Singapore court sets aside another arbitral award by retired Indian judges for copy-paste

The Singapore International Commercial Court (SICC) recently set aside an arbitral award after finding that retired Indian judges serving as arbitrators breached the rules of natural justice by failing to independently consider the case before them.According to reliable sources, the arbitral tribunal was chaired by former Chief Justice of India Dipak Misra, with Justices R. Banumathi and Krishn Kumar Lahoti as co-arbitrators. Justice Banumathi is understood to have delivered a dissenting opinion..Judge Roger Giles determined that the tribunal majority - consisting of two retired Indian judicial officers identified only as Judge A and Judge C - had approached the arbitration with a "closed mind" by extensively reproducing reasoning from earlier related awards rather than conducting fresh analysis."I have no doubt that the observer would have a reasonable suspicion of bias in the form of prejudgment through the Majority coming to their decision with a closed mind," Judge Giles said..This comes close on the heels of a similar instance last month when the Court of Appeal of the Singapore Supreme Court set aside an arbitral award passed by a tribunal led by former Chief Justice of India (CJI) Dipak Misra. The Court had discovered that 47% of the contents of the award - 212 out of 451 paragraphs - were copied verbatim from two prior awards involving the same presiding arbitrator..Singapore Supreme Court sets aside 'copy-pasted' arbitral award passed by ex-CJI Dipak Misra panel.In the present case, the arbitration concerned a contract (CTP-11 contract) dated November 10, 2016 between an Indian government-owned special purpose vehicle (claimant) and a consortium of three companies (defendants) for the construction of a segment of the Dedicated Freight Corridor (DFC), India’s flagship freight railway network.Following a 2017 notification by India’s Ministry of Labour revising minimum wages, the defendants sought upward adjustment of the contract price, relying on clause 13.7 of the contract, which dealt with changes in law.The claimant rejected the claim, contending that the increase was already addressed by clause 13.8 (relating to price escalation) and was, in any case, time-barred under clause 20.1, which required notice within 28 days of the relevant event.After attempts at amicable resolution and reference to the Dispute Adjudication Board failed, the dispute was referred to ICC arbitration seated at Singapore.The tribunal was composed of three retired Indian judges — two nominated by the parties and a presiding arbitrator appointed jointly. The final award was delivered in June 2024 by a 2:1 majority..In its majority award, the tribunal held that the January 2017 notification qualified as a “change in law” under clause 13.7 and that the contractor was entitled to an upward adjustment of ₹80.29 crore (as opposed to the ₹92 crore claimed), along with 8% pre-award and 7.5% post-award interest, compounded monthly. It also directed the claimant to pay 80 percent of arbitration and legal costs.However, the dissenting arbitrator found the claim to be time-barred and unsupported by adequate evidence and would have awarded only ₹34.26 crore had the claim not been barred.The claimant approached the SICC alleging among other grounds, that the majority arbitrators:did not apply their mind to the specific facts and submissionsengaged in "cut-and-paste" reasoning from earlier awards in related but separate arbitrationrelied on authorities and contractual clauses not cited or present in the contract..According to the claimant’s submissions, 157 out of the 176 substantive paragraphs of the award were lifted either verbatim or with minor editorial changes from the previous award (CTP-13 award), which itself had borrowed extensively from even earlier awards. The copying included legal reasoning, contractual interpretations, citations of legal authorities not raised by either party and the application of contractual clauses and annexures not found in the CTP-11 contract.Notably, the tribunal cited an annexure and adjustment formula from the CTP-13 contract, which did not exist in the CTP-11 contract, and relied on consumer price indices that were relevant in other cases but not in this one.Moreover, the tribunal applied Indian law (instead of Singapore law) while awarding pre-and post-award interest and costs — an error directly traceable to the earlier awards and not corrected in the current arbitration..Judge Giles found compelling evidence that the majority had failed to apply their minds independently to the case."It is clear that in the Majority's reasoning and analyses, the CTP-13 Award was largely used as the basis for the Award, with some textual amendment but extensive reproduction of the substance of its paragraphs."The evidence of pre-judgment included several troubling instances including that the tribunal had "referred to and acted upon contractual provisions not found in the CTP-11 Contract, but reproduced from the CTP-13 Award." In addition, interpretations of contractual clauses "on a purposive construction as directory was not argued but was from the CTP-13 Award by reproduction.".The Court was particularly concerned with the fact that the majority had incorrectly applied Indian law to interest and costs when Singapore law should have governed these matters. These decisions had no basis in any submissions made to the tribunal but were taken almost verbatim from the CTP-13 Award, the judge concluded..Judge Giles emphasised that arbitrators must approach each case with an open mind, particularly when serving on multiple related arbitrations."While the tribunal does not sit with an empty mind, it must not sit with a mind closed by one arbitration to proper consideration of the evidence and arguments in the other arbitration...Having the same tribunal in related arbitrations does not give the tribunal license to carry over to one arbitration, without notice to the parties, the tribunal's reasoning in the other arbitration: rather, it requires the tribunal to be scrupulous in deciding on the evidence and arguments in each," the judge said..On the issue of prejudice to the claimant's rights, Judge Giles stated:"The breach itself creates the necessary prejudice, as an infringement of the party's right to due process which necessarily taints the arrival at the decision."The Court explicitly rejected arguments that the claimant should have challenged the arbitrators earlier or raised objections before the tribunal.In conclusion, the Court held,“The CTP-11 Award is set aside. The parties should endeavour to agree on costs (except the costs of SUM 12, which are dealt with separately). If agreement is not reached within 21 days, a joint letter to the Registry should set out the area(s) of disagreement and directions will be given for decision by the court..The claimants were represented by Koh Swee Yen SC, Pang Yi Ching Alessa, Chang Boon Ngee Laura, Teo Wei Kiat Samuel, Yeshvant Naidu and Divya Harchandani (WongPartnership LLP) for the claimant, along with Sameer Jain and Anu Sura from PSL Advocates & Solicitors. .The defendants were represented by Davinder Singh SC, David Fong and Suhas Malhotra (Davinder Singh Chambers LLC), along with Ashish Chugh, Tan Yi Wei Nicholas and Tan Jia Xin (Wong & Leow LLC).