In <span class="news-text_italic-underline">Wan Sern Metal Industries Pte Ltd v Hua Tian [2025] SGCA 5</span>, the Singapore Court of Appeal partially set aside an arbitral award, ruling that the tribunal had breached natural justice by failing to recognise that claim which was not pleaded had been raised in written submissions during a documents-only arbitration.
The dispute involved a construction contract between Wan Sern Metal Industries Pte Ltd (the “<span class="news-text_medium">Appellant</span>”) and Hua Tian Engineering Pte Ltd (the “<span class="news-text_medium">Respondent</span>”). The parties agreed to an expedited arbitration process under the SIAC Arbitration Rules 2016, with no oral hearings. Within three months, both parties submitted pleadings, witness statements, reply witness statements, written submissions and reply submissions. An award was issued two months later.
The issue arose from the Respondent’s counterclaim for the value of uncompleted works, known as the ‘Expectation Damages Issue’, which was not initially pleaded but was introduced in written submissions. The court found that the tribunal failed to recognise this procedural irregularity and mistakenly simplified the Appellant's case as a result. The failure to appreciate that this claim had not been pleaded led to a breach of natural justice, which caused prejudice to the Appellant.
The court emphasised the critical role of pleadings in expedited, documents-only arbitrations. In such proceedings, pleadings serve as a foundation for determining the issues to be arbitrated, ensuring the tribunal is fully aware of each party's case. The court noted that in a documents-only arbitration, where the interaction between the parties and the tribunal is limited to written submissions, the clarity provided by pleadings is even more important in ensuring fairness and addressing potential surprises from claims not pleaded.
This decision serves as a reminder that, in documents-only arbitrations, tribunals should ensure clarity with the parties about whether issues not covered in the pleadings can still be decided. The court's judgment underscores the importance of relying on pleadings to define the scope of the arbitration, especially when the arbitration process is expedited and lacks oral hearings.
