Singapore Court voids arbitration award over copying claims, ex-CJI named

The court realised that 212 out of 451 paragraphs of the award were taken directly from two earlier arbitration decisions where former CJI Justice Misra had also presided

The Court of Appeal of Singapore has decided to cancel an arbitration award given by former Chief Justice of India Dipak Misra. The Singapore Court passed this order after discovering that almost half of the award was copied word-for-word from earlier cases, reported the Bar and Bench.

 

According to the report, in its ruling, the court realised that 212 out of 451 paragraphs of the award were taken directly from two earlier arbitration decisions where Justice Misra had also presided. These earlier decisions involved different parties but similar legal issues.

 

A bench led by Chief Justice Sundaresh Menon and Justice Steven Chong said, “...the Parallel Awards were used as templates in drafting the Award to a very substantial degree. It is undisputed that at least 212 paragraphs from the Parallel Awards were retained in the 451-paragraph Award. This has several implications.”

 

 

Background of the dispute

 

The case involved a contract dispute between an Indian company who manages freight corridors and a group of three infrastructure firms. The conflict was over whether a 2017 Indian government order increasing minimum wages meant the companies should be paid more.

 

However, when talks failed between the parties, the matter went to arbitration in Singapore under the International Chamber of Commerce (ICC) Rules. The tribunal also included former Madhya Pradesh High Court judge Justice Krishn Kumar Lahoti, and former Jammu & Kashmir High Court Chief Justice Gita Mittal. They ruled in favour of the companies in November 2023.

 

Why the award was cancelled

 

According to the Bar and Bench, the Singapore International Commercial Court first cancelled the award, and the Court of Appeal has now agreed with that decision. It said that copying large parts of earlier awards without making changes to suit the new case was a breach of natural justice.

 

1. Apparent Bias

 

The Court said a reasonable person could feel the tribunal was not fair. It looked like the tribunal had already made up its mind based on past cases. It noted two specific mental biases:

 

- Anchoring bias: where earlier information affects later decisions.

 

- Confirmation bias: where people only look for information that confirms their beliefs.

 

The court said, “We are therefore amply satisfied that a fair-minded observer having formed these suspicions would have concluded that the integrity of the decision-making process had been compromised and agree with the Judge that the allegation of apparent bias has been made out.”

 

2. Use of unshared material

 

The tribunal used information from the past cases that the current parties didn’t know about and couldn’t respond to.

 

The court said, “Applying this to the present case, the patently substantial material derived from the Parallel Arbitrations were extraneous considerations that had not been raised to the parties’ attention… For these reasons, we again agree with the Judge that there had been a breach of the fair hearing rule.”

 

3. Unequal role of arbitrators

 

Only Justice Misra had knowledge of the past cases, meaning the two co-arbitrators were at a disadvantage. The Court said this made the decision-making process unfair. “The integrity of the Arbitration was therefore further compromised as a result,” it added.

 

Final observations of court

 

The court made it clear that it was not accusing the tribunal of bad faith, but that the process must be fair. “Rather, our decision rests on the importance of safeguarding the integrity and fairness of the arbitral process, which is the primary right accorded to those who opt to resolve their disputes through this means,” the court mentioned.