merits of the DAB Decision. As the tribunal had made certain findings on the merits of the DAB Decision in a subsequent partial award, PGN considered the DAB Decision no longer binding The Court of Appeal rejected PGN’s first argument, finding that Clause 20.4 of the Red Book imposed “a distinct contractual obligation on the parties to comply promptly with a DAB decision once it is issued”. It found that CRWhad a separate substantive right to enforce the DAB Decision whether the DAB decision was final and binding or merely binding but non-final. The fact that the Tribunal subsequently still needed to review the DAB Decision and determine whether it ought to be opened up and revised did not have the effect of varying the InterimAward. Under section 19B of the IAA, the Interim Award would be final and binding and PGN had to comply with the DAB Decision. The Court of Appeal also rejected PGN’s second line of argument. It found that it was not commercially sensible to read Clause 20.4 to have the effect of a DAB Decision ceasing to be binding once the tribunal made any determination on any aspects of the merits of the parties’ underlying dispute. The key point was that the Interim Award was a final decision and could be enforced against PGN on its terms save only where there were grounds to set it aside or resist enforcement. The Interim Award required PGN to make prompt payment of the DAB Decision. This obligation remained valid and binding regardless of any subsequent award on the merits of the underlying dispute.
If the merits of the underlying dispute had been finally resolved (which in this case, they had not), and the outcome was an amount different from the DAB Decision, it was the parties’ obligation then to resolve the state of the final accounts. The fact that this accounting exercise subsequently needed to be carried out did not by itself render the Interim Award invalid or unenforceable. Comments The Court of Appeal’s decision in Perusahaan will no doubt be welcomed for those involved in international projects in Singapore or under Singaporean law. For one, it confirms the final and binding nature of an interim arbitral award issued under Singapore’s international arbitration legislation, echoing Singapore’s continued support for arbitration, whether domestic or international. For those carrying out operations under a FIDIC contract, the decision in Perusahaan is significant because it clarifies the obligation to pay DAB decisions promptly, thereby encouraging the security of payments under FIDIC contract. The Court of Appeal’s explanations of the operation of Clause 20 of the 1999 Red Book sheds light on the doubts arising under that provision. Namely, it confirms that a party required to pay an amount in accordance with a DAB decision under those Conditions of Contract must do so promptly. The DAB procedure is intended to resolve disputes in the first instance, the resolution of which may be subjected to arbitral review at some later stage, and that any decision made by the DAB must be complied with. Therefore, DAB decisions under FIDIC are binding, but not
36
Made with FlippingBook flipbook maker