Case Update

Arbitration | Criminal Law | Legal Profession

John Holland Pty Ltd (fka John Holland Construction & Engineering Pty Ltd) v Toyo Engineering Corp (Japan)
[2001] 2 SLR 262

High Court - Originating Motion No 30 of 2000
Choo Han Teck JC
16, 22, 23 February, 14 March 2001

Award - Setting aside - Applicable regime - Express selection of ICC Rules to govern arbitration - Whether parties elected to exclude application of Pt II and Model Law - International Arbitration Act (Cap 143A, 1995 Ed) s 15

Award - Setting aside - Whether grounds for setting aside award established - International Arbitration Act (Cap 143A, 1995 Ed) s 24(b), Sch 1 art 34

Michael Hwang, SC, Tan Chuan Thye and Christopher Anand Daniel (Allen & Gledhill) for the applicant.
Wong Meng Meng, SC, and Nishith Kumar Shetty (Wong Partnership) for the respondent.

This was an application by John Holland Pty Ltd ('JHPL') to set aside an arbitration award given in favour of the respondent Toyo Engineering Corporation ('TEC'). A dispute arose between TEC and JHPL which they referred to arbitration as required under their contract. By contract, the parties expressly agreed to 'refer the matter in question to arbitration for settlement under the rules of Conciliation and Arbitration of the International Chamber of Commerce'.

A preliminary question in the application was whether Pt II and the Model Law of the International Arbitration Act (Cap 143A, 1995 Ed) ('IAA') applied. Counsel for JHPL contended that the parties had implicitly 'opted out' of the IAA and the Model Law. Counsel for TEC submitted that the Model Law applied notwithstanding the express selection of the ICC Rules to govern the arbitration. There was no dispute that the Arbitration Act (Cap 10) would apply if the parties had excluded the IAA by agreement.

JHPL's grounds for setting aside the award were as follows: (a) JHPL had not been permitted to argue that there was no contract by reason of the omission in issuing a notice of effectuation as required under art 5 of the contract; (b) the arbitrators had committed a 'perverse error' in finding that JHPL was relieved of its duty to pay liquidated damages and at the same time finding that the contractual date for completion applied; (c) TEC's termination of the contract must be made by an objective appraisal as to whether the breach was serious; (d) in respect of art 34 of the Model Law, it was contended that: (i) the award contained decisions on matters beyond the scope of the submission to arbitrate; and (ii) the public policy provision in art 34(2)(b)(ii) had been infringed.

Held, dismissing the motion:
Section 15 of the IAA requires the parties to be clear in selecting another set of rules if they do not wish the Model Law to apply by default. By agreeing to have the arbitration conducted in accordance with the ICC Rules, the parties have thereby agreed that the Model Law will not apply.

If the parties should subsequently at the proceedings itself, by consent or without objection, rely on the Model Law (or any other set of rules) at the arbitration they will be regarded as having agreed to do so on an ad hoc basis. That arrangement will end when either party wishes to revert to the chosen rules; and any dispute as to whether they would be permitted to do so will be determined by the arbitrator. The arbitrator is perfectly entitled to determine whether any issue of estoppel arises and whether there is a need to revert to the contractually chosen rules in writing. Therefore, in this case, the ICC Rules remain the governing rules to the exclusion of the Model Law.

The express wording of s 15 permits the parties to exclude either Pt II or the Model Law (or both).

When parties select Pt II of the IAA, without specifying the Model Law as well, the Model Law is naturally included because it is part of Pt II, as it is by means of the First Schedule to the IAA. However, the converse is not so. When parties select the Model Law without specifying Pt II of the IAA, the latter does not apply.

The parties had elected to apply the ICC Rules in place of the Model Law, thereby excluding the Model Law only. The election did not include Pt II of the IAA. Thus, the only provision under which JHPL may apply to set aside the award is s 24 of the IAA.

To succeed under s 24(b) of the IAA, one has to consider whether 'a breach of the rules of natural justice occurred in connection with the making of the award by which the rights of any party have been prejudiced'. It is incumbent upon the applicant to firstly, establish which rule of natural justice was breached; secondly, how it was breached; thirdly, in what way was the breach connected with the making of the award; and fourthly, how the breach had prejudiced the rights of the party concerned.

The complaint relating to the notice of effectuation, if valid, revealed no more than a plain error of law, or of a mixed fact and law. An error of this nature does not amount to misconduct.

In respect of contention (b), the court held that it was not appropriate to make any findings as to the correctness of the arbitrators' decision because if they had erred on this point, it was an error of law.

In respect of contention (c), an error or omission on the part of the arbitrators in this regard cannot be described as more than an error or omission in law.

As for contention (d)(i), none of the 'three fundamental and irreparable deficiencies' of the award which JHPL complained of can reasonably be regarded as a disregard of clear and unambiguous contract term so as to contravene art 34(2)(a)(iii).

To rely on art 34(2)(b)(ii), a public policy must first be identified, and then it must be shown which part of the award conflicts with it. The contention failed because no particular policy had been identified as having been embarrassed by the award.

CRIMINAL LAW

Lim Siong Khee v Public Prosecutor [2001] 2 SLR 342

High Court - Magistrate's Appeal No 256 of 2000
Yong Pung How CJ
3, 9 April 2001

Computer Misuse - Access to free Web-based e-mail account without authority - Whether consent of e-mail account holder or system provider is determinative - Whether authorisation to relate to kind of access in question to data - Computer Misuse Act (Cap 50A, 1998 Ed) ss 2(2), (5), 3(1), 8(1)

Heikel Bafana and Isreal Louis Ismail (Alexander Charles Louis) for the appellant.
David Khoo and April Phang (Deputy Public Prosecutors) for the respondent.

Ms Chong Yan Cheng ('Ms Chong') went on a trip to Europe with Mr Lim Siong Khee ('Mr Lim') sometime in April 1999. Upon their return to Singapore, Ms Chong ended the relationship. From April 1999 onwards, she started having problems logging into her e-mail account ('the e-mail account'). On 9 May 1999, an e-mail was sent out from the e-mail account to three of Ms Chong's friends. The contents of the e-mail were addressed to Ms Chong and they contained details of her purported intimate relations with Mr Lim during their Europe trip. Ms Chong confronted Mr Lim and informed the police. At the trial, Mr Lim admitted that he did access the e-mail account, but claimed that he had Ms Chong's consent to do so. The judge found that consent had not been given. He convicted Mr Lim under s 3(1) of the Computer Misuse Act (Cap 50A, 1998 Ed) ('the Act') and sentenced him to five months' imprisonment. At the appeal, it was argued that whether access was 'without authority' under s 3(1) depended on the system provider and not the e-mail account holder. Ms Chong's lack of consent was therefore immaterial. It was also argued that in any event, there was reasonable doubt whether Mr Lim lacked Ms Chong's consent.

Held, dismissing the appeal:
The phrase 'without authority' in s 3(1) is defined in s 2(5) of the Act. Access is 'without authority' if the person does not have the consent of the person entitled to the kind of access in question to the data. The understanding of consumers and industry is that it is the e-mail account holder who is entitled to access the data in free Web-based e-mail accounts.

For the purposes of s 8(1), the system administrator is not the person who determines who is authorised to access accounts. The legislative intent is that the system administrator can be criminally culpable if he sells passwords to other persons without the consent of the account holder. Whether access by a user is 'without authority' under s 8(1) depends on the account holder, not the computer system owner or provider. The phrase 'without authority' in s 3(1) had to be similarly construed.

Nothing had been raised in the appeal to justify overturning the finding of fact that consent had not been given. Even if consent had been given, this would not have made a difference. The authorisation had to relate to the kind of access in question to the program or data. Thus, even if Mr Lim was given Ms Chong's password to help her access her e-mail account while they were in Europe, he had no authority whatsoever to access that account to send off lurid e-mails or to check on her personal movements and affairs.

LEGAL PROFESSION

Re Flint Charles John Raffles QC [2001] 2 SLR 276

High Court - Originating Motion No 31 of 2000
Lai Kew Chai J
1 December 2000, 2 January, 13 March 2001

Admission of Queen's Counsel - Three-stage test for admission - Whether case of sufficient difficulty and complexity that local counsel unable to adequately and ably handle - Whether circumstances of case warranted court exercising discretion in favour of admission - Factors non-exhaustive - Legal Profession Act (Cap 161, 2000 Ed) s 21(1)

Vinodh Coomaraswamy and David Chan (Shook Lin & Bok) for the plaintiff.
Cho Sooi Yoon for the Law Society.
Eric Chin (Attorney General's Chambers) for the Attorney General.
Bernadette Balan and Kueh Ping Yang (Haridass Ho & Partners) for the 1st, 2nd, 6th, 8th, 9th, 10th, 12th, 13th, 14th and 27th defendants.
Chang Sau Teng Irene (PK Wong & Advani) for the 4th defendant.
P Balagopal (Palakrishnan & Partners) for the 5th defendant.
Godwin Gilbert Campos (Rodyk & Davidson) for the 3rd, 21st and 22nd defendants.
Roslina Baba and Carol Liew (Ramdas & Wong) for the 15th-20th defendants.

This is an application by Mr Charles John Raffles Flint QC of Blackstone Chambers, London for ad hoc admission under s 21 of the Legal Profession Act (Cap 161, 2000 Ed) ('the Act'), to practise as an advocate and solicitor of this court as leading counsel for the purpose of appearing on behalf of Malaysian International Trading Corporation Sdn Bhd ('Mitco') in Suit 280/2000/L ('the Suit'). Mitco is a company incorporated in Malaysia and is a wholly-owned subsidiary of Petroliam Nasional Bhd. On 17 May 2000, Mitco filed a generally endorsed writ of summons initially against 22 defendants. Eight other defendants were later added. Mitco is claiming against each or all 30 defendants, inter alia, damages for conspiracy to defraud, equitable compensation and/or damages for dishonest assistance of breach of trust and/or inducement to breach of contract.

Held, dismissing the application:
Our courts have developed a three-stage test when considering an admission under s 21(1) of the Act. At the first stage, the applicant must demonstrate that the case in which he seeks to appear contains issues of law and/or fact of sufficient difficulty and complexity to require elucidation and/or argument by a Queen's Counsel. Such difficulty or complexity is not of itself a guarantee of admission, for the decision to admit is still a matter for the court's discretion. At the second stage, therefore, the applicant must persuade the court that the circumstances of the particular case warrant the court exercising its discretion in favour of his admission. Finally, he has to satisfy the court of his suitability for admission.

The three factors are non-exhaustive. There are other factors identified in the other cases. Section 21(1) requires the court to take into account the circumstances of the case. Although circumstances vary from case to case, a court must always be concerned that those factors are material and have a bearing on its balancing act, whether it or a combination of factors tilted one way or the other.

In this case, the overall question is whether the defendants were engaged in a bona fide business transaction, and were in receipt of commission at rates normally obtained in the trade of palm olein, or were they participants in a massive fraud. At the bottom of it is the conspiracy to defraud or dishonest assistance in breaches of fiduciary duties or both. The court noted that it was not canvassed that factual issues could not be forensically articulated by local counsel nor was it asserted that there would arise any legal issue which may conceivably involve any extensive revisiting of any body of case law and the resetting of any boundaries.

Mitco's chances of recovering their moneys from the alleged fraudsters and dishonest assistants or recipients depend on the outcome of their forensic battles in jurisdictions other than Singapore. So far as its forensic battle in Singapore is concerned, its interest has been more than adequately served by local counsel assisted by its team of professional advisers. Such assets as are disclosed are now preserved to abide by the outcome of the Suit. The court was satisfied that Mitco would continue to be well served by local counsel.

Local counsel for Mitco went into the documentary trails in some detail and persuaded the court to relax certain implied undertakings which Mitco had made as to disclosures and use of information obtained pursuant to the search and seize orders. Local counsel also made out a case for an order to cross-examine certain defendants on their affidavits of disclosure. It was subsequently conducted over eight days and the transcript of the cross-examination runs to over 1,200 pages. By other interlocutory applications, local counsel was successful in obtaining from the court orders for certain defendants to repatriate their US$ deposits overseas to Singapore.

After weighing all the circumstances, the court formed the view that the case would involve issues which local counsel could, as amply demonstrated, adequately and ably handle and that Mitco's interest at the full-blown trial would be adequately and ably served by local counsel. Accordingly, the motion was dismissed.