In CZT v CZU, 2023 SGHCI 11, the Singapore International Commercial Court refused to order the arbitral tribunal to disclose deliberation-related documents in the context of a set-aside application under Article 34 of the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”) despite the dissenting arbitrator’s statement that he had “lost any and all trust in the impartiality of [his] fellow arbitrators.” The applicant relied upon Article 34(2), alleging that the majority had breached the rules of natural justice, had exceeded the terms or scope of the submission to arbitration, that the arbitral procedure was not in accordance with the parties’ agreement, and that the award conflicted with Singapore public policy. For the reasons set out below, this case has relevance to Canadian international arbitration practice.
The Court found that there was no compelling reason to suggest that the interests of justice in ordering production of the documents would outweigh the strong policy reasons in favour of protecting the confidentiality of deliberations.
The underlying dispute – The dispute was an international arbitration under the ICC Arbitration Rules seated in Singapore, and therefore governed by the Model Law as enacted in Singapore. The award underwent three rounds of scrutiny by the ICC Court of Arbitration before being issued to the parties.
In a scathing dissent, the arbitrator appointed by CZT, the unsuccessful party, raised a slew of grievances with the award and the manner in which deliberations had been conducted. He accused the majority of having “engaged in procedural misconduct”, of “continued misstating of the record”, of attempting “to conceal the true ratio decidendi from the Parties”, of “distortion of the deliberation history”, of lack of impartiality and of knowingly stating an incorrect reason for his refusal to sign the final award. He concluded with the statement cited above, that he had “lost any and all trust in the impartiality of [his] fellow arbitrators.”
CZT applied to the Court under Article 34(2)(a)(ii), (iii) and (iv), and 34(2)(b)(ii), of the Model Law for an order setting aside the award. Based on the statements in the dissent, CZT alleged that the majority had breached the rules of natural justice, that it had exceeded the terms or scope of the submission to arbitration, that the arbitral procedure was not in accordance with the parties’ agreement, and that the award conflicted with Singapore public policy.
The production applications – CZT sought orders from the Court that each of the arbitrators produce the documentary evidence within the arbitral tribunal’s records of deliberations referenced in various paragraphs of the dissent.
This request was made pursuant to the Singapore Rules of Court applicable to the set-aside application. Those rules give the Court the power to order production of relevant and material documents. The party resisting production bears the burden of showing that an exception to disclosure applies, which may include “legal impediment or privilege” and “grounds of commercial or technical confidentiality that the Court determines to be compelling”, among other grounds.
The policy reasons in favour of keeping deliberations confidential – The Court began its analysis by confirming that the confidentiality of arbitrators’ records of deliberations is an “implied obligation in law” that is well established in Singapore case law and commentary, although it is not enacted in any statutory provision. The Court agreed with the submissions made on behalf of the presiding arbitrator that there are “well-recognised policy reasons for the protection of confidentiality of arbitrators’ deliberations”, including that:
(a) “Confidentiality is a necessary pre-requisite for frank discussion between the arbitrators”;
(b) “Freedom from outside scrutiny enables the arbitrators to reflect on the evidence without restriction, to draw conclusions untrammeled by subsequent disclosure of their thought processes, and, where they are so inclined, to change their conclusions on further reflection without fear of subsequent criticism or of the need for subsequent explanation” (citing on this point the decision of Justice Lax of the Ontario Court (Gen. Div.) in Noble China Inc. v Lei (1998), 42 OR (3d) 69, 1998 CanLII 14708)”;
(c) “The duty on the tribunal to keep deliberations confidential protects the tribunal from outside influence”; and
(d) “The rule helps to minimise spurious annulment or enforcement challenges based on matters raised in deliberations or differences between the deliberations and the final award and is thereby critical to the integrity of the whole arbitral process”.
Exceptions to the confidentiality of deliberations – The Court further agreed with the submissions made on behalf of the presiding arbitrator that the confidentiality of deliberations does not apply to process-related issues (which might arise, for example, where an arbitrator was excluded from deliberations entirely).
It found that the exceptions to confidentiality “are only to be found in the rarest of cases”, where “the facts and circumstances of the case […] are so compelling as to persuade the court that the interests of justice in ordering production of the records of deliberations outweigh the policy reasons for the protection of the confidentiality of deliberations.” The party seeking production must also show that its allegations have a real prospect of succeeding.
The Court cited allegations of corruption as an example of conduct that would be sufficiently serious to outweigh the policy reasons in favour of protecting the confidentiality of deliberations.
Exception not made out on the facts – The Court found that none of the dissenting arbitrator’s allegations was sufficient to displace the protection of the confidentiality of deliberations. Recognizing that the allegation of lack of impartiality “could constitute an exception because impartiality is fundamental to the integrity of the arbitral proceedings”, the Court nevertheless found that the allegations were bare and therefore had no real prospect of succeeding.
Contributor’s Notes:
Why should Canadian international arbitration practitioners care about what Singapore courts have to say about the confidentiality of deliberations (often referred to in Canada as “deliberative secrecy”?)
First, I wanted to write about this case because, as practitioners in a Model Law-jurisdiction, we must constantly keep abreast of case law developments in other Model Law jurisdictions and the courts of other major arbitral seats. Recall that Article 2A(1) of the Model Law provides that, “[i]n the interpretation of this Law, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith.”
In its recent decision in The Russian Federation v Luxtona Limited, 2023 ONCA 393, the Ontario Court of Appeal held that this provision promulgates a “uniformity principle” that “makes international decisions strongly persuasive in Ontario” and that the “very nature of international arbitration makes it highly desirable that Ontario’s regime should be coherent with those of other countries, especially (but not exclusively) those that have also applied the Model Law.” The Court of Appeal relied on three Singapore decisions in that case – Ontario – Courts must decide arbitral jurisdiction de novo – #748 – Arbitration Matters).
Based on this, I think it’s fair to say that when the Singapore International Commercial Court finds an “implied obligation in law” to protect the confidentiality of deliberations, this is relevant to Canadian international arbitration practitioners. The fact that this Court includes international judges may make its decisions particularly persuasive to Canadian courts – notably, the Court’s international judge roster includes former Chief Justice of the Supreme Court of Canada Beverley McLachlin PC. This particular case was heard by a three-judge panel comprised of Justice Chua Lee Ming of the Singapore High Court, Justice Sir Jeremy Cooke, formerly of the Commercial Court of the England and Wales High Court, and Justice Dominique Hascher of the French Cour de cassation (the Supreme Court of France). To give effect to the “uniformity principle” in Article 2A of the Model Law, being aware of and relying on this case law, as appropriate, is critical.
Second, the case is also relevant in light of recent Canadian decisions concerning the admissibility of evidence on a set-aside application that goes beyond the record before the tribunal. (See, for example, The Russian Federation v Luxtona, above, and Vento Motorcycles, Inc. v The United Mexican States, 2021 ONSC 7913, Case Note No. 572 – Ontario – Fresh evidence test the same on set-aside applications on fairness grounds and judicial review applications).
Third, while there is extensive Canadian case law about deliberative secrecy in the administrative law context, there is no recent case of which I am aware in which a party sought to adduce (or sought production of) documents evidencing tribunal deliberations in an application under the Model Law. Noble China v Lei – Justice Lax’s decision which the Singapore court cited – is from 1998. In that case, Justice Lax struck an affidavit from the dissenting arbitrator which alleged that the majority was biased. She held that the rule on deliberative secrecy “must apply with equal or greater force” in the context of private consensual decision-making. However, there is no discussion in that case of any principled exceptions to deliberative secrecy. CZT v CZU could therefore help provide clarity on the circumstances under which a party seeking to set aside (or resist enforcement of) an international arbitral award might successfully obtain an order requiring that deliberation-related documents be produced. The potential procedural basis for such an order is a question for another day and another article!