SICC Refuses to Set Aside Award on Basis of Relief Granted or Apparent Bias

In BYL and another v BYN [2020] SGHC(I) 06, the Singapore International Commercial Court dismissed an application to set aside an award, finding that the tribunal was justified in granting the cumulative relief that it did, and that there was no apparent bias on the part of an arbitrator who made a belated disclosure about being engaged as co-counsel with the defendant’s legal representative.

Background

The 2nd plaintiff (the Company) was set up by the 1st plaintiff (the Promoter) to construct and operate a development.  The defendant investor entered into an agreement with the Plaintiffs for the Investor to buy 35% of the Company’s shares.  Under cl.14 of the agreement, if the Promoter failed to undertake an IPO of the Company, the Promoter was obliged to buy the Investor’s shares in the Company at Fair Market Value and, under cl.17, upon other breaches of the Agreement, the Promoter was obliged to buy the Investor’s shares in the Company at a premium.  Under the Agreement, the rights of the parties under clauses 14 and 17 were “independent” and “cumulative”.

There were various delays to the development, causing the Plaintiffs to be in breach of the Agreement. The Investor commenced arbitration against the Plaintiffs before the ICC, seeking relief pursuant to clauses 14 and 17 of the Agreement “in tandem”.  The April 2019 Award directed the Promoter to pay the Investor cumulative relief under clauses 14 and 17.

In June 2019, the arbitrator nominated by the Plaintiffs disclosed that n March 2019, he acted for certain private companies before the Delhi High Court for the enforcement of an arbitral award.  The arbitration giving rise to this award (the India Arbitration) was unrelated to the ICC Arbitration, however, the law firm that represented the private companies in the India Arbitration also represented the Investor in the ICC Arbitration.

The Issues

The Plaintiffs applied to set aside the award on two grounds:

  • The reliefs granted by the tribunal were alternative in nature so that the tribunal had in effect failed to decide the dispute before it and improperly conferred upon itself the power to change the Award if the relief granted under cl 17 was later found to be unenforceable.
  • The belated and only partial disclosures of the arbitrator’s relationship with the law firm in the India Arbitration amounted to apparent bias on the part of the Arbitrator and vitiated the Award.

Decision

On the first ground, the Court found that the tribunal was justified in granting the Reliefs as it did, observing that the Award was not “contingent” in the sense of being an award in the alternative.

On the second ground, the Court found that the association between the Arbitrator and the Firm was insufficient to support a finding of apparent bias. The Arbitrator was not a partner within the Firm. While the Arbitrator met with some representatives of the Firm before the issuance of the Award, these representatives had no involvement with the ICC Arbitration. Similarly, the Arbitrator only met the Advocate to discuss matters relating to the India Arbitration after the Award had been issued.

Further, on the assumption that the Arbitrator’s disclosure had been belated, the Court was unable to infer that the disclosure eventually made was in some way insufficient so as to give rise to reasonable doubts about the Arbitrator’s impartiality.

The content for this Post was largely derived from the very helpful Case Summary produced by the Supreme Court of Singapore.

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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