CZT v CZU

• Jurisdiction: Singapore
• Judge: Chua Lee Ming J
• Judgment Date: 28 June 2023
• Neutral Citation: [2023] SGHC(I) 11
• Court: International Commercial Court (Singapore)
• Docket Number: Originating Summons No 1 of 2023 (Summonses Nos 788, 789 and 790 of 2023)
• Hearing Date: 31 May 2023
• Citation: [2023] SGHC(I) 11
• Year: 2023
• Plaintiff Counsel: Nair Suresh Sukumaran, Tan Tse Hsien, Bryan (Chen Shixian) and Joel Wang Pinwen (PK Wong & Nair LLC)
• Defendant Counsel: Koh Swee Yen SC, Claire Lim, Pang Yi Ching, Alessa and Teo Wei Kiat Samuel (WongPartnership LLP),Toby Thomas Landau KC (instructed) (Toby Landau), Tham Lijing and Lim Qiu Yi, Regina (Tham Lijing LLC)
• Subject Matter: Civil Procedure,Production of documents (SICC),Objections,Arbitration,Confidentiality,Confidentiality of records of deliberations
• Published date: 28 June 2023

Chua Lee Ming J (delivering the judgment of the court): Introduction

In arbitration proceedings commenced by the defendant against the plaintiff, the arbitral tribunal, by a majority, issued an award against the plaintiff. The minority issued a dissenting opinion in which he made several serious allegations against the majority.

The plaintiff has applied to set aside the arbitral award. The three summonses before us are applications by the plaintiff for orders that the three members of the arbitration tribunal produce their records of deliberations.

We dismiss the plaintiff’s applications for the reasons set out below.

Background facts

The plaintiff entered into a contract with the defendant (the “Contract”) under which the plaintiff contracted to deliver certain component packages that included materials, machinery and equipment (the “Material Packages”) as well as other documentation, designs and services.¹ A third party to be appointed by the defendant (the “Contractor”) was to use the Material Packages to construct certain products for the defendant.

Subsequently, the defendant appointed the Contractor. The plaintiff, the defendant and the Contractor then entered into an agreement for the transfer of the defendant’s rights and obligations under the Contract to the Contractor, except for certain rights and obligations identified in an attachment to the agreement (the “Transfer Agreement”).² The plaintiff also entered into an agreement with the Contractor for the supply of the Material Packages to the Contractor.³

The defendant alleged that it subsequently discovered that certain components of the Material Packages were defective. The defendant filed an action in its home jurisdiction against the Contractor and the plaintiff. The court found the Contractor liable for 30% of the damages suffered by the defendant. The claim against the plaintiff was dismissed due to lack of jurisdiction because of an arbitration agreement in the Contract.

The arbitration agreement in the Contract provided for disputes to be settled by arbitration in Singapore by three arbitrators in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce (“ICC”).

On 25 April 2019, the defendant commenced arbitration proceedings against the plaintiff.⁴ In due course, the arbitration tribunal (the “Tribunal”) was constituted, comprising Professor Douglas Jones AO (“Prof Jones”), Professor Keechang Kim (“Prof Kim”) and Dr Philipp Habegger (“Dr Habegger”). Prof Kim was the defendant’s nominee while Dr Habegger was the plaintiff’s nominee. Prof Jones was appointed by the International Court of Arbitration of the ICC (“ICC Court”) as President of the Tribunal pursuant to Article 12(2) of the ICC Rules of Arbitration 2017 (the “ICC Rules”). The ICC Court is called a court only in name; it administers arbitrations under the ICC Rules and does not make formal judgments on disputed matters.

In brief, the defendant claimed against the plaintiff for damages suffered by the defendant as a result of the plaintiff’s failure to perform its obligations, including its obligation to deliver the Material Packages free from any defect. The defendant asserted that, notwithstanding the Transfer Agreement, it retained certain important protections under the Contract that allowed it to make relevant claims directly against the plaintiff. The defendant also maintained that it had made its claim before the warranty period under the Contract expired.

The plaintiff asserted that it was not liable because, among other reasons, (a) the warranty period under the Contract had expired, and (b) as a result of the Transfer Agreement, there was no relevant obligation on which the defendant could base its claims.

On 24 March 2021, the majority (the “Majority”) submitted a draft award to the ICC Court,⁵ pursuant to Art 34 of the ICC Rules. Art 34 states as follows:

ARTICLE 34

Scrutiny of the Award by the Court

Before signing any award, the arbitral tribunal shall submit it in draft form to the Court. The Court may lay down modifications as to the form of the award and, without affecting the arbitral tribunal’s liberty of decision, may also draw its attention to points of substance. No award shall be rendered by the arbitral tribunal until it has been approved by the Court as to its form.

The scrutiny process under the ICC Rules serves to maximise the legal effectiveness of an award and to improve the award’s general accuracy, quality and persuasiveness.⁶

The ICC Court scrutinised the draft award on 29 April 2021 and decided to further scrutinise it at one of its next sessions. On 28 May 2021, the Secretariat informed the parties’ lawyers that the ICC Court approved the revised draft award on 27 May 2021 (the “May Award”) and that it would notify the award to the parties once it had been finalised and signed.⁷

However, the May Award was not notified to the parties. Instead, in an email dated 9 July 2021, the Deputy Counsel to the ICC Court informed the parties’ lawyers that the Secretariat had received the draft award from the Tribunal implementing the ICC Court’s comments “made in the most recent scrutiny process on 28 June 2021” and that “[i]n consultation with the arbitral tribunal the Secretariat will invite the Court to further scrutinize the draft award at one of its next sessions”.⁸

On 16 September 2021, the Deputy Counsel informed the parties’ lawyers that the ICC Court approved the draft award at its session on 23 July 2021.⁹

On 20 September 2021, the ICC sent the final award (the “Final Award”)¹⁰ to the parties.¹¹ The Final Award was signed by the Majority comprising Prof Jones and Prof Kim. The Majority found the plaintiff liable to the defendant for non-performance of its obligation to deliver the Material Packages, due to its delivery of a defective Material Package and ordered the plaintiff to pay the defendant damages, interests and costs.

Dr Habegger (the “Minority”) did not sign the Final Award. The Final Award stated that he “declined to do so in the light of his disagreement with the conclusions and reasoning of the other two arbitrators”.

On the same day (20 September 2021), the Minority sent a copy of his dissenting opinion (the “Dissent”)¹² to the parties’ lawyers.¹³ The Dissent dealt with Part Q1 of the Final Award. Part Q1 of the Final Award dealt with the defendant’s entitlement to claim against the plaintiff for the plaintiff’s incomplete performance of its obligation to deliver the Material Packages under the Contract. The Minority found the plaintiff not liable (para 247 of the Dissent).

In the Dissent (at para 248), the Minority acknowledged that he had expressed his views “with force”. Indeed, he had, and the phrase “with force” might even be said to be an understatement. In addition to setting out the reasons why he disagreed with the Majority’s decision, the Minority also accused the Majority of having “engaged in serious procedural misconduct”, “continued misstating of the record”, attempting “to conceal the true ratio decidendi from the Parties”, “distortion of the deliberation history”, lack of impartiality, and knowingly stating an incorrect reason for the Minority’s refusal to sign the Final Award (at paras 245, 248, 250 and 251 of the Dissent). The Minority’s concluding words were that he had “lost any and all trust in the impartiality of [his] fellow arbitrators” (at para 251 of the Dissent). The plaintiff views the Dissent as the smoking gun in these proceedings.

On 17 December 2021, the plaintiff filed an originating summons in the General Division of the High Court, in which it seeks to set aside the Final Award (the “Setting Aside Application”) pursuant to: section 24(b) of the International Arbitration Act 1994 (2020 Rev Ed) (“IAA”) and/or Art 34(2)(a)(ii) of the Model Law (ie, the Majority acted in breach of natural justice); further or in the alternative, Art 34(2)(a)(iii) of the Model Law (ie, the Majority exceeded the terms or scope of the submission to arbitration); further or in the alternative, Art 34(2)(a)(iv) of the Model Law (ie, the arbitral procedure was not in accordance with the agreement of the parties); and further or in the alternative, Art 34(2)(b)(ii) of the Model Law (ie, the award is in conflict with the public policy of Singapore).

On 18 October 2021, the plaintiff’s counsel wrote to the ICC Secretariat and the members of the Tribunal, requesting (among other things) preservation of the full arbitration record and the full record of all deliberations.¹⁴ The Minority confirmed that he will preserve the records to the extent his professional duties so require.¹⁵ Prof Jones confirmed that he will preserve the records in so far as they exist and without accepting that any of the documents can be disclosed.¹⁶ Prof Kim declined to respond to the request regarding the preservation of records, taking the view that there was no ground for the request.¹⁷

In an email dated 25 October 2021, the plaintiff’s counsel further queried the Tribunal and the Secretariat as to whether they would be willing to disclose their records of deliberations.¹⁸ In response: Prof Kim replied to say that he had no further comments.¹⁹ The ICC noted that the work of the ICC Court is of a confidential nature and that the Secretariat would not disclose any documents of a confidential nature without being ordered to do so by a final decision of the competent court in Paris.²⁰ Prof Jones replied that the record of deliberations is confidential and could only be disclosed if so ordered by a competent court.²¹ Dr Habegger said that he was only willing to disclose the record of deliberations under a court order or similar order.²²

On 21 March 2023, the plaintiff filed Summonses Nos 788 of 2023, 789 of 2023 and 790 of 2023 in which it seeks production of the records of deliberations from Prof Kim, Dr...