DJO v DJP and others [2024] SGHC(I) 24

Introduction

By this application, the claimant, DJO, seeks an order that the final award dated 24 November 2023 (the “Award”) issued by the arbitral tribunal in ICC Arbitration Case No 26733/HTG (the “Arbitration”) be set aside in its entirety pursuant to s 24(b) of the International Arbitration Act 1994 (2020 Rev Ed) (the “IAA”) and/or various sections of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”), which is given force of law in Singapore by s 3 of the IAA.

This is an unusual and troubling case. International commercial arbitrations are an increasingly used means of resolving commercial disputes, often under the auspices of a body such as the International Chamber of Commerce (the “ICC”). The underlying objective is to resolve such disputes rapidly and in confidence, with the nominated arbitrator(s) being independent, impartial adjudicator(s) selected by the parties on the basis of their expertise in the legal and technical fields in question. Very often, these are either senior lawyers or retired judges experienced in the relevant law.

There is no wide-ranging right of appeal such as exists in the national laws. The proceedings are generally held in private and the award is a document confidential to the parties. It is thus essential that the parties can be assured that the process adopted will be thorough and fair and that the principles of natural justice will be applied.

This is reflected in the International Chamber of Commerce Arbitration Rules 2021 (the “ICC Rules”):

(a) Article 11 of the ICC Rules provides that:

(b) Article 22 of the ICC Rules, which addresses the “Conduct of the Arbitration” provides that:

These duties are amplified upon in Section III of the ICC’s “Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration Under the ICC Rules of Arbitration” (1 January 2021):

The arbitral tribunal’s duty of fairness and the rules of natural justice require it to form its conclusions on the issues to be decided by independently and impartially reviewing the evidence and submissions presented to it, deliberating on the matters arising and determining the weight to be attributed to those matters. But it is only that evidence and those submissions that should be taken into account; extraneous matters must be ignored.

Background to the parties’ dispute

The claimant, DJO, who was the respondent in the Arbitration, is a special purpose vehicle set up in October 2006 responsible for the operation of a network of railway lines in India that serve only freight trains (the “Dedicated Freight Corridors”). In 2015, DJO was negotiating various contracts relating to the Western Dedicated Freight Corridors.

The defendants, who were the claimants in the Arbitration, are three companies which formed a consortium (“Consortium X”) for the purpose of tendering for one of those contracts. Two of the members of the Consortium, DJQ and DJR, are Indian companies, whereas the third, DJP, is a Japanese company.

On 18 August 2015, the parties entered into a contract (the “CPT-13 Contract”). The CPT-13 Contract incorporated the International Federation of Consulting Engineers Conditions of Contract (1st Ed, 1999) (“FIDIC” and the “FIDIC Conditions”), as amended by the Particular Conditions of Contract and the Appendix to Bid.

Clause 20.6 was one of the FIDIC Conditions which was specifically amended by the parties so as to include an arbitration clause that provided for a different method of arbitration depending upon whether the contractor was a foreign or domestic contractor (as defined therein). It provided as follows:

Since DJP, the Japanese company, was the “Lead Member” of Consortium X, any dispute fell to be resolved in accordance with the ICC Rules in Singapore, Dubai or Delhi. On 11 August 2015, Singapore was selected as the seat of the arbitration.

The substantive contract was, however, governed by Indian law, such that any substantive issues arising would fall to be determined in accordance with Indian law.

On 19 January 2017, the Indian Ministry of Labour issued a Notification No. S.O.188(E) under the Minimum Wages Act 1948, increasing the daily rates of minimum wages payable to working men with effect from 19 January 2017 (the “Notification”).

Clause 13.7 of the FIDIC Conditions, as specifically amended by the parties, provided as follows:

The first two sub-clauses of cl 13.8 were in the standard form of the FIDIC Conditions, and provided as follows:

There then follow formulae for determining the precise adjustment to be made in any given case. It is to be noted that these were amended by the parties, a matter of significance which I shall return to below.

It is also relevant to refer to cl 20.1 of the FIDIC Conditions which was incorporated without amendment in the CPT-13 Contract:

In his response dated 9 June 2020, the Engineer gave his opinion that the Notification did not entail a change in law as envisaged in cl 13.7 and that the claim for changes in minimum wage had already been dealt with under cl 13.8. He also drew attention to the fact that Consortium X’s claim had not been initiated timely in accordance with cl 20.1.

DJO was not satisfied with this response and, after unfruitful attempts at amicable settlement and a rejection of its claim by the Dispute Adjudication Board (the “DAB”) as required under cl 20.2 of the CPT-13 Contract, it commenced the Arbitration on 16 December 2021.

The Arbitration

A three-member arbitral tribunal (the “Tribunal”) was constituted on 19 April 2022, with the three arbitrators each being an eminent retired Indian judge: (a) Judge A, nominated by Consortium X; (b) Judge B, nominated by DJO; and (c) Judge C, the presiding arbitrator, who was nominated by Judges A and B and approved by the ICC.

The parties tendered their respective opening submissions on 10 September 2022 (Consortium X) and 1 November 2022 (DJO). Oral submissions were heard by the Tribunal on 23 and 24 November 2022, 2 December 2022, 3, 10 and 18 January 2023, 21 February 2023 and 21 April 2023, after which the parties submitted their respective closing submissions on 8 May 2023. The Arbitration was declared closed by the Tribunal on 16 August 2023.

The main issues in the Arbitration can be summarised as follows:

(a) First, whether Consortium X was precluded from making its claim by reason of an applicable statutory limitation period.

(b) Second, whether Consortium X was precluded from making its claim by reason of waiver and/or estoppel.

(c) Third, whether Consortium X’s claim was precluded by reason of having been brought outside the timeline stipulated in cl 20.1 of the CPT-13 Contract.

(d) Fourth, if Consortium X’s claim was to be allowed, the quantum thereof.

(e) Fifth, the interest on the Award and costs of the Arbitration.

On 24 November 2023, the Tribunal issued the Award, in which it found in Consortium X’s favour on virtually every issue.

For completeness, neither party makes any criticism of the manner in which the Arbitration was conducted prior to the proceedings being declared closed on 16 August 2023. The problems that arise, and which underlie the grounds relied upon in support of DJO’s setting-aside application, lie in the Award itself and what happened in the Tribunal’s preparation of the Award.

The parallel arbitrations

In order to put the dispute in the present application into context, it is necessary to consider two other arbitrations which were in being at the same time as the Arbitration. The subject-matter of these parallel arbitrations were broadly similar to the Arbitration insofar as they also related to the effect of the Notification on contracts relating to the Eastern Dedicated Freight Corridor.

The CP-301 Arbitration

The first parallel arbitration (the “CP-301 Arbitration”) arose out of a contract (the “CP-301 Contract”) dated 29 August 2016. The claimant there was a Consortium (“Consortium Y”) of two Indian companies, one of which was DJR whilst the respondent was DJO. The CP-301 Arbitration was commenced on 18 May 2021.

The underlying factual matrix of the CP-301 Arbitration was similar to that underlying the Arbitration, but with notable differences. The full facts are set out in detail in the tribunal’s award in the CP-301 Arbitration (the “CP-301 Award”). I summarise the factual matrix underlying the CP-301 Arbitration in the following paragraphs.

Following the issuance of the Notification, on 4 August 2017, Consortium Y first raised with the Engineer the question of increased payments owing to the increase in minimum wage, claiming that reimbursement was due from DJO pursuant to cl 13.7 of the CP-301 Contract (which was in the same terms as cl 13.7 of the CPT-13 Contract).

On 17 August 2017, the Engineer rejected this assertion and indicated that the contract price would be adjusted every month as per the formulae in cl 13.8 of the CP-301 Contract (which was not in precisely the same form as in the CPT-13 Contract).

On 18 December 2019, Consortium Y renewed its claim under cl 13.7. There then followed correspondence between Consortium Y and the Engineer, during which the Engineer placed reliance on the 28-day period for the making of a claim pursuant to cl 20.1 of the CP-301 Contract, which Consortium Y contended was unenforceable.

Dissatisfied with the Engineer’s response, Consortium Y referred the matter to the DAB in July 2020. The DAB rejected the claim by a letter dated 20 January 2021, which led to Consortium Y commencing the CP-301 Arbitration on 18 May 2021.

As Consortium Y consisted solely of Indian companies, cl 20.6(b) of the CP-301 Contract applied. As a result, the CP-301 Arbitration was: (a) conducted in accordance with the rules of the Arbitration of the International Centre Alternative Dispute Resolution, New Delhi; and (b) seated in New Delhi and subject to the provisions of the Indian Arbitration and Conciliation Act 1996.

Arbitrators were then appointed. Consortium Y appointed Arbitrator D and DJO appointed Arbitrator E, neither of whom was involved in the Arbitration. However, Judge C, who was the presiding arbitrator in the Arbitration (see [23] above), was appointed as the presiding arbitrator in the CP-301 Arbitration. The tribunal for the CP-301 Arbitration was duly constituted on 20 July 2021.

The tribunal heard submissions in December 2021 and February 2022. Further oral arguments occurred in May 2022, followed by written submissions in July 2022. There were further written submissions, the last of which was on 3 February 2023.

The issues raised for determination in the CP-301 Arbitration are set out in paragraph 68 of the CP-301 Award, and were broadly similar to those in the Arbitration. The underlying factual matrix, as can be seen from the overview above, was, however, not the same and hence the issues were not identical. In particular, whereas Consortium Y had raised a claim for compensation under cl 13.7 of the CP-301 Contract in 2017 – soon after the Notification had been issued – Consortium X did not do so until March 2020, more than three years after the Notification. During the intervening period Consortium X had submitted, and was paid, on the basis of some 40 invoices that did not include sums directed to a claim under cl 13.7 (see [19] above).

The CP-301 Award was issued on 1 August 2023. It contained a lengthy and closely reasoned decision drawing upon many authorities. The tribunal found in favour of Consortium Y, holding, in particular, that:

(a) the Notification constituted a change of law within the meaning of cl 13.7 of the CP-301 Contract;

(b) a claim based on cl 13.7 was not limited to compensation by way of the formulae in cl 13.8 of the CP-301 Contract; and

(c) the 28-day period under cl 20.1 of the CP-301 Contract (which was in the same terms as cl 20.1 of the CPT-13 Contract) was “directory” rather than “mandatory”, such that Consortium Y’s failure to give notice to the Engineer within 28 days was immaterial.

The CP-302 Arbitration

It is not necessary to enter into a comparable degree of detail in relation to the second parallel arbitration (the “CP-302 Arbitration”). The CP-302 Arbitration arose out of a contract (the “CP-302 Contract”) that was in largely similar terms to those in the CP-301 Contract.

The claimant in the CP-302 Arbitration was a further consortium (“Consortium Z”) consisting of two Indian companies, one of which was DJR and the other a different company from those involved in the other two contracts. DJO was, again, the respondent in the CP-302 Arbitration.

As Consortium Z consisted solely of Indian companies cl 20.6(b) of the CP-302 Contract again applied such that the arbitration was: (a) conducted in accordance with the rules of the Arbitration of the International Centre Alternative Dispute Resolution, New Delhi; and (b) seated in New Delhi and subject to the provisions of the Indian Arbitration and Conciliation Act 1996 (see [36] above).

The CP-302 Arbitration commenced on 14 October 2021 and the tribunal was constituted on 17 December 2021. The claimant, Consortium Z, nominated the same arbitrator as in CP-301 (Arbitrator D), but DJO nominated a different person (Arbitrator E). However, once again, Judge C was appointed as the presiding arbitrator.

Oral arguments took place between July and November 2022, and written submissions were filed on 3 January 2023. The tribunal’s award (the “CP-302 Award”) was handed down on 27 August 2023.

It is to be noted that whereas in CP-301 and CP-302 Arbitrations, the teams of advocates for the respective parties came from the same firms, in the Arbitration counsel for DJO were the same but those for Consortium X were not.

My decision

The position of Judge C as the presiding arbitrator in all three arbitrations

It will thus be seen that three arbitrations were ongoing at the same time considering contracts containing the same or similar clauses and therefore involving the same or similar questions of law. However, the Arbitration was notably distinct from the CP-301 and CP-302 Arbitrations. It was to be conducted subject to the ICC Rules, whereas the CP-301 and CP-302 Arbitrations were conducted in accordance with the rules of Arbitration of the International Centre for Alternative Dispute Resolution, New Delhi. Further, whilst the CP-301 and CP-302 Arbitrations were seated in India (and thus had as their lex arbitri the Indian Arbitration and Conciliation Act 1996 (the “Indian Arbitration Act”)), the Arbitration was seated in Singapore.

The Tribunal for the Arbitration was the last to be constituted of the three arbitrations, as it was constituted in April 2022 whilst the tribunals in the CP-301 and CP-302 Arbitrations were constituted in July and December 2021 (see [23], [37] and [44] above). The hearings in the CP-301 arbitration had begun before the Tribunal was constituted and the hearings in both arbitrations were substantially concluded before the hearings began in the Arbitration (see [24], [38] and [45] above). Hence, by the time that Judge C was proposed as the presiding arbitrator in the Arbitration, he would have been aware of the underlying facts and issues in the earlier arbitrations and fully immersed in them by the time of the hearings. Both parties to the Arbitration nominated, as their arbitrators, persons – ie, Judge A and Judge B – who had not been nominated in the earlier arbitrations and who were therefore not similarly immersed. However, neither party objected to Judge C’s appointment, and neither Judge C himself nor the ICC saw this as a reason for him not to be appointed to preside over the Arbitration.

Be this as it may, Judge C was inevitably placed in an invidious position. In the Arbitration he was to hear arguments from counsel who were not all the same as those who had addressed him in the other arbitrations. Any information obtained, submissions made, or discussions which had taken place with his co-arbitrators in those arbitrators were confidential for the purposes of each arbitration. They thus could not be drawn upon or be allowed to influence in any way the proceedings in the Arbitration. In simple terms, Judge C was required to start afresh with an open mind and not seek to influence his co-arbitrators or the proceedings in the Arbitration with any accumulated knowledge or opinions.

In theory, I suppose that this could be done, but the process must be fraught with difficulties.

My observations on the Award in the Arbitration

Rather than approaching the issues de novo on the basis of the submissions made to them and writing a self-standing award without reference to the awards in the earlier arbitrations, the Tribunal elected to use the CP-301 Award (and/or the CP-302 Award) as a template for its Award in the Arbitration, and to “massage” it into a state where it dealt – or, at any rate, appeared to deal – with the issues in the Arbitration specifically. For brevity, I shall address matters on the basis that it was the CP-301 Award which was used as the template.

DJO submit that 278 paragraphs of the 451 paragraph-long Award were reproduced or substantially reproduced from the CP-301 Award. Consortium X takes issue with the exact number and the degree of reproduction but accepts that at least 212 paragraphs of the Award were taken. A comprehensive Schedule, setting out the parties’ agreement (and disagreement) on which parts of the Award were the subject of reproduction forms Annex B to DJO’s supporting affidavit, which is then commented upon in Annex B to Consortium X’s second reply affidavit.

In my view, it is not necessary to attempt to resolve the dispute as to which particular paragraph(s) of the Award were copied and which were not. It is clear from the degree of agreement between the parties on reproduction that Judge C drew heavily upon his previously acquired knowledge in the CP-301 and CP-302 Arbitrations and applied that knowledge to the writing of the Award. It is a matter of speculation as to whether he drew his fellow arbitrators’ attention to the existence of the other awards, to the conclusions that he and his fellow arbitrators in the other arbitrations had reached and the way in which they had chosen to address their views.

Equally, even if Judge C had made such disclosures to Judge A and Judge B, it is as unknown at which stage this occurred – whether before or after the Tribunal had held their deliberations on the materials before them. In any event, this does not matter. Neither Judge C, nor the other arbitrators, should have had any access to the material in the other arbitrations for the purposes of this Arbitration.

DJO has drawn my attention to a number of aspects of comparison between the two awards which, it asserts, demonstrates that in reaching its decision in the Award:

(a) the Tribunal placed weight on submissions in the earlier arbitrations and did not restrict itself to the submissions made in the Arbitration;

(b) drew upon authorities cited in the earlier arbitrations which were not cited in the Arbitration;

(c) recited and relied upon provisions in the CP-301 Contract which differed from those of the CPT-13 Contract which was the subject of the Arbitration;

(d) applied the wrong lex arbitri to the assessment of interest and costs; and

(e) failed to properly consider the issues of (i) limitation (both statutorily and under cl 20.1 of the CPT-13 Contract), as well as (ii) waiver and estoppel, on the basis of the facts and arguments in the Arbitration.

I accept that these factors demonstrate the problems that arose in seeking to transform the CP-301 Award into the Award. I shall consider each of these factors in turn.

The Tribunal’s references to submissions made in the other arbitrations

I begin with the Tribunal’s references to submissions from the other arbitrations in the Award.

In the CP-301 Arbitration, leading counsel for Consortium Y had been a Ms [AB] SC. Her submissions are referred to, including with express reference to her name, in the CP-301 Award. In the Award, one finds the same submissions being said to have been made in substantially identical words, but the reference to Ms [AB] SC is substituted for a reference to Mr [CD], who had appeared as leading counsel for Consortium X in the Arbitration.

As an example, paragraph 223 of the CP-301 Award opens with the words:

There then follow seven sub-paragraphs setting out Ms [AB]’s arguments.

In contrast, the opening words of paragraph 247 of the Award read:

There then follow six of the seven sub-paragraphs in paragraph 223 of the CP-301 Award, taken more or less verbatim. The only differences of substance are that:

(a) at the end of sub-paragraphs (iii) and (iv) of paragraph 223 of the CP-301 Award, reference is made to certain authorities which are not included in the sub-paragraphs in paragraph 247 of the Award – possibly because these were not cited in the Arbitration; and

(b) sub-paragraph (vii) of paragraph 223 of the CP-301 Award, which is not reproduced in paragraph 247 of the Award, sets out a proposition of law and certain authorities – again, the omission possibly being because said proposition and authorities were not cited in the Arbitration.

For ease in visual comparison, I set out a table containing paragraph 223 of the CP-301 Award alongside paragraph 247 of the Award (the differences between the two paragraphs are highlighted in bold and underline):

There are other examples of a similar attribution of submissions first made by Ms [AB] SC in the CP-301 Award being expressly attributed to Mr [CD] in the Award .

On the other hand, in the case of submissions made by counsel for DJO, the position is less stark but equally the substantially verbatim reproduction of his submissions supports DJO’s assertion that the Tribunal in the Arbitration were not focussing solely – or at all – on the submissions made to it, but were drawing upon submissions made in the other arbitrations to which two of the arbitrators (Judge A and Judge B) had not taken part.

This lack of focus on the submissions made specifically in the Arbitration is demonstrated by considering paragraph 286 of the CP-301 of the Award, which reads:

This paragraph is reproduced verbatim in paragraph 333 of the Award but, strikingly, DJO did not produce any equivalent computation for the purposes of its submissions in the Arbitration. Thus, the inclusion of a reference in paragraph 333 to “the Claimants hav[ing] arrived at the computation as given in the Tabular Representation in Annexure A as on 08 March 2022, as depicted above” makes no sense in the context of the Arbitration, thus justifying the inference that the Tribunal had not applied its mind specifically to DJO’s submissions in the Arbitration.

The Tribunal’s references to authorities not cited in the Arbitration

I have, at [61] above, made the observation that certain authorities referred to in the CP-301 Award had not been referred to in equivalent passages in the Award. This was however not always the case. For example, when considering the issue of whether the 28-day period in cl 20.1 of the CPT-13 Contract was mandatory or directory in paragraphs 140 to 180 of the Award, the text reproduced from the CP-301 Award included references to a number of authorities which were not cited to the Tribunal in the Arbitration but had been cited in the CP-301 Award. Nine such cases have been identified by DJO, and Consortium X does not dispute that these cases were not cited by either party in the Arbitration.

Consortium X makes the point that it is unclear whether these cases were actually cited by parties in the CP-301 Arbitration (as opposed to being unilaterally referenced by the tribunal in the CP-301 Award). But, with respect, that is beside the point. What is material is that these authorities were relied upon by the Tribunal in the Arbitration despite counsel in the Arbitration having not drawn them to the Tribunal’s attention. In this regard, I accept DJO’s contention that the Tribunal was drawing upon material other than that which was presented to it by the parties, without giving the parties the opportunity to address them on those authorities.

The Tribunal’s references to provisions that were not found in the CPT-13 Contract

In paragraph 253 of the Award, the Tribunal set out cl 13.8 of the CPT-13 Contract in full. I have, at [16] above, only set out the first two sub-paragraphs of it. The remainder of cl 13.8 consisted of details of how the adjustment was to be calculated. Crucially, this part of cl 13.8 was specifically modified by the parties such that it differed from the standard FIDIC clause and differed as between the contracts.

Unfortunately, however, the text of cl 13.8 set out in paragraph 253 of the Award, reproduced from paragraph 247 of the CP-301 Award, is the text from the CP-301 Contract which differed from the text in the CPT-13 Contract. These changes are helpfully identified by DJO in tabular form as follows (the differences being highlighted in bold and underline):

This error, in failing to appreciate the difference in the wording of cl 13.8 in the CP-301 and CPT-13 Contracts, caused the Tribunal to apply the wrong coefficients to factors “Lo” and “Ln”, and to refer to data published by the Ministry of Labour (applicable to the CP-301 Contract) rather than the Reserve Bank of India (applicable to the CPT-13 Contract).

Consortium X does not dispute that the Tribunal reproduced the wrong cl 13.8, but submits that this is of little moment in the context of the Arbitration. This may be so but it is, to my mind, a clear demonstration that the Tribunal were drawing upon the submissions made to, and the labours of, the Tribunal in the CP-301 Arbitration rather than focussing on the submissions made to them in the Arbitration.

The Tribunal’s application of the wrong lex arbitri to determining interest and costs

The Tribunal’s failure to consider certain unique issues to the Arbitration properly

As noted at [39] above, a crucial factual difference across the arbitrations was the length of the delay between the Notification and the time when Consortium X raised the issue of an adjustment under cl 13.7 in the Arbitration. Specifically, more than three years had elapsed from the Notification before Consortium X raised a claim for compensation under cl 13.7 of the CPT-13 Contract, during which Consortium X had submitted some 40 invoices which had not sought any uplift pursuant to cl 13.7. DJO contends that, by lifting large parts of their reasoning from the CP-301 and CP-302 Awards, the Tribunal failed to focus on the factual peculiarities unique to the Arbitration and that this of itself served to undermine the validity of the Tribunal’s reasoning and conclusions.

This is not a matter that I see a necessity to rule upon. It would require a detailed discussion of the facts and arguments, as well as an examination of the minutiae of the Award. There is an inevitable risk that this would entail, in substance, a review of the merits of the Tribunal’s findings on the implicated issues, thus transgressing the boundary line between the role of a seat court in a setting-aside application and that of a court exercising appellate jurisdiction over the substantive dispute.

It suffices to say that I accept DJO’s submission that, considering the issues in the Arbitration and the manner in which the Tribunal addressed them, the Tribunal’s reasoning was influenced – probably heavily influenced – by what had gone on in the parallel arbitrations and by the way the issues had been argued and resolved in those proceedings. Little focus appears to have been applied to the specific factual matrix in this case. Had their minds been focussed solely on the facts and submissions in the Arbitration, the actual (and different) factual matrix would have been at the forefront of their deliberations which it plainly was not.

Applicable legal principles

DJO has invoked a number of grounds which it says the Award is liable to be set aside on. It relies on: (a) Art 34(2)(a)(iv) of the Model Law; (b) Art 34(2)(b)(ii) of the Model Law; and (c) s 24(b) of the IAA.

Article 34(2)(a)(iv) of the Model Law provides that an award may be set aside for a defect in the composition of the tribunal or non-compliance with the parties’ agreed arbitral procedure:

Article 34(2)(b)(ii) of the Model Law provides that an award may be set aside if “the award is in conflict with the public policy of [Singapore]”.

Section 24(b) of the IAA provides that an award may be set aside if there has been “a breach of the rules of natural justice … in connection with the making of the award by which the rights of any party have been prejudiced”.

The principles applicable to determining whether or not an award should be set aside are well-settled. The starting point is that the courts’ role is guided and circumscribed by the principle of minimal curial intervention. In the Court of Appeal decision of BLC and others v BLB and another [2014] 4 SLR 79. Andrew Phang Boon Leong JA (as he then was) outlined this cornerstone principle of international arbitration as follows (at [51]–[53]):

More recently, in the Court of Appeal decision of CJA v CIZ [2022] 2 SLR 557, Judith Prakash JCA (as she then was) reaffirmed that (at [1]):

The principles applicable to a challenge based on Art 34(2)(a)(iv), so far as it relates to an assertion that the tribunal had deviated from the parties agreed arbitral procedure, are conveniently set out in the recent High Court decision of DGE v DGF [2024] SGHC 107 (at [121]):

It will be seen that on the facts of this case, the alleged breach of agreed procedure lay in the way the Award was written, so that the last of these requirements could not be met. This would, I apprehend, not have been fatal to the argument since there was no opportunity to object so that the concern about hedging against an adverse result did not arise (see CAJ and another v CAI and another appeal [2022] 1 SLR 505 at [67]–[68]).

As the argument developed however, it became apparent that the basis for it rested on the requirement in Art 32(2) of the ICC Rules that the Tribunal should give the reasons for its decision in the Award and that the result of the Tribunal’s copy-and-pasting meant that the reasons in the Award were no reasons at all. In effect, the argument was that the Tribunal had failed independently and impartially to consider the arguments in the Arbitration and form their own conclusions on those arguments. This is a matter of fairness which falls squarely within the field of natural justice.

In these circumstances, I find it unnecessary to consider the submissions under Art 34(2)(a)(iv) separately from those relating to breach of natural justice.

So far as concerns the question of breach of natural justice, it is settled law that the two pillars of natural justice are the rule against bias (nemo judex in causa sua) and the right to a fair hearing (audi alteram partem) (see, eg, the Court of Appeal decision of Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86 (“Soh Beng Tee”) at [43]). It is these principles that underlie the obligations of arbitrators appointed by the ICC as set out in Arts 11 and 22 of the ICC Rules which I have referred to at [4] above.

The principles governing challenges based on alleged breaches of natural justice are well-established. They can be summarised as follows:

(a) The applicant must: (i) identify the rule of natural justice allegedly breached; (ii) establish how the rule was breached; (iii) establish the way the breach was connected to the making of the award; and (iv) show that the breach prejudiced its rights (see Soh Beng Tee at [29]).

(b) In assessing if there has been a breach of natural justice, the court will not “carry out a hypothetical or excessively syntactical analysis of what the arbitrator has written”, nor will it approach the award with a “meticulous legal eye endeavouring to pick holes, inconsistencies and faults … with the objective of upsetting or frustrating the arbitration” (see the Court of Appeal decision of AKN and another v ALC and other appeals [2015] 3 SLR 488 (“AKN v ALC”) at [59]).

(c) The threshold for a breach of natural justice is a high one, and it will only be in exceptional cases that a court will find that threshold crossed (see Soh Beng Tee at [54]).

(d) As there is a particular risk of natural justice challenges being used in substance as disguised appeals on the merits of the tribunal’s findings in the award, the court should focus on the “real nature of the complaint”, rather than the language or form in which the challenge is presented (see AKN v ALC at [39]).

(e) It bears emphasis that it is necessary to demonstrate how the breach of natural justice has caused “actual or real prejudice” to the rights of the aggrieved party, as opposed to mere “technical unfairness” which would not attract the court’s intervention (see Soh Beng Tee at [91]). However, the bar is not set as high as requiring the challenger to prove that a different outcome would necessarily have resulted but for the breach of natural justice (see the Court of Appeal decision of L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another [2013] 1 SLR 125 at [54]).

DJO has cited a number of cases illustrating circumstances in which the courts have found breaches of natural justice, but each case must necessarily turn on its own facts. Invariably, these cases turn on the question of whether the parties in the particular case were given a proper opportunity to present their arguments and whether the arbitrators had considered all the issues that fell to them for decision. None of these authorities directly addresses the unusual facts of this case.

The closest analogy is perhaps the High Court decision of Yap Ah Lai v Public Prosecutor [2014] 3 SLR 180 (“Yap Ah Lai”). In that case, the District Judge had, in his sentencing decision, substantially reproduced crucial passages of his reasoning from his reasoning in another decision that involved a similar offence. In finding that the measure of reproduction provided a “reasonable basis for concluding that the District Judge erred in failing to appreciate the material that was before him in each case” (at [73]), Sundaresh Menon CJ made the following observations (at [69]–[70]):

The logic of Menon CJ’s reasoning is, to my mind, equally applicable to a case of cutting-and-pasting in arbitral proceedings.

So far as concerns the public policy challenge, it is settled law that a successful challenge on this ground would be highly exceptional. The threshold is a very high one. As Judith Prakash JA explained in the Court of Appeal decision of BTN and another v BTP and another [2021] 1 SLR 276 (at [56]):

Whether the Award was rendered in breach of natural justice

The parties’ arguments

DJO focusses its argument on the basis that the “scale, scope and source of the cut-and-pasting breached the parties’ contractual expectations that their tribunal would independently and impartially weigh, deliberate and decide their arguments”. It cannot be right, DJO asserts, for appointed arbitrators simply to follow the reasoning of a different tribunal in another arbitration.

Put simply, DJO’s assertion is that the incorporation of (what they refer to as) plagiarised material on the scale in this case is the antithesis of an independent and impartial analysis.

In this connection, DJO draws attention to the fact that the judiciaries, both in Singapore and elsewhere, have clamped down on plagiarism at virtually every level of the legal profession and submits that there should be no leniency in the case of arbitrators.

I consider, with respect, that this somewhat emotive approach is in danger of missing the point. The use of the word “plagiarism” carries with it a stigma of dishonesty; that is, that the person making use of another’s material is doing so in a bid to benefit, in the reader’s eye, from the skill and labour of another as though it is their own.

That is not the case here. The copy-and-pasting was done, it would appear, not with a view to hiding the origin of the copied work but simply as a shortcut to minimise the work involved in writing the Award. The Tribunal clearly thought that this was an acceptable approach. I do not consider that in these circumstances the mere fact of copying serves to taint the award and render it liable to be set aside. It is necessary to look at the nature, the extent and the effect of the copying to determine whether the principles of natural justice are engaged.

DJO then goes on to submit that the Tribunal’s copy-and-pasting in the Award involved related to the main arguments on liability and cl 20.1 of the CPT-13 Contract that had been canvassed at the hearing – on statutory limitation and waiver and/or estoppel – and that certain material inferences could be drawn from this:

(a) First, that the draft of the Award had been prepared by Judge C (as presiding arbitrator) in breach of his obligations of confidence as an arbitrator in the parallel arbitrations, and in breach of his obligation of independence and impartiality in the Arbitration.

(b) Second, that the two co-arbitrators, Judge A and Judge B, did not read the draft Award either properly or at all, as, had they done so, they would have appreciated that it did not address the facts or arguments presented to them in the Arbitration. Accordingly, they failed to apply their minds independently to verify that the Award was prepared based on the materials before them and thus failed in their duties of independence and impartiality in the discharge of their decision-making function.

On this basis, DJO asserts that there have been at least four breaches of natural justice involved in the making of the Award:

(a) First, that the rule against bias precludes an arbitrator from pre-judging a case and that the accumulated knowledge of Judge C and his willingness to use that knowledge in preparing the Award constitutes impermissible pre-judging.

(b) Second, that the right to a fair hearing includes the right to a fair, independent and impartial decision, which has not been the case in light of the Tribunal’s copious copy-and-pasting in the Award.

(c) Third, that the right to a fair hearing enjoins a tribunal to deal with the dispute before it based on, and only on, the material before it, which the Tribunal had failed to do by relying on arguments and facts from the parallel arbitrations which were extraneous to the parties’ dispute in the Arbitration.

(d) Fourth, that the right to a fair hearing prevents a tribunal from relying on factual or legal reasoning that has not been canvassed before it without giving the parties the opportunity to respond thereto, and the Tribunal by lifting reasoning from the CP-301 and CP-302 Awards had breached this rule.

In support of these contentions, DJO relies on the five factors set out at [56] above, which I have considered (and generally accepted) at [57]–[77] above.

On the issue of demonstrable prejudice, DJO’s assertions can be summarised as residing in the fact that, if the Tribunal had considered the facts and arguments before it in vacuo, as it was required to and should have done, it could reasonably have come to different conclusions.

Consortium X, on the other hand, approaches the matter from a very different angle. The real issue, they argue, is whether the Tribunal applied its mind to the essential issues in the Arbitration and they contend that the Tribunal did do so. They point to the fact that all three members of the Tribunal were eminent retired judges, that the parties were represented by experienced counsel, that the arbitral process was thorough and that the Award was scrutinised and approved by the ICC.

Consortium X makes a number of points about the reproduced portions of the Award, placing emphasis on the fact that the similarities between the contracts across the three arbitrations meant that the same main issues arose, and given the common counsel and Judge C as an arbitrator in all three, it was understandable that there would be similarities and consistencies across the awards. The fact that the same language was used so that there was no novelty in expression is not, it says, a reason for concluding that the Tribunal made no attempt to apply its mind independently to the issues in the Arbitration before reaching the same conclusions as in the parallel arbitrations and choosing to use the same language to express those conclusions.

Consortium X contends that the task of the court is to decide if the circumstances disclose a clear and inescapable inference that the Arbitrators lifted sections of the Award from the CP-301 and CP-302 Awards without applying their minds to the issues in the Arbitration. The nub of its submissions lies in the following statement in the Court of Appeal’s decision in CVV and others v CVB [2024] 1 SLR 32 (at [30(a)]):

Consortium X then continues by examining each issue and identifying passages in the Award that focus on each issue and contend on the basis of such exercise that the Tribunal had adequately performed the task of applying its mind to each essential issue in the Arbitration.

Discussion

The starting point of Consortium X’s analysis is to ask if the Tribunal had applied its mind to the essential issues in the Arbitration. In my view, there is, however, a necessary antecedent question: did the Tribunal apply its mind to the issues in an independent, impartial and fair manner? If it did not, then however thorough its reasoning in relation to the issues, that thoroughness would not overcome the underlying flaw.

In this regard, Consortium X’s representative gave evidence that he had been advised that the question which arises for the court’s determination is:

I respectfully agree with that advice. The obligation of independence and impartiality lies at the heart of natural justice. Exercising one’s mind properly involves not drawing on extraneous matters so as to be able to focus solely on the factual matrix of the case and the submissions made to the Tribunal. It also requires that obligations of confidence are maintained.

The first breach of natural justice alleged by DJO is pre-judging on the part of Judge C as the presiding arbitrator in the Arbitration. As the argument developed in oral submissions, this developed into a submission of apparent bias on the part of Judge C. My attention was drawn to the High Court decision of CNQ v CNR [2023] 4 SLR 1031 (“CNQ v CNR”), which also concerned the situation of the same arbitrator having been appointed in related arbitration proceedings. In finding on the facts that there had not been any pre-judgment or apparent bias on the part of the arbitrator, Andre Maniam J reasoned as follows (at [54]–[59]):

There are at least two crucial differences between the facts in CNQ v CNR and the present case. First, there is in this case no suggestion that the CP-301 Award played any part in the arguments addressed to the Tribunal. Indeed, the CP-301 Award could not have done so given that it was only handed down after the oral proceedings in the Arbitration had closed. Second, even putting aside the fact that the CP-301 Award post-dated the parties’ oral submissions, it was in principle impermissible for Judge C to put the CP-301 Award to the parties for comment, as he would in doing so have breached his duties of confidence arising from the CP-301 Arbitration. Thus, the CP-301 Award could not be put to the parties such that they could make submissions on it.

As indicated in the italicised passage quoted in CNQ v CNR from the Court of Appeal decision of BOI v BOJ [2018] 2 SLR 1156, the correct approach is for the court to assume the mantle of a fair-minded, informed and reasonable observer and to ask whether such person, after considering the facts and circumstances, would suspect or apprehend that the arbitrator had approached the matter with a closed mind.

In my judgment, on considering the facts and circumstances of this case, the hypothetical fair-minded, informed and reasonable observer would undoubtedly have held such suspicions or apprehensions. The Award did not rehearse the submissions actually made to the Tribunal, but attributed submissions made in the earlier arbitration – repeated almost verbatim – to counsel in the Arbitration. There can, to my mind, be no clearer indication to such an observer that Judge C may have approached the matter with a closed mind. It bears emphasis that, in light of the maxim that “justice should not only be done, but manifestly and undoubtedly be seen to be done” (see The King v Sussex Justices, ex p McCarthy [1924] 1 KB 256 at 259), the test for apparent bias is whether there is a reasonable suspicion or apprehension that justice may not have been done, as opposed to a concluded view that it was not. The full facts of what went on in the Tribunal’s deliberations and the preparation of the Award will not be known to such an observer, but based on what they can glean from reading the Award on its face against the background of what they would know, the suspicion or apprehension is a very real one. With regret, I conclude that the assertion of apparent bias against Judge C, a highly experienced judge and arbitrator, is well-founded.

The second ground relied upon by DJO is that its right to a fair hearing included a right to a fair, independent and impartial decision and this has not been the case given how the Award turned out. The existence of the right claimed by DJO was not disputed, nor could it have been. Ultimately, this was an issue of fact. In my judgment, it is abundantly clear from the facts which I have rehearsed at length above that the Award was not the independent work of the Tribunal based solely on the material and submissions before them in the Arbitration. Where, in making its award, a tribunal draws heavily on facts and arguments in previous cases and does not clearly distinguish between those facts and arguments and those which are presented to them in the instant case and also fails to give the parties an opportunity to address it on the previous award, the right to a fair, independent and impartial award will be lost.

It is evident from the court’s reasoning in CNQ v CNR that the fact that the arbitrator allowed the parties to submit on the differences between the first and second arbitrations was a crucial step in concluding that there was no pre-judgment. No such opportunity was afforded to the parties by the Tribunal in the present case. In these premises, I have little hesitation in finding that the second ground has also been made out.

As the third and fourth grounds raised by DJO are a sub-set of the reasons which underlie the second ground, there is no need to consider them separately.

In sum, I accept DJO’s submission that the Award was made in breach of natural justice and is therefore liable to be set aside on that ground.

Whether the Award conflicts with the public policy of Singapore

My finding that the Award is liable to be set aside on the basis of breach of natural justice makes it unnecessary for me to consider in any detail the alternative ground relied on by DJO under Art 34(2)(b)(ii) of the Model Law; that the Award is in conflict with the public policy of Singapore. This was based on the broad assertion that plagiarism of any sort was fundamentally contrary to Singapore public policy.

For the reasons I have given, I would not characterise what the Tribunal did as being the usual type of concealed dishonest plagiarism and certainly would not have held that what the Tribunal did crossed the very high threshold required for a finding of a breach of public policy.

Conclusion

For the reasons given, I have concluded that the Award was rendered in breach of natural justice and must be set aside on that ground.