Natural Justice and Jurisdiction Concerns Results in Set Aside in Singapore

In CBS v CBP [2021] SGCA 4, disputes arose between a Singapore-incorporated bank and an India-incorporated company over the agreed price in an agreement for the sale and purchase of coal.

During the arbitration, the buyer requested a hearing for witnesses to give evidence; the bank disagreed, arguing that the dispute turned on contractual interpretation which did not require oral evidence of witnesses.  The arbitrator ordered the buyer to submit its proposed witness statements so that he could decide if an oral hearing was warranted, but the buyer refused, insisting on calling witnesses without such a condition.  The arbitrator convened a hearing for oral submissions only – i.e. without any witnesses; the buyer withdrew from further participation in the arbitration.

The tribunal found in favour of the bank, following which the buyer applied to the Singapore High Court to set aside the award for breach of natural justice.  The High Court ruled in the buyer’s favour, and held that the company had not been given a “full opportunity” to present its case.   The bank appealed, but the Court of Appeal upheld the High Court decision, for two main reasons.

  1. The Singapore Chamber of Maritime Arbitration (SCMA Rules) did not give a tribunal the power to choose what type of hearing to hold in the absence of parties’ agreement.  Clause 28.1 stated: “Unless the parties have agreed on a documents-only arbitration or that no hearing should be held, the Tribunal shall hold a hearing for the presentation of evidence by witnesses, including expert witnesses, or for oral submissions”.  The Court of Appeal considered that this permitted only two situations where a hearing need not be held: (i) where parties have agreed to a documents-only arbitration without witness evidence; and (ii) where the parties agreed that no hearing would be held at all.  The Court of Appeal determined that the arbitrator was obliged to hold a hearing to receive oral evidence from witnesses where it was requested by a party and that the arbitrator had no power to decide to convene a hearing only for oral submissions.
  • The tribunal’s broad case management powers remain subject to fundamental rules of natural justice.  Accordingly, while tribunals have the power to limit the oral examination of witnesses, it was beyond “the range of what a reasonable and fair-minded tribunal in those circumstances might have done” to have denied the entirety of witness evidence, or imposed a condition on the buyer to show that its evidence had “substantive value” before deciding whether to allow an evidential hearing.  This constituted a breach of natural justice.

See the Court of Appeal’s case summary.

See also the following reviews of this case:

About Phillip Rompotis

Phillip practices as a barrister and arbitrator in Hong Kong. He has over 25 years’ litigation and arbitration experience in commercial disputes relating to construction & engineering, financial services, joint venture & shareholders agreements, technology, trusts, property and landlord & tenant. He is a Fellow of the Chartered Institute of Arbitrators, the Hong Kong Institute of Arbitrators, the Singapore Institute of Arbitrators, the Malaysian Institute of Arbitrators, and a member of various lists/panels of arbitrators.

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