Kiran Raj

The Supreme Court of Singapore has set aside an arbitral award passed by a tribunal presided over by former Chief Justice of India Dipak Misra upon finding that almost half of the contents of the award were verbatim “copy-pasted” from earlier awards passed by the same presiding arbitrator. The Division Bench comprising Chief Justice Sundaresh Menon, Justice Steven Chong, and International Judge David Edmond Neuberger held that the award was rendered in breach of the rules of natural justice and ordered that it be set aside in its entirety. The court held that the decision-making process adopted by the tribunal compromised the parties’ right to a fair hearing, introduced apparent bias, and resulted in unequal access to material among tribunal members.

The dispute arose under a construction contract awarded in August 2015 for the execution of works on India’s western Dedicated Freight Corridors. The respondent was a special purpose vehicle incorporated to manage the project. The appellants were three companies that formed a consortium and entered into the CPT-13 Contract. The contract incorporated the 1999 edition of the International Federation of Consulting Engineers Conditions of Contract, with modifications introduced through the Particular Conditions and Appendix to Bid.

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On 19 January 2017, the Indian Ministry of Labour and Employment issued a notification increasing daily minimum wages for workmen. In March 2020, the appellants submitted a claim for additional payment, contending that the notification constituted a change in legislation under Clause 13.7. The respondent rejected the claim.

Arbitration commenced in December 2021. The arbitration was seated in Singapore and administered under the ICC Rules effective from 1 January 2021. Indian law governed the substantive obligations. The tribunal consisted of three retired Chief Justices of Indian High Courts. The President of the tribunal was Dipak Misra, former Chief Justice of India. The co-arbitrators were Gita Mittal and Krishn Kumar Lahoti. The tribunal delivered its award on 24 November 2023, allowing the appellants’ claims.

The respondent challenged the award, arguing that the tribunal relied heavily on two earlier awards passed in separate arbitrations under the CP-301 and CP-302 contracts. Those arbitrations involved related but distinct claims and were conducted under different procedural rules, seated in New Delhi. The respondent in all three arbitrations was the same, and one of the appellants in the current matter was a party to both the CP-301 and CP-302 arbitrations. The President of the tribunal was common to all three proceedings. The co-arbitrators were not. The CP-301 and CP-302 awards were issued before the present award.

The Supreme Court of Singapore held that the award in question contained at least 212 paragraphs out of 451 that had been reproduced from the earlier awards. The court recorded that the award was not drafted independently, but was prepared using the earlier awards as templates, with modifications introduced to address the present arbitration.

The respondent had opposed the claim on several legal and procedural grounds. These included the statutory time bar under the Indian Limitation Act 1963, the waiver of claims by continuing performance without reserving rights, and failure to comply with the contractual timelines for notification and submission of supporting particulars. The respondent also raised new arguments that were not part of the earlier arbitrations. The tribunal rejected all these arguments and ruled in favour of the appellants.

The respondent applied to the High Court of Singapore to set aside the award under Section 24(b) of the International Arbitration Act 1994 and Article 34 of the Model Law. The High Court allowed the application on the ground that the award had been rendered in breach of natural justice. The decision was brought before the Division Bench of the Supreme Court of Singapore.

The Supreme Court of Singapore held that the process adopted by the tribunal was in breach of both pillars of natural justice: the right to be heard and the rule against apparent bias. The court stated that a fair and independent decision requires the tribunal to consider the specific arguments and evidence placed before it in each arbitration, without reliance on prior awards issued in other proceedings.

The court recorded that the award contained material drawn from the CP-301 and CP-302 awards that had not been introduced in the present arbitration. Paragraph 333 of the award, for example, referred to a computation said to have been submitted by the respondent, even though no such computation had been submitted in the current arbitration. The tribunal had also referred to legal authorities that were not cited by either party and had not been put to them for comment.

The court found that the award cited an incorrect version of Clause 13.8. The clause in the CPT-13 Contract differed from its version in the CP-301 Contract, yet the award reproduced the language and formula applicable to CP-301. The award also applied the Indian Arbitration Act to matters of interest and costs, even though the governing procedural law was Singapore’s International Arbitration Act. The court noted additional drafting errors, including a mistaken reference to the title of the CP-301 Contract instead of the CPT-13 Contract.

The court recorded that the extensive reproduction of content from the CP-301 and CP-302 awards gave rise to a reasonable suspicion that the tribunal had not considered the present matter with a fresh and independent mind. It held that the method adopted for preparing the award created an impression that the President of the tribunal had approached the matter with pre-formed conclusions based on prior awards.

The court stated that the parties were entitled to a process in which all tribunal members had equal access to the material on which the award was based. The co-arbitrators in this matter were not involved in the prior arbitrations and did not have access to the earlier awards. The use of those awards as a basis for the present decision therefore introduced an asymmetry among arbitrators.

The court recorded that the copying from prior awards, combined with the associated errors and omissions, constituted a fundamental defect in the decision-making process. It held that the breach of natural justice was not limited to isolated issues, but affected the award in its entirety.

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The Supreme Court of Singapore dismissed the appeal and ordered that the arbitral award dated 24 November 2023 be set aside in full. The court held that the tribunal’s reliance on earlier awards, without notice to the parties or opportunity to respond, breached the parties’ right to a fair hearing. It held that the apparent reliance on findings from unrelated proceedings gave rise to a reasonable apprehension of bias.

The court did not accept the submission that only portions of the award should be set aside. It held that the complaint concerned the entire process of decision-making and not a limited set of findings. The breach was found to permeate the entire award.

The court also held that remission of the affected parts to the tribunal was not available. Once an award has been set aside, remission cannot be sought on appeal. The court directed that unless parties agreed on costs, they should submit written submissions, limited to eight pages, within three weeks of the date of the decision.

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