Seeking corrections to an award under Singapore Law

Seeking corrections to an arbitral award- Implications for extending time to set aside awards under Singapore law

On receiving an arbitration award a party can apply to the tribunal for a correction of the award. Doing so can entitle it to additional time for applying to set aside the award. In BRS v BRQ and another and another appeal [2020] SGCA 108, the Singapore Court of Appeal recently clarified the nature of the provision governing such extensions of time, which has implications for parties seeking to set aside an arbitral award (see below).

BRS (the Seller) and BRQ (the Buyer) contracted for the building of a hydroelectric power plant. The project was undertaken through a special purpose vehicle (SPV). A dispute arose that was referred to arbitration seated in Singapore, and the award was in favour of the Buyer. The SPV was also made a party to the arbitration.

The Seller applied to the tribunal for a correction of the award. Three months from when the corrections were disposed of, the Seller applied to court to set aside the award. The Buyer argued the Seller made its application out of time because the corrections sought were an attempt to get the tribunal to review the merits of the case, and therefore the Seller was restricted to the initial time limit for setting-aside applications, which is three months from when the award is received. The Court found in the Buyer’s favour and ruled the Seller was out of time.

Basis for setting aside and arbitral award

Courts in the jurisdiction where an arbitration is seated have powers to supervise the arbitration. This includes the power to set aside an arbitration award. However, the grounds for setting aside an award are limited. Those exceptions are set out in Article 34 of UNCITRAL’s Model Law on International Commercial Arbitration (the ‘Model Law’), the standard arbitration law globally, which is incorporated into Singapore law through Singapore’s International Arbitration Act (IAA).

In summary, the exceptions are for cases where the arbitral tribunal lacked jurisdiction, there was procedural irregularity or the arbitration contravened public policy. In addition, section 24 of the IAA provides additional grounds for setting-aside, namely where the making of the award involved fraud or corruption, or a breach of the rules of natural justice.

Article 34 also states that the setting-aside application must be made within three months of the party receiving the award, or if that party had requested corrections (as the Seller had done), within three months from when the tribunal disposed of that request.

In BRS V BRQ, the Seller received the award on 31 January 2018. It requested corrections, which the tribunal dismissed on 23 March 2018. Three months after that, on 22 June 2018, the Seller applied to set aside the award. The Buyer argued that the Seller’s request for corrections did not serve to extend time, and the Seller should have applied for setting aside by 30 April 2018 instead, that is three months from receiving the award. The Court as noted, agreed with the Buyer.

The corrections sought

Article 33 of the Model Law entitles a party to request corrections of ‘any errors in computation, any clerical or typographical errors or any errors of similar nature’ within 30 days of receiving the award.

In this case, the Seller requested three corrections. In relation to two requests, the Seller submitted that the tribunal failed to consider certain factors bearing on the amount for which the Seller was liable to the Buyer. The Court held these requests effectively sought a review of the award on the merits, and so were not corrections permitted under Article 33.

The Seller’s third request claimed the tribunal made an error in the interest awarded, which was from 4 July 2014, the date of the Buyer’s legal notice in relation to the arbitration proceedings. As the interest was awarded in favour of the SPV, which only joined the arbitration on 31 December 2014, the Seller contended that the interest should have run from this later date. The Court noted that the Buyer’s notice of 4 July 2014, and other notices, had informed the Seller of the SPV’s claims, and were copied to the SPV. As such, it could be inferred that the notices were also issued on behalf of the SPV. Given this, the Court found that the Seller was not seeking to correct an error by the tribunal, but was trying to achieve a review of the tribunal’s decision on this point.

The Seller had argued that even if the corrections requested did not qualify as such under Article 33, nevertheless the request was still one that ‘had been made under Article 33’ for the purposes of Article 34(3), which states that:

(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the award or, if a request had been made under Article 33, from the date on which that request had been disposed of by the arbitral tribunal.

The Seller’s argument was rejected by the Court. In doing so, the Court effectively clarified that for a corrections request to qualify for an extension of time for applying to set aside an award under Article 34(3), that request must in substance be compliant with Article 33.

Implications

The ruling in BRS v BRQ means parties to arbitration in Singapore should be aware that:

• Requests for corrections to an award must in substance be Article 33 corrections requests.
• Such Article 33 requests must be made within 30 days of receiving the award and should be disposed of within 30 days.
• If an Article 33 corrections request has not been disposed off within 30 days, they should ensure that the application for setting-aside the award is made before the expiry of three months from the date the award was received.
• Even if the corrections request has been dealt with promptly, it may still be prudent not to rely on the time limit extension under Article 34(3) to preclude any arguable case that the corrections request was not in substance an Article 33 corrections request.