1.    This appeal raises a general question of law as to the power or jurisdiction of an arbitrator under the International Arbitration Act (Cap 143A) (IAA) and the UNCITRAL Model Law on International Commercial Arbitration (the Model Law) to revisit or reverse an award he has made. UNCITRAL is the acronym for United Nations Commission on International Trade Law. The Model Law is set out in the First Schedule to the IAA. At the hearing below, the judge set aside the further award rendered by the arbitrator on the ground that, when he made that further award, he was functus officio.

2.    We shall first briefly set out the background facts giving rise to the application to set aside the further award. In 1994, the appellant, Mr Jeffrey Tang (Tang) and the respondent, Mr Stanley Tan (Tan), together with their respective group of investors, formed a joint venture corporation called Dynasty Pacific Group (DPG). Dispute arose between them which led to litigation in Australia. Pursuant to mediation, a Settlement Agreement dated 24 January 1998, was reached. In the Settlement Agreement there was an arbitration clause for the settlement of disputes arising thereunder. The DPG had basically two main lines of business property development and hotels. Under the Settlement Agreement, the businesses were duly divided between Tang and Tan and their respective associates. It also set out the details on how the division should be carried out.

3.    However, disputes arose between the parties as to the obligations each party should fulfil under the Settlement Agreement. The disputes were referred to Mr Giam Chin Toon SC as arbitrator (the Arbitrator). There were two sets of disputes giving rise to two separate arbitration proceedings. We are here concerned with only the second arbitration. Before the Arbitrator, Tang was the respondent and Tan, the claimant. There were claims and counterclaims between the parties. One of the counterclaims brought by Tang was for a sum of A$1,375,762.64 (hereinafter referred to as the "A$1.3 million counterclaim"). On 10 January 2000 the Arbitrator made a reasoned award, with the following concluding results:-

"1. The claimants (Tans) claim be dismissed

2. The respondents (Tangs) counterclaim be dismissed.

3. This award is final save as to costs."

4.    Two days later, on 12 January 2000, the solicitors for Tang wrote to the Arbitrator, pointing out that, although he had dismissed Tangs counterclaim, it would appear that an aspect of the counterclaim of Tang relating to cash deposits were left out by the Arbitrator and that the award in dismissing Tangs counterclaim did not refer to these cash deposits. Tangs solicitors accordingly asked the Arbitrator to make an additional award, pursuant to Article 33 of the Model Law.

5.    On 17 January 2000, the Arbitrator issued an additional award wherein he acknowledged that he had omitted to address Tangs counterclaim relating to the seven cash deposits and duly made the award in respect thereof. However, as regards Tangs A$1.3 million counterclaim, the Arbitrator re-affirmed the 10 January 2000 award and refused to make any award in respect of that counterclaim because he did not think that Tang was entitled to it. The Arbitrator gave his reasons.

6.    Following the delivery of this additional award, on 21 January 2000, Tangs solicitors wrote again to the Arbitrator raising two points. First, they sought further arguments before the Arbitrator relating to the A$1.3 million counterclaim on the ground that the Arbitrator appeared to have decided the matter on the basis of a point which was not argued before him. Second, they sought clarification as to whether Tang would be entitled to interest on the cash deposits which were to be refunded to him under the additional award of 17 January 2000.

7.    The Arbitrator acceded to the request of Tang for further arguments and heard the parties on 31 January 2000. On 6 March 2000, the Arbitrator rendered "Additional Award II" wherein he dealt with not only the counterclaim for A$1.3 but also the question of interest on the cash deposits and the question of costs, which question was reserved under the award of 10 January 2000. On the A$1.3 million counterclaim, the Arbitrator stated that his previous interpretation of the relevant provision of the Settlement Agreement as set out in his Additional Award of 17 January 2000 was erroneous. He thus changed his mind and gave an award in respect of the A$1.3 million counterclaim with interest. This award will hereinafter be referred to as the "March award".

8.    Accordingly, Tan applied by way of a motion to have the March 2000 award set aside.

9.    In the March award, the Arbitrator expressly addressed the question whether he had the jurisdiction or power to recall an award and alter it. We will now quote the relevant paragraphs of the award where he gave his reasons why he could do that:-

It is not in dispute that in the case of judgments pronounced by the courts, the Judge has the power to re-consider his verdict so long as the judgment has not been entered or perfected. There is no such procedure in an arbitration award. So, a judge can, like in the case of Lim Yam Teck v Lim Swee Cheng (1979) 1 MLJ 162 change his mind after giving further consideration to the matter. There is, therefore, a period in which a judge is permitted to re-consider the matter. Thereafter, if a decision is wrong, it would have to be rectified by a Court of Appeal.

Unfortunately, the position is less clear in an international arbitration award where the arbitrator desires to re-consider the matter. There are no direct authorities on the point. If an error is made, there are no express provisions whereby the decision could be rectified in a court of law. Great injustice would be caused in such a case. It is inconceivable that the law or public policy would permit such a situation.

In addition, it has been submitted by Counsel for the Respondent that since there is no procedure of registration or perfection of the Award, the equivalent period for an arbitrator could be when enforcement proceedings are applied for. I agree with this.

I am therefore of the view that an arbitrator can re-consider the award not only on the terms of Article 33(1) of the Model Law but under the general powers given to him to determine the rules and procedure of the tribunal which would include the power to re-consider an award before enforcement if the arbitrator so decide. If I have good reasons to re-consider the matter, I should be allowed to do it. Otherwise, an injustice would be perpetuated.

10.    It will be seen that essentially the basis upon which the Arbitrator felt he had the jurisdiction or power to reconsider an award already delivered is the overriding consideration of justice so long as the award had not yet been enforced.

11.    The judge below was of the view that the March award was a nullity because the Arbitrator was functus officio when he made that award. Having rendered an award, the powers which an arbitrator still possesses would only be those which were reserved under Article 33 of the Model Law. That article does not empower an arbitrator to recall an award with a view to reversing it.

12.    As regards Tangs alternative argument, that the court should exercise the discretion conferred upon it under article 34(4) of the Model Law and afford the Arbitrator an opportunity to resume the hearing so that the ground to set aside the award could be eliminated, the judge said:-

Article 34(4) can be invoked only when there are irregularities in the award and not when the award is a nullity. Furthermore, the power to remit does not apply to an award made after the Arbitrator became functus officio.

 

13.    Counsel for Tang, Mr Alvin Yeo, put the issues which we are required to consider in this appeal under the following four heads:-

a. Whether the judge erred when he decided that the Arbitrator was functus officio when he made the Arbitration 2 Award;

b. If so, whether the Arbitrator had the jurisdiction to reconsider the Arbitration 2 Award as regards the claim for A$1,375,762.64 and to make the March Award;

c. whether the Respondent had successfully made out a case for setting aside under Article 34 of the Model Law;

d. In the alternative, whether the judge erred when he refused to remit the March Award to the Arbitrator pursuant to Article 34(4) of the Model Law.

14.    As we see it, there is really only one main issue: was the Arbitrator functus officio vis--vis the A$1.3 million counterclaim when he made the March award. If he was, then the March award is a nullity and we do not think Article 34(4), which gives the court the discretion to remit a case back to the Arbitrator either to give the Arbitrator an opportunity to resume the arbitral proceedings or to take such other actions as will eliminate the grounds for setting aside, can be applied to a case such as this. Here, remitting the case back to the Arbitrator will not eliminate the problem.

15.    It is common ground that the proceeding before the Arbitrator was an international arbitration, governed by the IAA. By s 3 of the IAA, the Model Law (except Chapter VIII) is to have the force of law. The relevant provisions are Articles 32-34 of the Model Law which provide:-

(1) The arbitral proceedings are terminated by the final award or by an order of the arbitral tribunal in accordance with paragraph (2) of this Article.

(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings when:

(a) --- Not relevant

(b) --- Not relevant

(c) --- Not relevant

(3) The mandate of the arbitral tribunal terminates with the termination of the arbitral proceedings, subject to the provisions of Articles 33 and 34(4). (Emphasis added).

(1) Within thirty days of receipt of the award, unless another period of time has been agreed upon by the parties:

(a) a party, with notice to the other party, may request the arbitral tribunal to correct in the award any errors in computation, any clerical or typographical errors or any errors of similar nature;

(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.

If the arbitral tribunal considers the request to be justified, it shall make the correction or give the interpretation within thirty days of receipt of the request. The interpretation shall form part of the award.

(2) The arbitral tribunal may correct any error of the type referred to in paragraph (1) (a) of this Article on its own initiative within thirty days of the date of the award.

(3) Unless otherwise agreed by the parties, a party, with notice to the other party, may request, within thirty days of receipt of the award, the arbitral tribunal to make an additional award as to claims presented in the arbitral proceedings but omitted from the award. If the arbitral tribunal considers the request to be justified, it shall make the additional award within sixty days.

(4) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, interpretation or an additional award under paragraph (1) or (3) of this Article.

(1) Recourse to a court against an arbitral award may be made only by an application for setting aside in accordance with paragraphs (2) and (3) of this Article.

(2) An arbitral award may be set aside by the court specified in Article 6 only if:

(a) the party making the application furnishes proof that:

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(iii) the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the award which contains decisions on matters not submitted to arbitration may be set aside; or

(iv) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Law from which the parties cannot derogate; or, failing such agreement, was not in accordance with this Law;

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(4) The court, when asked to set aside an award, may, where appropriate and so requested by a party, suspend the setting aside proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the arbitral tribunals opinion will eliminate the grounds for setting aside.

16.    Mr Yeo relied upon a number of works to say that in this instance there was, as yet, no final award. First, is A guide to the UNCITRAL Model Law on International Commercial Arbitration Legislative History and Commentary by Holtzmann and Neuhaus (hereinafter referred to as "The Guide"), where the authors referred briefly to the history behind Article 32(1) and said:-

Common to the various definitions is the commonsense notion that a final award is simply one that decides, or completes the decision of, all claims presented. At the same time, the Secretariat also suggested as an alternative a definition of the term final award; this draft provided that the making or delivery of the final award, which constitutes or completes the disposition of all claims submitted to arbitration, would terminate the mandate of the arbitral tribunal.

The Working Group favoured this last approach, although it was noted that it would be desirable to express in some provision of the Model Law that the arbitral tribunal had the power to render awards such as interim, interlocutory, or partial awards. This affirmative definition of the term final award without a mention of the other types of awards that might be issued was incorporated into the draft of what became Article 32, dealing generally with the termination of the arbitral proceedings. Later, however, for the sake of simplicity, the Working Group deleted the defining clause the words which constitutes or completes the disposition of all claims submitted to arbitration leaving just the term the final award that appears in Article 32(1).

We may add that Mr Holtzmann was the Secretary-General to UNCITRAL during the period when the latter was deliberating on the Model Law.

17.    Next is the Report of the Secretary-General of the United Nations (Document A/CN 9/260), which incorporated an Analaytical Commentry on Draft Text of a Model Law on International Commercial Arbitration. In the commentary, the following observation was made on Article 32 (at page 68):-

A good example is that the arbitrator would become functus officio by making an award only if that is the final award, i.e., the one which constitutes or completed the disposition of all claims submitted to arbitration.

18.    In Law and Practice of International Commercial Arbitration by Redfern and Hunter (3^rd Edition) the authors stated the following in relation to the expression final award (8-33):-

However, the term "final award" is customarily reserved for an award that completes the mission of the arbitral tribunal. Subject to certain exceptions, the delivery of a final award renders the arbitral tribunal functus officio. It ceases to have any further jurisdiction over the dispute, and the special relationship that exists between the arbitral tribunal and the parties during the currency of the arbitration ends. This has significant consequences. An arbitral tribunal should not issue a final award until it is satisfied that its mission has actually been completed. If there are outstanding matters to be determined, such as questions relating to costs (including the arbitral tribunals own costs) or interest, or further directions to be given relating to the disposal of property, the arbitral tribunal should issue an award that is expressly designated as a partial or interim award.

19.    Redfern and Hunter also say that when the arbitrator does not deal with the question of costs in the award, he effectively reduces "what was intended to be a final award on the merits of the case to the status of a partial award."