Cut, Paste, and Overruled! SICC Voids Retired Indian Judge’s Award for Arbitrator I?m?Partiality

Written by Tarasha Gupta and Akshath Indusekhar, Jindal International Regulation College, OP Jindal International College, Sonipat, India

Lately, the Singapore Worldwide Business Court docket (“SICC”) in DJO v. DJP & Others put aside an award authored by retired Indian judges that it deemed to have copied and pasted parts of one other arbitral award. The SICC reasoned its determination on the idea that the copy and pasting mirrored the arbitrators’ partiality and their being influenced by arguments extraneous to the arbitration at hand. This text unravels the rationale for the SICC’s judgement on this peculiar case and explores its implications on worldwide business arbitration for seat courts throughout jurisdictions worldwide.

Transient Information

The Claimant, DJO, was the Respondent within the Arbitration. The Defendants / Claimants within the Arbitration are a consortium of two Indian corporations and one Japanese firm (“Consortium X”), fashioned to tender for a contract with DJO referring to the Western Devoted Freight Corridors. DJO and Consortium X entered a contract in August 2017, incorporating the Worldwide Federation of Consulting Engineers Situations of Contract and offering for disputes to be resolved by arbitration seated in Singapore, in accordance with the ICC Arbitration Guidelines 2021 (“ICC Guidelines”). The substantive contract was to be ruled by Indian regulation.

In January 2017, the Indian Ministry of Labour issued a Notification growing the minimal wages payable to workmen. Greater than three years later, in March 2020, Consortium X sought an adjustment for added labour prices because of the Notification. After the processes set out within the contract had been unsuccessfully exhausted and makes an attempt at an amicable settlement and a declare earlier than the Dispute Adjudication Board had been unsuccessful, arbitration commenced between Consortium X and DJO (“the Arbitration”). The three-member arbitral tribunal constituted of three eminent retired Indian judges (“the Tribunal”). Judges A and B had been nominated by every get together. Decide C was nominated by Judges A and B and permitted by the ICC.

Concurrently, two different arbitrations occurred referring to the impact of the Notification on contracts referring to the Japanese Devoted Freight Hall. Decide C was appointed as arbitrator in these different arbitrations as effectively. The hearings in these arbitrations had considerably concluded earlier than the hearings started within the Arbitration between DJO and Consortium X. Crucially, whereas the Arbitration was seated in Singapore and performed in keeping with the ICC Guidelines, the opposite two arbitrations had been seated in India and performed in accordance with the foundations of arbitration of the Worldwide Centre for Different Dispute Decision, New Delhi. Accordingly, the lex arbitri for the 2 different arbitrations was the Indian Arbitration & Conciliation Act, 1996.

Arbitrator Bias and Copied Parts of Arbitral Awards

DJO submitted that 278 out of 451 paragraphs of the ultimate award handed within the Arbitration (“the Award”) had been considerably reproduced from an award in one of many two different arbitrations. Consortium X accepted that 212 paragraphs of the Award had been taken, however disagreed with the diploma of copy. The SICC seen it pointless to resolve the dispute as to which paragraphs had been copied– the events’ settlement on this level was sufficient to indicate that Decide C closely relied upon, and utilized, his information of the opposite two arbitrations within the current Arbitration.

The SICC famous a number of issues within the Award handed within the Arbitration vis-à-vis that handed within the two different arbitrations. The Tribunal referred to submissions from the opposite arbitrations within the Award, which had been by no means made by the events to the Arbitration. The Tribunal attributed arguments which had been by no means raised by the events to them, together with relying upon authorities which had been by no means drawn to the Tribunal’s consideration. The Tribunal additionally failed to understand the distinction within the wording with the contracts within the different arbitrations and DJO/Consortium X’s contract, referring to provisions which weren’t discovered within the contract between DJO and Consortium X. To the SICC, this clearly demonstration that the Tribunal drew upon the submissions made within the different arbitrations, relatively than deciding solely primarily based on that made within the Arbitration.

Relevant Authorized Rules

Primarily based on events’ submissions, the SICC thought of the plausibility of setting apart the impugned Award primarily based on three provisions. First, Article 34(2)(a)(iv) of the UNCITRAL Mannequin Regulation on Worldwide Business Arbitration (“Mannequin Regulation”) was thought of, which permits for an arbitral award to be put aside on account of non-compliance with the events’ agreed upon arbitral process. Second, Article 34(2)(b)(ii) of the Mannequin Regulation was thought of, because it permits for an award to be put aside upon contravention of the general public coverage of Singapore. Third, the SICC thought of whether or not Part 24(b) of Singapore’s Worldwide Arbitration Act, 1994 (“IAA”) was attracted, because it permits an award to be put aside on account of a breach of rules of pure justice that prejudices events’ rights.

The SICC additionally recalled authorized rules relevant to the events’ chosen arbitral process, i.e. the ICC Guidelines. For instance, Article 11 of the Guidelines supplies for the impartiality and independence of the arbitrators and in direction of all of the events concerned within the arbitration. Article 22 offers with the conduct of arbitration and casts duties upon the arbitral tribunal to, inter alia, conduct the arbitration in an expeditious method with due cognizance to the dispute’s complexity (Article 22(1)) and act pretty and impartially, listening to every get together’s case (Article 22(4)).

The SICC additionally referred to Part III of the ICC’s 2021 Word to Events and Arbitral Tribunals on the Conduct of the Arbitration (“the Word”), which offers with arbitrators’ impartiality and independence. Particularly, Paragraph 27 of the Word enunciates the requirement for arbitrators to contemplate related circumstances, together with in the event that they acted in a case involving one of many events or their associates, or acted as an arbitrator in a associated case.

Holding on Authorized Rules

First, the SICC clarified that the Tribunal’s software of the wrong lex arbitri to find out pursuits and prices was inadequate to put aside the Award. The Award referred to Sections 31(7) and 31A of the Indian Arbitration & Conciliation Act 1996, relatively than any reference to Singaporean regulation. But, the SICC famous that its doubt on the Tribunal’s independence of thought was induced not by its error of regulation (which is irrelevant to a setting apart software), however its reliance on the reasoning of the opposite awards.

Second, DJO contended that the Award must be put aside on account of non-compliance with the agreed arbitral process beneath Article 34(2)(a)(iv) of the Mannequin Regulation. It was contended that Article 32(2) of the ICC Guidelines present that the Tribunal ought to give the explanations for its determination in an award, and the Tribunal within the current case had not accomplished that by advantage of their copy-and-pasting. The SICC thought of it pointless to contemplate these submissions, because the argument in impact involved the Tribunal’s failure to independently and impartially think about the arguments within the Arbitration, which pertains to the sector of pure justice.

Third, the SICC thought of whether or not the rules of pure justice had been violated. It reiterated the intrinsic nature of such rules (together with the correct to a good listening to and the rule in opposition to bias) within the appointment of arbitrators beneath Articles 11 and 22 of the ICC Guidelines. Recalling a slew of judgments, it additionally acknowledged the excessive threshold and distinctive nature of software of rules of pure justice. DJO made 4 submissions on this regard. First, that the rule in opposition to bias precludes an arbitrator from pre-judging a case, and using information obtained from unrelated arbitration proceedings constitutes impermissible pre-judging. A obligatory antecedent query was whether or not the Tribunal utilized its thoughts to the problems in an unbiased, neutral and honest method? The Court docket referred to CNQ v. CNR, the place the Excessive Court docket acknowledged that the take a look at is whether or not an affordable observer, upon due consideration of the related info, suspects that the choice maker reached a conclusion even earlier than the events’ submissions. In DJO’s case, the take a look at of a hypothetical fair-minded, affordable individual inevitably yielded the apprehension of pre-judgement. The Award attributed submissions made in an earlier arbitration to the counsels within the current case, indubitably putting on the mantle of an neutral, unbiased thoughts. Thus, the Court docket inferred a really actual apprehension of bias, assembly the brink for violation of rules of pure justice. Second, DJO argued they’d not been granted a good listening to or a good, unbiased, and neutral determination. The SICC responded that when a tribunal attracts closely from submissions from a earlier case and fails to supply the events with a chance to handle them, a good listening to just isn’t granted. DJO’s third and fourth grounds involved the correct to a good listening to. As sub-sets of the second floor, the Court docket discovered no want to handle them individually.

In the end, it concluded that the Award was liable to be put aside because of the breach of pure justice. Nonetheless, it acknowledged that the mere truth of copying is inadequate to vitiate an arbitral award. Right here, it was put aside as a result of the copy was not with a view to cover the origin of the copied work however was merely to attenuate the work of the Tribunal in writing the award, which finally violated the rules of pure justice.

Fourth, DJO alleged the Award contravened the general public coverage of Singapore (Article 34(2)(b)(ii) of the Mannequin Regulation). The SICC acknowledged the distinctive nature of the general public coverage floor for setting apart arbitral awards, and the excessive threshold established by earlier jurisprudence. It acknowledged that because the discovering on the contravention of rules of pure justice might put aside the arbitral award, this is able to render a public coverage evaluation pointless. Nonetheless, the Court docket rejected the blanket assertion that every one types of plagiarism would basically be opposite to public coverage.

Implications

By contemplating the Mannequin Regulation and ICC Guidelines, the SICC’s judgment has the potential to form the interpretation of seat courts’ powers throughout the globe. On this regard, the judgment has a number of beneficial implications.

For example, the judgement crucially maintains the excessive threshold that has and should characterize the general public coverage floor of setting apart arbitral awards. Whereas most jurisdictions enable for arbitral awards to be put aside upon contravention of public coverage, an excessively broad scope of software might grant Courts a carte blanche to ignore foreign-seated arbitral awards unfavourable to a neighborhood get together. The reiteration of the distinctive nature of the general public coverage floor for setting apart arbitral awards is paramount on this regard.

Additional, the SICC clearly laid down which nature of copying is prohibited, relatively than universally disallowing it in any kind. It held {that a} diploma of dishonest intention and concealment is intrinsic to the phrase “plagiarism”, whereas within the case at hand, the copy-and-pasting was merely to minimise the Tribunal’s work, relatively than to hide work’s origin; the Tribunal could have thought of this to be match owing to the conspicuous similarity in authorized questions. It rightly famous that merely copying can not render an arbitral award liable to be put aside. Slightly, within the case at hand, the award was put aside as its anomalies that mirrored a violation of the rules of pure justice. This differentiation is especially related, since Courts worldwide usually reproduce paragraphs of judgements and scholarly work which recall the jurisprudence on a topic, albeit with due attribution to the sources. In any case, copy made in good religion, to expedite proceedings on an identical issues, ought to not be prohibited in all varieties. The SICC rightfully assessed the copy-and-pasting on its impacts on the events relatively than laying down a common rule.

The SICC additionally strengthened the precept of minimal curial intervention in arbitral awards. At one juncture, for instance, it acknowledged {that a} essential factual distinction throughout the arbitrations was the size of the delay between the Notification and the time when Consortium X raised the difficulty of adjustment in the principle Arbitration. DJO contended that the Tribunal’s failure to concentrate on this factual peculiarity itself undermined the Award’s validity. Nonetheless, the SICC deemed this declare pointless to rule upon, insofar as deciding it could entail reviewing the substantive deserves of the Tribunal’s findings, thereby exceeding the jurisdiction of a seat courtroom. The SICC’s restraint in not re-entering the substantive deserves of the dispute even whereas recognising an error relating to the identical demonstrates a stable dedication to upholding the finality of arbitral awards, bettering the knowledge and efficacy of this mode of dispute decision. By selecting to base its evaluation on the rules of pure justice as a substitute of the Tribunal’s software of the wrong lex arbitri or its discovering on info, the SICC has strengthened established rules relating to the restricted function of seat courts in an arbitral award. This has constructive implications for worldwide business arbitration, which advantages from get together autonomy and respecting personal arbitral tribunals’ findings whereas limiting deference to home judicial techniques.

That stated, the Court docket’s technique of clubbing sure points collectively could result in uncertainty relating to its precedential worth for different jurisdictions following the Mannequin Regulation.

First, the Court docket’s non-consideration of the alleged public coverage points of the breach of rules of pure justice has undesirable implications. It’s true that Part 24(b) of the IAA explicitly supplies pure justice as a floor to put aside an arbitral award, and thus there was no have to depend on every other provision to put aside the current Award. Nonetheless, this judgment is a missed alternative to acknowledge the nexus between the rules of pure justice and public coverage beneath the Mannequin Regulation itself. Though the general public coverage floor has a excessive threshold, the judgment’s superficial engagement with the brink by itself and the absence of delineating its scope makes its precedential worth for different Mannequin Regulation jurisdictions unclear. Extra prominently, by not discussing whether or not “public coverage” beneath the Mannequin Regulation encompasses pure justice, the bottom might be rendered an inoperable treatment.

Second, the Court docket’s refusal to contemplate DJO’s argument that the Award be put aside on account of non-compliance with the agreed-upon arbitral process means that there’s now little readability on whether or not copied arbitral awards violate the ICC Guidelines of Arbitration, particularly, Article 32(2). There may be additionally little readability on whether or not a tribunal copying and pasting parts of an award such would violate Article 34(2)(a)(iv) of the Mannequin Regulation, beneath which this argument was introduced. This has repercussions for non-Singaporean seated arbitrations that select to be ruled by the ICC Guidelines, in addition to different jurisdictions following the Mannequin Regulation.

It’s attention-grabbing to notice, nonetheless, that the SICC did cite the ICC Guidelines’ provisions on arbitrator bias and impartiality at first of its judgment (as aforementioned). This might imply that the SICC supposed to counsel copying parts of one other award violates the ICC Guidelines insofar because it displays a pre-existing prejudice on the arbitrators’ half. Nonetheless, within the absence of an specific discovering to the identical it’s troublesome to attract this implication, particularly contemplating {that a} violation of those Guidelines was not the explanation why the Award was finally put aside.

Conclusion

Whereas the SICC’s judgement does strengthen key tenets of the function of seat courts worldwide business arbitration, its full implications for different Mannequin Regulation jurisdictions stay unclear. As arbitration grows extra in style as a dispute decision mechanism for complicated transnational business disputes, excessive levels of similarity between ongoing arbitrations involving widespread arbitrators is to be anticipated, and copied arbitral awards will not be the one problem to face seat courts going ahead. That being stated, regardless of the seemingly egregious nature of copy within the case at hand, the SICC rigorously treaded the road between criticism of the Award and the danger of a blanket prohibition of copying parts of arbitral awards. Thus, from the observations on the powers of the seat courtroom, the rules of pure justice, and procedural impropriety, the SICC’s judgment is a landmark determination in navigating these challenges sooner or later.