In DOM v DON [2025] SGHC 103, the Singapore High Court partially annulled an arbitration award in a construction dispute, ruling that the tribunal's decision to award a percentage of consultancy fees lacked a sufficient connection to the arguments presented by the parties.
The dispute stemmed from a construction contract where DOM, the claimant, was the main contractor for work on DON's factory building. After completion, several disputes arose concerning variation orders (“VOs") claimed by DOM and counterclaims from DON regarding rectification costs for defects.
The contract included an arbitration clause and arbitration took place in Singapore. The tribunal directed both parties to prepare detailed Scott Schedules and ultimately awarded sums to both DOM (for the VOs) and DON (for defects and consultants' fees).
DOM applied to the High Court to set aside nine portions of the award, citing breaches of natural justice, fraud and public policy.
The High Court rejected most of DOM’s claims but partially set aside one portion of the award, which required DOM to pay a percentage of DON’s project manager fees. The tribunal had previously stated that a project manager was not necessary but still awarded the fees without adequate explanation, reducing them by half due to insufficient evidence.
The court found that the tribunal’s reasoning lacked a sufficient connection to the parties' arguments on the justification of the consultants' fees. It concluded that the decision violated natural justice and that part of the award was annulled.
This case provides a rare example where a court found that a tribunal’s reasoning lacked a sufficient connection to the parties’ arguments. The inconsistency in the tribunal’s conclusions was noted, particularly in fact-intensive cases involving multiple distinct issues. Tribunals should ensure that each conclusion is firmly grounded in the issues and evidence presented by the parties.
The case also highlights the growing complexity of setting aside awards and the challenges faced by judges, who may need to conduct an in-depth review of the arbitration material. Construction disputes, especially those involving delays, defects and Scott Schedules, are particularly susceptible to such issues, as tribunals often adopt approaches not fully put forward by either party.
Case: DOM v DON [2025] SGHC 103 (28 May 2025) (Wong Li Kok, Alex JC)