shall, if the arbitrators or umpire think fit, be examined on oath.

46. Again, the above appears to give the arbitrator a discretion to examine witnesses on oath. Notably, section 14 empowers only the High Court to subpoena any witness (who are not parties) to attend before any arbitrator[31].
    
47. In this case, because the parties have not expressly stipulated any procedure, and neither does the Act, it would seem that what the Act does is to leave it open to the discretion of the Arbitrator to adopt a procedure of his choice. I am fortified in that comment by the observations of Russell on Arbitration (supra) in his review of the English Arbitration Act 1950 at page 288:
    

An arbitrator or umpire has power, unless the arbitration agreement expresses a contrary intention, to examine on oath or affirmation the parties and witnesses appearing before him. He is not however, compelled to take evidence on oath: the matter is within his discretion, unless the mode of examination is expressly stipulated for in the arbitration agreement.

And at page 461:

The arbitrator has in general a discretion as to the manner in which the reference is to be conducted. The Court will not review that arbitrator’s discretion, provided he acts within his authority and according to the principles of justice and behaves fairly to each party..............Like the discretion of any other tribunal, the arbitrator’s discretion must be exercised judicially, on costs as well as on substantive matters.

48. The question to ask then is, whether it was within the Arbitrator’s authority and in line with the principles of natural justice, to refuse to grant an audience to counsel?
    

Common Law – Duty To Act Fairly

49. All the cases I have reviewed confirm the position that, whatever procedural course the Arbitrator takes, he has a duty to act fairly[32]. This duty applies both in the conduct of the proceedings and right throughout the reference.
    
50. Russell on Arbitration at pages 225 to 230 discusses this general duty as entailing:
    
    • (i) the duty to hear each party in the presence of the other.
      
    • (ii) the duty not to receive information from one side which is not disclosed to the other, whether the information is given orally or in the shape of documents.
      
51. General duties which Russell discusses are:
    
    • (i) duty to decide on disputes submitted and no more
      
    • (ii) duty strictly to comply with terms of submission
      
    • (iii) duty to decide according to law
      
52. Russell also discusses some general procedural powers that Arbitrators enjoy at pages 232 to 238.
    
53. Opinions appear to differ as to whether the duty to act fairly means that the arbitrator must follow a procedure modelled on that of the court. Undoubtedly, in the absence of an express procedure stipulated by the parties, it would be ideal if all Arbitrators followed the courts’ procedural rules. But, to what extent might an Arbitrator be allowed in the exercise of his own discretion, to depart from such an ideal course without necessarily compromising his duty to act fairly?
    
54. According to Mustill & Boyd, The Law and Practice of Commercial Arbitration in England (1982)[33], the common law position is that the Arbitrator must follow an adversarial procedure modelled on that of the court (unless otherwise authorised by the parties). This means that he must hold a hearing, apply rules of evidence, and base his decision on parties’ arguments and evidence[34].
    
55. Russell on Arbitration(supra) at page 232, said that arbitration “need not follow the procedure laid down for proceedings in a court of law”. He adds that it is sufficient if “the practice of a particular trade in relation to its arbitrations” is followed, so long as it is fair to both parties[35].
    
56. In Andrews v Mitchell[36], Lord Halsbury warns however that an arbitrator who is not legally qualified is bound to make slips if asked to adopt of procedural course modelled on that of a court of law. However, so long as those slips are on “matters of form” rather than substantive slips, the court should not interfere[37]. He opines, in the particular case before him, that:
    

...... the mode in which the whole thing arose and was disposed of was so slipshod and irregular that it might lead to injustice.

57. The question I ask at this time is, what are some of the basic things that an Arbitrator who is not legally qualified, should be expected to observe, to ensure that he disposes the matter not in a slipshod and irregular manner which might tend to lead to injustice?
    

Common Law Minimum Standard of Fairness

58. In Rv Deputy Industrial Injuries Commissioner, ex – parte Moore[38], Wilmer, LJ at page 487, said natural justice:
    

... involves ... [hearing] both sides, assuming that he[i.e. the Arbitrator] has been requested to grant a hearing, and ..... [allowing] both sides to comment on or contradict any information that he has obtained. This would doubtless apply equally in the case where a hearing had been requested, but refused, for in such a case it would not be in accordance with natural justice to acton information obtained behind the backs of the parties without affording them an opportunity of commenting on it[39].

59. In the same case, Lord Justice Diplock said at pages 488 to 490 that natural justice means basing one’s decision on evidence, that is, on material “which tends logically to show the existence of facts relevant to the issue to be determined”[40] rather than an adherence to the technical rules of evidence.
    
60. Diplock LJ adds that the rules of natural justice also means that, if a hearing is requested, listening fairly to the contentions of all persons who are entitled to be represented at the hearing[41]. This entails:
    

(a) ...consider[ing]such “evidence” relevant to the question to be decided as any person entitled to be represented wishes to put before him;

(b) inform[ing] every person represented of any “evidence” which the deputy commissioner proposes to take into consideration, whether such “evidence” be proffered by another person represented at the hearing, or is discovered by the deputy commissioner as a result of his own investigations;

(c)allow[ing] each person represented to comment upon any such “evidence” and, where the “evidence” is given orally by witnesses, to put questions to those witnesses; and

(d)allow[ing] each person represented to address argument to him on the whole of the case. This in the context of the Act and the regulations fulfils the requirement of the second rule of natural justice to listen, fairly to all sides ...

61. In TrusteesofRotoairaForestTrustv Attorney-General[42], Fisher J of the New Zealand High Court, relying on Mustill & Boyd (supra), gave the following guidelines:
    
    1. Each party must have notice that the hearing is to take place.
       
    2. Each party must have a reasonable opportunity to be present at the hearing, together with his advisers and witnesses.
       
    100. Each party must have the opportunity tobe present throughout the hearing.
         
    4. Each party must have a reasonable opportunity to present evidence and argument in support of his own case.
       
    5. Each party must have a reasonable opportunity to test his opponent's case by cross-examining his witnesses, presenting rebutting evidence and addressing oral argument.
       
    6. The hearing must, unless the contrary is expressly agreed, be the occasion on which the parties present the whole of their evidence and argument.”
       

Did The Arbitrator Breach His Duty to Act Fairly?

62. The parties did not stipulate any express procedure. Accordingly, the Arbitrator cannot be said to have committed a breach in that regard. The Act (and First Schedule) gives the Arbitrator such a wide discretion as to which procedure to adopt. When both counsel were pleading with the Arbitrator for an opportunity to make oral submissions before him, the Arbitrator was being called upon to exercise his general procedural power in a particular way. I am of the view that it was then incumbent upon the Arbitrator, to exercise his discretion in accordance with his common law duty to act fairly, and to take heed of their pleas. I say this on the basis of the above cited cases. Because he did not do so, he committed a misconduct in terms of section 12(2). Having said that, the discretion then becomes available to me, at this time, as to whether or not the Award should be set aside? Before I do so, there is nothing to suggest, contrary to Rotomould’s argument, that it had pleaded with the Arbitrator for an opportunity to call viva voce evidence, let alone, on which aspect of the issues would require viva voce evidence. The trail of correspondence in Appendix 2 merely establishes that counsel were merely seeking to be heard on submissions.
    

SHOULD THE AWARD BE SET ASIDE ON ACCOUNT OF THE BREACH OF NATURAL JUSTICE OR ON ANY OTHER GROUND?

63. I have found above that the Arbitrator did commit misconduct by not heeding counsels’ pleas to be heard on submissions. But that irregularity can only merit the setting aside of the award if the court is satisfied that as a result of that breach, Rotomould has suffered a substantial injustice.
    
64. As McNair J in Rotheray (E.) & Sons Ltd v Carlo Bedarida & Co[43]observes:
    

The more difficult question, however, is whether the extent of that irregularity is such as to justify interference by this court either by way of setting aside the award or remitting the award. The determination of that issue...depends upon whether the court is satisfied that there may have been – not must have been – or that this irregularity may have caused – not must have caused – a substantial miscarriage of justice that would be sufficient to justify the setting aside or remitting of the award, unless those resisting the setting aside or remission could show that no other award could properly have been made than that which was in fact made, notwithstanding the irregularity.

...

65. As I have set out above at paragraph 27, this court also has an inherent power to set aside the award if it:
    
    • (i) is bad on its face, either as involving an apparent error in fact or law
      
    • (ii) does not comply with the requirements of finality and certainty
      
    • (iii) exceeds the arbitrator’s jurisdiction
      
    • (iv) possibly, as Russell argues at page 428, where fresh evidence has become available.
      
66. Although an Arbitrator’s award is final, it will be set aside if an error of law is allowed to appear on its face, unless the error is immaterial to the decision (Buerger v Barnett)[44]. On the other hand, as Russel points out at page 447 - 448:
    

Where an arbitrator makes a mistake either in law or in fact in determining the matters referred, but such mistake does not appear on the face of the award, the award is good notwithstanding the mistake, and will not be remitted or set aside.

An error of law on the face of the award means that you can find in the award or a document actually incorporated thereto, as, for instance, a note appended by the arbitrator stating the reasons for his judgement, some legal proposition which is the basis of the award and which you can then say is erroneous.

Unless upon the face of the award we can distinctly collect what the Arbitrator intended to decide, and that we can see that he has decided wrongly, the court will not interfere.

67. Motta J in Gunter Henck v Andre & Cie S.A[45]
    

It is well established on the authorities that although the courts are entitled to and indeed, must set aside awards containing errors of law on their face, this jurisdiction is not lightly to be exercised. If parties choose to have their disputes settled by arbitrators, then subject to certain limited exceptions, the attitude of the courts has been that the parties should take arbitration for better or for worse.

68. Below I consider whether or not the irregularity in the breach of natural justice may have been and/or may have caused a substantial miscarriage of justice to Rotomould. In addition, I consider the various heads of complaints that Rotomould states in its Originating Summons in terms of the other grounds for setting aside set out above in paragraph 67.
    

Essence of Time

69. It is submitted that, because the Arbitrator did not hear counsel’s oral submissions, he could not have properly assessed the evidence that was before him and as a result, he would have had a rather patchy view of the legal rights and obligations of the parties. One of the main things that the Arbitrator is alleged to have overlooked or ignored in this regard is the fact of the essence of time in the construction contract. It is argued that there was ample evidence that DCDCL had delayed - resulting in the loss of the project’s time objectives and a cost overrun to Rotomould. Rotomould argues that, had the Arbitrator heard oral submissions from counsel, the evidence implicating DCDCL’s breach would have been properly contextualised. It meant also that the Arbitrator would be oblivious to the (alleged) fact that the excuses DCDCL gave were either unreasonable or were outright lies.
    
70. What Rotomould is saying essentially is that, if counsel had been allowed to make oral submissions, they would have addressed the Arbitrator properly on which of them actually breached the agreement. In arguing this, Rotomould appears to be contradicting itself as to what exactly was the terms of reference to the Arbitrator (see below Rotomould’s head of complaint – exceeding jurisdiction).
    
71. Apart from that, I cannot find anything in the Award to suggest that the award is bad on its face and/or that the Arbitrator failed to properly assess the evidence. In his award (see Appendix 3), the Arbitrator first noted that the parties’ contract was formed when Rotomould’s Architect accepted DCDCL’s tender vide a letter of acceptance dated 06 December 2010. He also found the following:
    
    • the said letter of acceptance stipulated that the site would be available from 08 December 2010,
      
    • that the commencement date would be 03 January 2011, and
      
    • that the completion date was to be 04 July 2011 (i.e. 26 weeks of construction time).
      
    • he then observed that when the parties reached agreement, no building permit had been issued by the LRLA.
      
    • he commented that it would be illegal to commence construction on site without such a building permit. The building permit was not issued until 28 April 2011.
      
    • having observed the above, the Arbitrator then found that time should have been extended so as to allow the 26 weeks construction time to be calculated from 28 April 2011 to 27 October 2011.
      
72. I am of the view that the conclusion that the Arbitrator reached was not so perverse. In saying that, I believe I am fortified by the trail of correspondence between the parties in Appendix 1 which shows clearly that around March and April 2011, they were still exchanging emails about the delays in the approvals. In fact, there was even one email from Rotomould’s Architect suggesting that the cause of all the delay, as told to him by officers from LRLA, was in the late approval for subdivision from the Director of Town and Country Planning. This confirms that the approvals were not in place even after the agreed starting date.
    
73. The trail of emails also show that in February, engineering designs were being revised by the Engineers.
    

Letter of Elia Lawena

74. Rotomould appears to think that the Arbitrator had completely ignored or overlooked a letter written by one Mr. Elia Lawena, a senior official of the LRLA. Clearly, Rotomould had intended to use that letter as evidence to refute DCDCL’s excuse that its delay was due in most part to the Stop Work Notice by LRLA.It appears that DCDCL is alleging that it was “advised” by LRLA not to commence work until all approvals were in place. It seems that Mr. Lawena’s letter is intended to refute the allegation that LRLA did advice DCDCL as such and/or that the approvals were always in place. Suffice it to say that, if LRLA did in fact DCDCL as alleged, such an advice would only be a responsible one, and in line with LRLA’s core responsibilities of ensuring regulatory compliance.
    
75. Mr. Lawena’s intimation that the consents and approvals were in place all along appears relatively feeble when held up against the trail of emails between the parties. The emails tend to confirm that the approvals were not always in place at all material times. In light of that, the Arbitrator could be excused if, (i) in fact he had formed the view that it would be a superfluous exercise to have to call oral sworn evidence to determine the truth or falsity of the letter, or (ii) if he did overlook to consider the letter. I think Mr. Lawena’s letter would have carried little weight when held up againstthe trail of emails in Appendix 1.
    

Expert Skill

76. The Arbitrator, Mr. Clark, is a qualified Architect with tremendous experience in the building industry in Fiji. Like all Arbitrators with specialist skills, he is entitled (in fact he is expected) to make use of his own expert knowledge.
    
77. In Johnson v Cheape[46], as reported by Russell, a submission recited that the Arbitrator had been appointed on account of his skill and knowledge of the subject. One of the parties brought before him a statement of certain facts which the party alleges to be material, and offered to support it by proof. The House of Lords held that the Arbitrator was justified in refusing to receive it, if, taking all matters alleged to be facts into consideration, with his own local knowledge to guide him, and all the circumstances in his view, he felt that such facts would have no effect upon his determination.

Unjust Enrichment?

78. Rotomould is also aggrieved about that part of the award wherein DCDCL was being compensated for some building materials it had bought for the project, but which are still in DCDCL’s possession. It submits that this amounts to an unjust enrichment because there was no Order for DCDCL to give up the materials to Rotomould.
    
79. This part of the award can be remitted to the Arbitrator under section 11 of the Arbitration Act.
    

Power to remit award

11.-(1) In all cases of reference to arbitration, the court may from time to time remit the matters referred, or any of them, to the reconsideration of the arbitrators or umpire.
(2) Where an award is remitted the arbitrators or umpire shall, unless the order otherwise directs, make their award within three months after the date of the order.

80. Section 11 obviously gives power to this court to remit part only of the matters referred as opposed to remitting the entire award. For the avoidance of doubt, I direct that the Arbitrator is to deal only with this particular matter on remission (i.e. the release of the materials and fabricated steel by DCDCL to Rotomould). Once the materials have been released to Rotomould, DCDCL may then apply to this Court for the release to it of the award sum which is deposited in this Court.
    

Exceeding Jurisdiction?

81. The issue has also arisen between the parties as to whether or not the Arbitrator exceeded his jurisdiction in awarding loss of profit in favour of DCDCL. The general jurisdiction of an Arbitrator derives from the arbitration clause in their agreement, which, in this case, is clause 31 of the FSFBC. The jurisdiction in each particular case depends on the particular terms of the submission to the Arbitrator.
    
82. As Russell on Arbitration (supra) points out at page 219:
    

It must always be remembered that an arbitrator derives his authority from the agreement between the parties, and that consequently his powers and duties are only those that the parties have agreed to place upon him.

83. The issues to be considered at this stage are:
    
    • (v) what is the general jurisdiction of the Arbitrator in terms of the FSFBC?
      
    • (vi) what were the terms of reference to the Arbitrator?
      
    • (vii) did the Arbitrator exceed the general jurisdiction and/or those terms of reference?
      
    • (viii) if he did, should the award, or part of it, be set aside on that account alone?
      
    • (ix) if he did not exceed his jurisdiction, was the amount he awarded on loss of profit reasonable?
      
84. According to Rotomould, the parties had mutually terminated their agreement “without any conclusion as to whether either of them was in breach”. It is argued that the Arbitrator was to deal only with the monetary value of work that DCDCL had carried out. Hence, as submitted, the Arbitrator exceeded his jurisdiction when he assessed and made an award for loss of profit in favour of DCDCL. DCDCL refutes Rotomould’s submission. It argues that it was within the terms of reference to the Arbitrator to consider which party had breached the agreement and flowing from that, to assess and award consequential damages. Deo, a director of DCDCL, asserts in his affidavit that DCDCL had always made it unequivocally clear that it was pursuing its claim on loss of profit.
    
85. Clause 33 of the FSFBC (which is incorporated into the parties’ agreement) and which sets the general jurisdiction of the Arbitrator, does not appear to forbid the Arbitrator from dealing with the issue of liability. It provides in its relevant part:
    

...in case any dispute or difference shall arise between [the parties]...as to the construction of this contract or as to any matter or thing of whatsoever nature arising thereunder or in connection therewith.....then such dispute of difference shall be and is hereby referred to the arbitration and final decision of a person ....

86. The words “arising thereunder or in connection therewith” the contract would appear to be all inclusive and wide enough (when put together) to include the jurisdiction to consider breach and assess damages. In Heyman v Darwins Ltd[47], Lord Porter said that the words “arising out of contract” have a wider meaning than the words “under a contract”.
    
87. The parties’ Agreement To Defer Future Differences to Arbitrator[48]which I take as the document which sets out the particular “terms of reference” for the Arbitrator in this case, appears to define the issue between the parties as one “concerning the breach of a building contract”:
    

Whereas by an agreement in writing dated the 6th day of December 2010.............it is provided that differences arising between the parties thereto shall be referred to an arbitrator....[a]nd whereas differences....have arisen and are still subsisting between the parties concerning the breach of a building contract....[n]ow we, the said parties [DCDCL] and [Rotomould] do hereby refer the said matters in difference to the award of MR FRASER CLARK.

SGD. DCDCL & Rotomould

88. It appears from the above that what DCDCL and Rotomould actually referred to the Arbitrator were “the said matters”. The parties’ actual written submissions to the Arbitrator contained a direct (or indirect) allegation of a breach on the part of the other. DCDCL’s submissions dated 24 September 2012 include a claim for loss of profit. Rotomould’s submissions dated 14 September 2012 contains the following at paragraphs 26 and 27:
    

The Company has never denied payment owed to the Contractor for works that the Contractor carried out on the site and as such engaged a quantity surveyor to estimate such value of same which is in accordance with the FSFBC.

It is therefore submitted that the Contractor should be paid the value estimated by the quantity surveyor as this is in accordance with the FSFBC. Furthermore, the Contractor should be ordered to pay damages to the Company for the incompletion of works and breach of the services agreement. (my emphasis)

89. After considering all of the above, I find that it was within the jurisdiction, and terms of reference of the Arbitrator, to consider and determine breach as well as consequential damages.
    

Did the Parties Mutually Terminate their Contract?

90. As stated above, Rotomould argues that, because the parties had mutually terminated the agreement, the Arbitrator should not have considered breach of contract and consequential damages. As a general point of legal reasoning, that argument is correct. However, as a matter of fact, there was nothing before the Arbitrator to indicate that the parties did indeed mutually terminate their agreement. I say this on the basis of the following key points. First, the parties did both make submissions to the Arbitrator on breach of contract and damages. Second, having both made submissions to the Arbitrator on breach of contract and damages, it follows that any purported mutual termination of their contract must therefore be invalid. Thirdly, the alleged mutual termination of the contract does not appear to be documented. In general, a mutual termination of agreement involves the parties mutually discharging one another from their respective obligations under the contract. The mutual discharge of their obligations is important for two reasons. Firstly, it serves as mutual consideration for the (latter) agreement to terminate the original agreement. Because a mutual termination of agreement isa whole new agreement in itself,it must be supported by mutual consideration in order to be effective. It is sufficient consideration for this purpose if the parties both agree to discharge all their obligations t0 one another. And, by agreeing to discharge one another’s obligations, the parties are thereby, mutually, relinquishing their right to sue for breach of contract. As it happened here, both parties had made allegations and cross-allegations of breach to the Arbitrator. Both were seeking to be compensatedfor the alleged breach of the other. The only conclusion one can draw from this is, either:
    
    • (i) the earlier purported mutual termination of agreement had failed for lack of consideration, or
      
    • (ii) that the so-called mutual termination is, but a fabrication on the part of Rotomould.
      
91. I reiterate at this point that the purported mutual termination of agreement does not appear to have been formally documented. In any event, there is nothing on the face of the award to suggest that the Arbitrator might have considered this point, and erred in his application of the law or in his mobilisation of the facts.
    

Attempt to Vary the Contract

92. Rotomould argues that the move to terminate the agreement was initiated by DCDCL. From DCDCL’s emails to Rotomould dated 04 and 05 May 2011 (Appendix 1), it appears that DCDCL was indeed seeking a variation in light of the delays and the rising costs, as a condition to continuing with the works. When Rotomould would not concede, and DCDCL kept insisting, Rotomould finally responded with a letter/email dated 23 May 2011 by which it terminated the contract. Whether DCDCL’s conduct was an attempt to completely rescind and abandon the original agreement, or, merely to vary it, is a question of law. In all likelihood, it was outside the expertise of the Arbitrator.
    
93. It must be remembered that, even before DCDCL requested for a variation, Rotomould had in fact varied some aspect of the engineering details as shown in the trail of emails in Appendix 1. It must also be remembered that the construction time was delayed considerably by the lack of approvals at the material time.
    
94. In his reasoning (Appendix 3), the Arbitrator appears to consider that such variations may give rise to additions or deductions from the contract sum, and will certainly require an adjustment of the completion date. It is certainly within his expertise to have made that consideration. I find nothing on the face of the award to suggest that the Arbitrator might have erred in fact or in law in this regard.
    

Was the Amount Awarded Reasonable?

95. Rotomould's Architect deposes in his affidavit that during pre-Arbitration negotiations, DCDCL had sought $131,000-00being its alleged 20% loss of profit. Rotomould alleges that the figure is unreasonable. The Architect adds that the amount of work carried out by DCDCL is quantifiable at $20,000 in terms of the Progress Payment Certificate and assessed at $11,730 by Rawlison Jenkins Limited (Quantity Surveyor). The argument is that if DCDCL did not agree with that assessment, it should have engaged its own Quantity Surveyor. All this, it is alleged, the Arbitrator failed to take into account.
    

Other Allegations

96. Rotomould also produces a letter from the landowner in which the landowner (Moko) denies that DCDCL had ever seen him about some other matters. It is not clear if the Arbitrator did take this into account at all. I am the view that this would have had little bearing on the Arbitrator's finding – given the delay in the approvals. Again, I do not think that the Arbitrator erred in law or in fact in this regard.
    

DID THE ARBITRATOR IMPROPERLY PROCURE AWARD?

97. There is nothing before me to suggest that Mr. Clark did improperly procure the award.
    

TIME FOR MAKING AWARD

98. Rotomould also highlights that Clause 3 of the First Schedule stipulates that the arbitrators:
    

"shall make their award in writing within three months after entering on the reference, or after having been called on to act by notice in writing from any party to the submission, or on or before any later day to which the arbitrators, by any writing signed by them, may, from time to time, extend the time for making the award".

99. One of the allegations of Rotomould in this case is that Mr. Clark had delayed unnecessarily in handing down his award. Mr. Clark's award was handed down in March 2013 (i.e. almost a year after his appointment on 05 March 2012). The question to ask at this time is, whether or not Mr. Clark's delay amounts to a misconduct and if so, whether such misconduct is serious enough to justify the setting aside of the award? Given that clause 3 stipulates a particular time frame for making an award, it is arguable that a failure on the part of the Arbitrator to comply with the stipulation must amount to some "legal misconduct". I do note that section 10 of the Arbitration Act gives power to the Court to extend the time to make an award.
    

Power to extend time for making award

10. The time for making an award may from time to time be extended by order of the court, whether the time for making the award has expired or not.

100. In commenting on the equivalent provision in the English Arbitration Act 1950[49], Russell on Arbitration(supra) observes at page 350 that:
     

The power to enlarge time can be exercised although the award has in fact already been made after the period fixed for making it has expired. The effect of an order of enlargement is that the extended time is to be treated as if it had been originally given in the arbitration agreement. Consequently, the award and all else done in the arbitration during such extended time is rendered valid and effective.

(see Oakland Metal Co. Ltd v Benaim (d) & Co. Ltd [1953] 2 Q.B. 261; Danley (Earl of) v London, Chatham & Dover Ry [1867] UKLawRpHL 4; (1867) L.R. 2 H.L. 43; cf. Knowles & Sons Ltd v Bolton Corpn [1900] UKLawRpKQB 59; [1900] 2 Q.B 253)

101. Russellopines though that the ideal remedy for undue delay is the removal of the Arbitrator[50]. In this case, either party could have applied to the High Court pursuant to section 12(1) of the Act[51]to remove the Arbitrator on account of the delay.But neither did. The trail of emails in Appendix 2 will show that well after the scheduled time for the award, both counsel were still engaging with the Arbitrator to seek a date for formal submissions.I am of the view that the appropriate thing to do in this case, in the interests of finality, is to extend the time for making the award – even though the award has already been made. In so extending the time, I have taken into consideration all the foregoing discussions and especially, that no serious miscarriage of justice would appear to befall Rotomould if I did so.
     

CONCLUSION

102. Although the Arbitrator did not take heed of counsels' request for oral submissions, I am of the view that no other award could properly have been made than that which was in fact made by Mr. Fraser Clark. However, as I have directed above in paragraphs 80 to 82, the award is to be remitted to the Arbitrator only on that part as stated above. The award sum as deposited in Court is to be released to DCDCL upon a formal application following the release of the items. Parties to bear their own costs.
     

Anare Tuilevuka
JUDGE

17November 2015
Appendix 1

Appendix 2

Appendix 3

(The Award)

1. That a contract to construct a factory for the Company on Lot 1, N.D. 2853, Queens Road, Lautoka was entered into by both the Company and the Contractor as per the drawings and specifications prepared by Design Hut (The Architect) by virtue of a letter of acceptance issued by the Architect on 6 December 2010.
   
2. The Architects letter dated 6 December 2010 stated that:-
   
   • The site would be available from 8 December 2010.
   • That commencement date would be 3 January 2011
   • That completion date was to be 4 July 2011 – 26 weeks construction period.
     

3. At the time of the issuing of the letter of acceptance, 6.12.10, there was no approved building permit issued by Lautoka Rural Local Authority (LRLA) – the appropriate authorising agent.

4. It would be illegal to commence construction on site in the absence of a Building Permit from LRLA, rendering the time conditions stipulated in the Contract unenforceable.

5. Extensions of Time were entitled to be issued under the terms of the Contract up to the date of the issuing of the LRLA Building Permit, which was 28 April 2011 with a new completion date of 27 October 2011 (which was week 16 of the original contract period), effectively making the Contract 42 weeks.

6. Notwithstanding the non-issuance of the Building Permit, the Contractor being aware of the Companies desire to occupy their new factory at the earliest opportunity attempted to mobilise on to the site in early January 2011 to cooperate and assist the Company i.e. in good faith.

7. Early January 2011 was a period of sustained heavy rain throughout Fiji and the Contractor notified the Architect of their inability to make progress on site.

8. The Contractor purchased materials (e.g. steel reinforcing) and began off site fabrication of these in an effort to make up for lost time due to rain.

9. The Contractor checked the progress of the Building Permit with LRLA who, knowing that there was no Building Permit issued, "advised" against any work being done on site, for obvious reasons.

10. The drawings prepared by the Architect note the steel reinforcing was to be 12dia, 10dia, 16dia bars typically.

11. In the Fiji Construction Industry reference to 12/10 reinforcing would in general denote grade 300 bars i.e. D12, D10. If a higher grade was required this would be denoted by HB12/HR10 etc.

12. The Contractor purchased D12 bars and made up cages etc. using these.

13. No specific Structural Engineers drawings were included in the Contract Set/Contract Agreement.

14. From other correspondence we understand that Shri Singh & Associates were to be the Structural Engineers.

15. No "Standard Cover Sheet" for Structural works was included in the Contract Agreement. This sheet would typically define what grades of steel were to be used on a project i.e. normal grade, high tensile steel etc.

16. It is evident that some form of photographic review of actual ground condition during the period Dec-January (but these have not been provided by either party) was supplied to the Structural Engineer (the Engineer) who subsequently advised a change to the footing details which was sent on 3/2/11. This increased the number of bars but no change was made to the designation i.e. D12 bars were still referred to

(The photos this decision to change the details from has not been provided to the Arbitrator despite requests).

17. After the Architects "Termination of Contract" letter was submitted 23 May 2011, the Contractor submitted a claim for the labour and materials involved in the preparation of steel reinforcing cages. This was rejected by the Architect on the report of the "new contractor" who advised that the cages were not the "correct" grade steel. I find noreference to a change of grade to the reinforcing steel was given to the Contractor and that in accordance with the wishes urging the Company he had mobilised and purchased in good faith the reinforcing steel.

18. Frustration at the lack of progress on site by Rotomould is evident in the exchanges of communication and at some stage the Contractor and the Company met privately to discuss this and acknowledged that their mutual concerns could not be solved by progressing with the Contract and that the Contract should be terminated with fair payment for works carried out to date.

19. At this point disagreement have arisen as to what would be 'fair remuneration for works done to date'.

20. The Company has declined to pay for steel reinforcing on the grounds that it did not conform to the contract but (see Arbitrators comments 17 above), the documents did not call up HB Steel but refer merely to diameter size which implies D type (Clause 11).

21. The Company was of the view that Contractor has not proceeded diligently and consistently on site.

22. The Contractor was of the view that he was initially prevented from proceeding because of wet weather. The Contractor then became aware that there were problems with the subdivision, part of the reason the LRLA Permit was not issued until this was resolved and that there was no Building Permit meaning that any work on site was illegal and would be subject to a "stop work notice". Being a responsible builder he was reluctant to proceed on site in such circumstances. The contractor believed that Extensions of Time should have been granted accordingly.

23. The Contractor also noted the introduction of an increased Value Added Tax from 12.5% to 15% and was of the view that this constituted a valid increase in the contract sum.

^[1] Walton, Anthony Q.C, Russell On the Law of Arbitration (19^th ed) Stevens & Sons, London, (1979). Print.
^[2]Fiji’s High Court Rules 1988, after all, were “borrowed” from the English Supreme Court Rules.
^[3][1960] NZLR 788).
^[4] [1977] 2 Lloyd’s Rep. 134.
^[5] Section 3 provides:

Submission to be irrevocable and have effect as an order of the court

3. A submission, unless a contrary intention is expressed therein, shall be irrevocable, except by leave of the court or by mutual consent and shall have the same effect in all respects as if it had been an order of the court.

^[6]Unless the parties expressly stipulate otherwise in their Agreement?
^[7]8. The award to be made by the arbitrators or umpire shall be final and binding on the parties and the persons claiming under them respectively.

^[8] As Anthony Walton QC (1979),Russell on The Law of Arbitration(19^th ed.)London: Stevens & Sons Limited, says at page 219:

It must always be remembered that an arbitrator derives his authority from the agreement between the parties, and that consequently his powers and duties are those and only those that the parties have agreed to place upon him.

^[9]See Fidelity Management SA & Ors v Myriad International Holdings BV & Ors discussed further below in the Ruling.
^[10] [2013] SGHC 186 - as per Chenn Sang Onn J.

1 & < However good or bad ineyes eyes of a party, the decision of an arbitral tribunal with the reqe jurisdiction is final and binding. This general proposition of law is a manifestatistation of the fundamental principle of interest reipublicae ut sit finis litium or finality in proceedings. Arbitration will not survive, much less flourish, if this core precept is not followed through by the courts.

He also said:

.....The integrity and efficacy of arbitration as a parallel dispute resolution system will be subverted if the courts appear unable or unwilling to restrain themselves from entering into the merits of every arbitral decision that comes before it. As is well-established under Singapore arbitration jurisprudence, the power to intervene in arbitrations generally, and more specifically to set aside awards, must and should only be exercised charily, in accordance with the rules under the applicable arbitral framework.

2 & < Although parties have ht anht and expectation to a fair arbitral process and the courts should give maximum effect to these sards servises, >partust n encouragouraged to dress up and massage their unha unhappineppiness wiss with thth the sube substantive outcome into an established ground for challenging an award. Particularly ......it is imperative that an application to set aside an award ..... is not a guise for a rehearing of the merits. Unfortunately, as this case exemplifies, sieving out the genuine challenges from those which are effectively appeals on the merits is not easy under the present law

(my emphasis)
And:

Arbitrations are meant to be an efficient alternative to court litigation. ...... Especially for challenges against an award founded on the breach of natural justice, the court’s role is, in very general terms, to ensure that missteps, if any, are more than arid, hollow, technical and procedural (Soh Beng Tee at [98]). Any real and substantial cause for concern should be demonstrably clear on the face of the record without the need to pore over thousands of pages of facts and submissions. Otherwise, curial recourse against an award will be used (and abused) as an opportunity to invite the court to judge the full merits and conduct of the arbitration. As a further aside, an over-jealous scrutiny of the arbitral tribunal’s decision will also encourage parties to, via the statutorily permitted mechanism of curial recourse, tactically frustrate and delay the enforcement of the arbitral award. ....... If my decision is appealed, parties may well have to wait for several more months to finally resolve this dispute. This runs contrary to one of the original aims of arbitration as an expedient alternative dispute resolution mechanism.

^[11][2007] 3 SLR(R) 86 65(c)–(f)).
^[12] The court said:

... [F]airness justifies a policy of minimal curial intervention, which has become common as a matter of international practice. To elaborate, minimal curial intervention is underpinned by two principal considerations. First, there is a need to recognise the autonomy of the arbitral process by encouraging finality, so that its advantage as an efficient alternative dispute resolution process is not undermined.

^[13]The court said:

..... having opted for arbitration, parties must be taken to have acknowledged and accepted the attendant risks of having only a very limited right of recourse to the courts.

^[14]The court said:

It would be neither appropriate nor consonant for a dissatisfied party to seek the assistance of the court to intervene on the basis that the court is discharging an appellate function, save in the very limited circumstances that have been statutorily condoned. Generally speaking, a court will not intervene merely because it might have resolved the various controversies in play differently.

... It must always be borne in mind that it is not the function of the court to assiduously comb an arbitral award microscopically in attempting to determine if there was any blame or fault in the arbitral process; rather, an award should be read generously such that only meaningful breaches of the rules of natural justice that have actually caused prejudice are ultimately remedied.

^[15] Report No. 20 – Arbitration – October 1991.(http://www.lawcom.govt.nz/sites/default/files/projectAvailableFormats/NZLC%20R20.pdf)
^[16] For an excellent background reading to trace the legislative reforms in these jurisdictions and the underlying philosophy (ies) – see New Zealand Law Commission Preliminary Paper No. 7 ARBIT RATION - A discussion paper. Wellington, 1988 ISSN 01 13-2245: NZLC PP7.

^[17] pursuant to Order 7 Rule 2 of the High Court Rules 1988, sections 12 and 13 of the Arbitration Act (Cap 38), and to the inherent jurisdiction of this Court.
^[18] a director of Rotomould.
^[19] of the Architects.
^[20][1914] UKLawRpKQB 53; [1914] 2 KB 478, at page 484.
^[21]according to Russel on Arbitration (supra).
^[22]at pages 497-498.
^[23][1958]1 A11 ER 494.
^[24]He said:

The first task of the Court is to constru arbe arbitration agreement that is, to ascertain to what procedure the parties have agreed. At this stage160;its task the Court is not directly concerned with whether the agreement ‘violatedlated any rules of what is so often c natural ural justice’.... Where the award has been made by the arbitrator in breach of&#1e agreed prod procedure, thlicant is entitled to have it set aside, not because there has been necessarily any breach each of thes of natural jus buus but simpla because the parties have not agreed to be boundbound by an award made by the procedure in fact adopted....

[25]Lord Diplock sock said thus:

......When the arhe arbitration agreement has been construed and no breach of the agreocedure found, ther there may be nevertheless arise a second and quite separate question; that is, whether, as a matter of pupolicy, a particular awar award, made pursuant to thatagreed procedure, ought not to be enforced and ought, therefore, to be set aside; for an arbitrator &#s award, unless set asideaside, entitles the beneficiary to call on the executive power of the sto enforce it, and it d it is the function of the Court to see that execuexecutive pow not abused.

^[26] As Lord Diplock said:

It is in relation to second and separate question that the rules of what ihat is so called natd natural justice may arise directly. There may be a variety of grounds of p policy on which an award ward may be set aside. That it has sought to oust the statutory jiction of the Court tort to direct a special case to be stated is one example.... That its effect is to enforce an illegal contract is perhaps another....and I apprehend that an award obtained in violation of the rules of naturalicusthere there was was no breach of the agreed procedure would be set aside on the grounds of publiicy; as for instance, nce, where an arbitrator&#1nifesbvious bias too late for an application for his rhis removaemoval to be effective before he made his award...

^[27] As Lord Diplock said:

Arbitration Agreements seldom contain ... a complete code of procedure, and where there is no express written term relating to the point of procedure impugned the court has to ascertain the term to be implied, which it does from the language the parties have used in their written agreement, the provisions of the Arbitration Act 1950, the surrounding circumstances, and – particularly in the kind of arbitration which comes before this court – any custom or trade practice which must be taken to be incorporated into their agreement. A custom or trade practice is not, however, to be incorporated in an agreement if it is unreasonable – not because the parties to a contract cannot expressly agree to something unreasonable, but because the court will not draw the inference that they have done so by silence. It is in this connexion that something like “the rules of natural justice are blown in by a side wind.

In considering whether a particular customary procedure in the determination of a dispute is unreasonable, a relevant test must be whether it tends or may tend to an unjust result.

^[28](as the Fiji Court of Appeal said in Ports Authority of Fiji v C&T Marketing Ltd) [2000] FJCA 18; ABU0010E.20S (5 May 2000):

......the Arbitration Act (Cap. 38) currently in force in Fiji contains no such provision. Section 12 provides simply that the High Court may set aside an award. O.73 r.1 (1) (b) of the High Court Rules requires that an application to the Court to do that be made by origination (sic)motion, as occurred in the present case. The High Court dealing with such an application made by originating motion is doing so as a court of first instance and not exercising an appellate jurisdiction.

^[29][2005] EWHC 1193(Comm) Case No:2005 Folio No. 154.
Morrison LJ said:

I [start with] an assumption that the arbitrators understood their function and knew how to perform it. In this case .....since the panel comprised most eminent lawyers: Lord Browne- Wilkinson, Professor Dr Albert Van den Berg [a leading Dutch lawyer and experienced international arbitrator] and chaired by Kenneth Rokison QC [the assumption is readily made]. And, further, that it would be wrong for this court to undertake a narrow textual analysis of the Award so as to conclude that there has been a serious irregularity of the sort required under section 68 of the Act.

(paraphrasing mine)

^[30]as Bingham J would caution in Zermalt Holdings SA[1985] 2 EGLR 14.
^[31] Section 14 of the Act provides:

Power to compel attendance of witnesses

14.-(1) The court may order that a writ of subpoena ad testificandum or of subpoena duces tecumshall issue to compel the attendance before any arbitrator or umpire of a witness wherever he may be within Fiji.

(2) The court may also order that any prisoner be produced for examination before any arbitrator or umpire.

^[32]The New Zealand Law Commission observed in 1988 that the minimal standards of natural justice also place upon the arbitrator a duty to act fairly and to attend to the parties’ arguments and evidence and to keep the parties informed.

^[33]Mustill & Boyd, The Law & Practice of Commercial Arbitration in EnglandButterworths, London, (1982). Print.

^[34] as quoted in the New Zealand Law Commission’s Preliminary Paper No. 7 ARBITRATION A Discussion PaperNZLC PP7. (Preliminary Paper/Law Commission Wellington, 1988 ISSN 01 13-2245)

....unless otherwise authorised by the parties, the tribunal is constrained to follow an adversarial procedure modelled on that of the court – for example holding hearings, applying strict evidential rules, and limiting its decision to the parties' arguments and evidence. This raises the questions, first, whether the tribunal's discretion should be so limited, and, secondly, whether its procedure should be modelled on the court's when, after all, it is supposed to provide a more flexible method of dispute resolution
^[35]He says:

Arbitrations need not follow the procedure laid down for actions in a court of law, provided that the more simple procedure so often followed by the practice of a particular trade in relation to its arbitrations does not lead to any unfairness between the parties in any particular dispute.
^[36] [1904] UKLawRpAC 28; [1905] A.C. 78 at page 80.
^[37]He says:

We must not insist upon a too minute observance of the regularity of forms among persons who naturally by their education or by their opportunities cannot be supposed to be very familiar with legal procedure, and may accordingly make slips in what is mere matter of form without any interference with the substance of their decisions. I should be anxious myself, as I have no doubt all your Lordships would, to give every effect to their decisions; on the other hand, there are some principles of justice which it is impossible to disregard, and giving every credit to the desire on the part of this arbitration court to do justice, I think it is manifest that they proceeded far too hastily in this case, and apart from imputing to them any prejudice or any desire to do wrong.
^[38]_{[1965]1QB456.}
^[39](my paraphrasing)

^[40] Lord Diplock said:

Thesetechnicalrulesofevidence...form nopartoftherulesofnatural justice. Therequirementthatapersonexercisingquasi-judicialfunctions mustbasehisdecisiononevidencemeansnomorethanitmustbebased uponmaterialwhichtendslogicallytoshowtheexistenceornon-existence offactsrelevanttotheissuetobedetermined,orto showthelikelihoodor unlikelihood of the occurrence of some future event the occurrence of which wouldberelevant. Itmeansthathemustnotspinacoinorconsultan astrologer,buthemaytakeintoaccountanymaterial which,asamatterof reason,hassomeprobativevalueinthesensementionedabove. Ifitis capableofhaving any probativevalue,theweightto beattachedtoitisa matterfortheperson towhom Parliamenthasentrustedtheresponsibilityof decidingtheissue.

^[41]He said:

...the rulesofnatural justice...can...be reducedtotwo. First,hemustbasehisdecisiononevidence,whethera hearingisrequestedornot.Secondly,ifahearingisrequested,hemust fairly listen to the contentions of all persons who are entitled to be representedatthehearing.

^[42][1999]2NZLR452.
^[43] [1961] 1 Lloyd’s Rep. 220 at p. 224.
^[44] (1919) 89 L.J.K.B. 161; see also Russell on Arbitration at page 437.
^[45] [1970] 1 Lloyd’s Rep. 235 at page 238, col 2, see also Russell at page 437.
^[46] (1817) 5 Dow 247, cited in Russell (19^th ed) at page 287.
^[47] [1942] A.C. 356.
^[48]Appointment of Single Arbitrator under Agreement to defer Future Differences to Arbitrator dated 5 March 2012.
^[49] i.e. section 13(2) of the Arbitration Act 1950 (England).

“The time, if any, limited for making an award, whether under this Act or otherwise, may from time to time be enlarged by order of the High Court or a judge thereof, whether that time had expired or not”.
^[50]Section 13(3) of the Arbitration Act 1950 in England provides that:

The High Court may, on the application of any party to a reference, remove an arbitrator ..who fails to use all reasonable dispatch in entering on and proceeding with the reference and making an award.........
^[51] Section 12(1) provides:

12.-(1) Where an arbitrator or umpire has misconducted himself, the court may remove him.