The Court found that nearly half of the award—212 out of 451 paragraphs—was copied word-for-word from two earlier arbitration awards, raising serious concerns over fairness and impartiality in the arbitration process.
The Court of Appeal of the Supreme Court of Singapore set aside an arbitral award passed by a tribunal led by former Chief Justice of India, Dipak Misra.
The Court found that nearly half of the award—212 out of 451 paragraphs—was copied word-for-word from two earlier arbitration awards, raising serious concerns over fairness and impartiality in the arbitration process.
BRIEF FACTS:
The case arised from a disagreement between a special-purpose vehicle (SPV) managing freight corridors in India and a consortium of three companies involved in infrastructure development. The issue was whether a 2017 notification by the Indian government that increased minimum wages gave the consortium the right to claim extra payments under their contract.
As talks between the parties failed, the matter was taken to arbitration under the rules of the International Chamber of Commerce (ICC) in Singapore. The arbitral tribunal included:
- Former Chief Justice of India Dipak Misra (Presiding Arbitrator)
- Former Madhya Pradesh High Court Judge Justice Krishn Kumar Lahoti
- Former Jammu & Kashmir High Court Chief Justice Justice Gita Mittal
In November 2023, this tribunal ruled in favour of the consortium. However, the award was later challenged in the Singapore High Court due to allegations of excessive copying from earlier decisions where only Justice Misra had presided.
The Singapore International Commercial Court, which is a part of the High Court, ruled that the arbitral tribunal had violated the principles of natural justice. The main reasons included:
- No Independent Evaluation: The tribunal used material from older cases where parties had made different arguments. This means the award referred to arguments that were never presented in the current case.
- Wrong Legal Basis: The tribunal made legal mistakes by applying Indian arbitration law instead of Singaporean law and cited the wrong version of important contractual clauses.
- Apparent Bias: Since so much of the award was copied, it gave the impression that the tribunal did not look at this case afresh and instead relied heavily on past decisions.
The Court of Appeal, led by Chief Justice Sundaresh Menon and Justice Steven Chong, supported the High Court’s decision to cancel the award. They noted that copying so extensively from previous rulings without adjusting for differences in facts or arguments was unacceptable.
“…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.”
The Court explained that it is not automatically wrong for arbitrators to handle related disputes similarly. But in this case, the parties had no chance to comment on or respond to the copied material.
“That is simply not the case here, where not only was there no possibility of the parties addressing the points raised or conclusions reached in the separate proceedings, but portions from the Parallel Awards were reproduced in the Award, without even being adjusted for differences in the arguments made or in the terms of the applicable contracts.”
Key Breaches Identified by the Court
1. Apparent Bias
The Court said that a fair observer would believe the tribunal had already made up its mind based on the earlier awards, showing signs of prejudgment.
“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.”
The judges pointed out that two psychological biases were clearly seen:
- Anchoring Bias – Relying too much on the initial information (in this case, the previous awards).
- Confirmation Bias – Giving more value to information that supports a pre-existing belief or decision.
2. Reference to Extraneous Materials
The Court found that the tribunal had included content from previous arbitration cases which the parties involved in this case had no knowledge of or access to.
“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. That material formed such a pervasive part of the Award that it simply could not be overlooked. It was plain that it was neither contemplated nor agreed to by the parties that the Award could be prepared by such a process. For these reasons, we again agree with the Judge that there had been a breach of the fair hearing rule.”
3. Inequality Among Arbitrators
Only Justice Misra had knowledge of the earlier arbitrations, while the two co-arbitrators did not. This created an unfair imbalance.
“We also consider that the expectation of equality as between the Arbitrators was compromised. While, as we have noted, there is no evidence as to what actually transpired between the members of the Tribunal, it is known that the two co-arbitrators in this case were not privy to the Parallel Arbitrations. They would thus have had no direct access to any material or knowledge derived from those proceedings, but which appeared to have significantly influenced the outcome of the present Arbitration. The integrity of the Arbitration was therefore further compromised as a result.”
The Court clarified that its decision was not a personal attack on the tribunal members. It emphasised the need to protect the credibility and fairness of the arbitration process.
“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.”
