Arbitration analysis: How absolute are a party’s right(s) to decide its representation in arbitration proceedings and the conduct of its case? Where an aggrieved party is of the view that its rights have been infringed, what is the effect of its silence on such during the arbitration on its ability to raise the infringement as a ground for setting aside the award?
CGS v CGT  SGHC 183
What are the practical implications of this case?
A party has the right to choose how and by whom it is represented in arbitration. Where the arbitration is conducted under the Singapore International Arbitration Center (SIAC) Rules, parties may choose to be represented by both legal counsel and non-legally qualified party representatives at the same time. However, the right to representation, like the right to be heard, is not unqualified and is subject to the standard of reasonableness.
A party which feels that its rights have been infringed is required to bring this to the tribunal’s attention in the course of the arbitration—otherwise, it may be precluded by virtue of its silence in the arbitration from relying on the same in a setting aside application. In any event, it is important for a party applying to set aside an award for breach of the parties’ agreed procedure to demonstrate that such a breach caused prejudice to said party.
In this decision, the court reiterated that it will not condone the abuse of the setting aside application in circumstances where a party who, with the benefit of hindsight, wished it had pleaded or presented its case in a different manner before the arbitrator. This is not the first case before the court in which the unsuccessful applicant had taken a diametrically opposite case from the one argued in the arbitration.
What was the background?
The application arose out of an expedited SIAC arbitration wherein the claimant who was the plaintiff in the court proceedings (the Plaintiff) sought to set aside the award on the grounds that (i) the procedure was not in accordance with the parties’ agreement, (ii) the Plaintiff was unable to present its case, and (iii) there was a breach of natural justice.
The Plaintiff’s complaints were as follows:
- as regards the Plaintiff’s right to choose its representative in arbitration proceedings
- first, the procedural order stipulating that ‘where a party is represented by Counsel, communications with the Tribunal shall be with counsel instead of the party’s representatives’ resulted in the Plaintiff’s party representative (R) being left out of certain email communications and therefore was in breach of the parties’ agreement as to arbitral procedure
- second, the degree (or lack thereof) of R’s participation in the arbitration was a breach of the parties’ agreement as to arbitral procedure and/or was in breach of natural justice
- finally, the tribunal failed to consider the Plaintiff’s final invoice claim such that there had been a breach of natural justice
What did the Singapore High Court decide?
The Singapore High Court dismissed the Plaintiff’s application to set aside the award.
Principles underlying a party’s right to representation in arbitration
In determining whether the way in which the Plaintiff was represented in the arbitration gave rise to grounds for setting aside the award, the Singapore High Court analysed the nature of a party’s right to representation in arbitration. In this regard, the Honourable Judicial Commission Andre Maniam observed that under rule 23.1 of SIAC Rules, a party may choose to be represented by both legal counsel and non-legally qualified party representatives at the same time.
However, the right to representation, while of fundamental significance, is neither absolute nor unqualified. As such, a tribunal’s decision to proceed with a hearing in the absence of a party’s first choice of counsel will not necessarily infringe on a party’s right to representation, nor will it necessarily amount to a breach of natural justice. Where a party alleges an infringement of its right to representation, the relevant question is whether it was unable to present its case.
Further, where the complaint concerned the tribunal’s conduct of proceedings in exercise of its case management powers, the overarching inquiry is whether the tribunal’s actions fell within the range of what a reasonable and fair-minded tribunal in those circumstances might have done. In this regard, the supervisory court will exercise its functions ‘with a light hand’ and will largely defer to the tribunal on procedural matters.
There was no breach of agreed procedure in (a) the correspondence between the Plaintiff and the tribunal and (b) the manner in which the tribunal handled the hearing
(a) correspondence between Plaintiff and tribunal
The Plaintiff’s complaint that the fact R was omitted from certain email communications between the tribunal and the parties (both before and after the engagement of a second legal counsel (T) for the hearing) amounted to a breach of the agreed procedure was rejected.
In this regard, the procedural order (issued prior to T’s appointment) provided that ‘[w]here a party is represented by Counsel, communications with the Tribunal shall be with Counsel instead of the Party’s representatives’ (PO1). The court noted that the Plaintiff did not take issue with PO1 when it was circulated in draft, nor did it apply to vary the applicable paragraph despite its right to do so under the same. Further, the Plaintiff made no protest when PO1 was issued, nor when R was subsequently omitted from some emails. The setting aside application was the first time the Plaintiff claimed that its rights had been infringed.
PO1 was also in line with the Plaintiff’s own Notice of Arbitration which stated that all communications for the arbitration were to be made to the Plaintiff’s counsel. Further, PO1 was a procedural order arising out of a case management conference and was not the parties’ agreed procedure for the arbitration—it was therefore not grounds for challenge under a setting aside application.
In the premises, the plaintiff’s right to representation was not infringed since it could be represented by whomsoever it pleased but the tribunal could reasonably direct the manner in which communications were passed between the tribunal and the parties. Further, there was no breach of natural justice since the Plaintiff was not prevented from being heard or from presenting its case.
The Plaintiff also sought to impugn the award on the basis that R was left out from a number of correspondences after T’s appointment. The court dismissed the Plaintiff’s allegations. Based on the contemporaneous documents, the Plaintiff had never communicated its
concerns that its right(s) of representation had been infringed at the relevant time, nor did the Plaintiff take the available steps to remedy the alleged infringement.
The learned judge emphasised and reiterated that if the Plaintiff considers that there had been a prejudicial and fatal failure in the arbitral process, it has to complain timeously and cannot simply press on with the hearing without bringing it to the tribunal’s attention and subsequently seek to rely on such alleged failure for purposes of a setting aside application.
(b) tribunal’s handling of the hearing
The Plaintiff argued that the tribunal’s ‘interruption’ of R’s presentation in its opening statement amounted to a breach of its procedural rights and/or ability to present its case. The court dismissed this argument upon reviewing the transcript of the proceedings. It considered that R had actually finished her presentation and that the tribunal had merely indicated what it had understood from R’s presentation as well as the areas which it wished R to address further. Further, allowing such a complaint to be a ground for setting aside would reduce tribunals to passive observers until the time for their decision, which is not how arbitration works.
The court underscored that the right to be heard is not unqualified. The test for determining whether a party was given a fair or reasonable opportunity to be heard hinges on determining what a reasonable and fair-minded arbitral tribunal in those circumstances might have done. On the facts, the court opined that a reasonable and fair-minded tribunal might have provided feedback on the Plaintiff’s presentation and the tribunal’s conduct was therefore unobjectionable. Crucially, the Plaintiff initial failure to object to the tribunal’s ‘intervention’ during the opening statement and subsequent inaction despite multiple opportunities to object thereafter was ‘fatal to the [Plaintiff’s] complaint’.
Second, the tribunal’s declination of R’s request to question a witness did not amount to a breach of agreed procedure or rules of natural justice, since the Plaintiff had represented to the tribunal, and had agreed to and decided that R’s role was solely to address the tribunal during the Plaintiff’s opening statement. Further, a reasonable and fair tribunal need not have engaged in an open discussion on R’s role and was entitled to rely on the Plaintiff’s earlier representation in that regard. The court also noted that the Plaintiff did not protest on this point either and there was no evidence that R’s questioning of the witness would be material and could reasonably had made a difference to the tribunal’s deliberations.
In the premises, there was no breach of procedure and the tribunal’s conduct fell within the range of what a reasonable and fair-minded tribunal in those circumstances would have done. The court acknowledged that it was not a legal requirement to show prejudice to the applicant, where the ground for setting aside an award was for a breach of agreed procedure. Nonetheless prejudice ‘remains a relevant consideration’ for breach of agreed procedure and is a legal requirement to demonstrate breach of natural justice.
The tribunal did not fail to deal with the Plaintiff’s invoice claim and thus there was no breach of natural justice
The Plaintiff argued, unsuccessfully, that the award failed to deal with a component of its claim which it had raised in the arbitration and thus the award should be set aside. Specifically, the Plaintiff alleged that the tribunal had failed to deal with its contention that it was entitled to be paid on the Final Request for Payment (FRP) Invoice because (i) the FRP had been issued, and (ii) the respondent had not contemporaneously disputed that invoice. In this regard, the court held that the mere fact an argument had been raised in the arbitration but was not dealt with in the award would not, per se, justify setting aside the award—an inference that the arbitrator had acted in breach of natural justice should not be drawn if the facts are also consistent with the arbitrator simply having misunderstood the aggrieved party’s case.
However, the more fundamental point was the Plaintiff’s failure to raise this FRP Invoice claim in the arbitration and that the Plaintiff’s own case and documents were in fact inconsistent with the FRP Invoice claim. In this regard, the court reiterated that the court should be way of any attempts by a party to repackage or re-characterise its original case. Further, the setting aside application is not to be abused by a party who, with the benefit of hindsight, wished he had pleaded or presented his case differently before the arbitrator.
Comments and conclusion
This case is instructive in that it clarifies the contours of a party’s right to representation in arbitration. Essentially, the right to representation, like the right to be heard, is not absolute in nature but is subject to the standard of reasonableness.
It is also another reminder that it is incumbent on a party who feels that its rights have been infringed to bring such infringement to the tribunal’s attention. A failure to protest at the relevant time will preclude the party from relying on the purported breach and/or infringement as a ground on which to set aside the arbitral award.
Lastly, this case underscores that the setting aside process is not to be (ab)used to provide an unsuccessful party with a second bite at the cherry.
- Court: Singapore High Court
- Judge: Andre Maniam JC
- Date of judgment: 14 September 2020
This article was first published on LexisPSL linked here.
This article is produced by our Singapore office, Bird & Bird ATMD LLP, and does not constitute legal advice. It is intended to provide general information only. Please contact our lawyers if you have any specific queries.