The Court of Appeal of the Republic of Singapore has set aside an arbitral award in DJP and others v DJO [2025] SGCA(I) 2 on the ground that the award was rendered in breach of the rules of natural justice under Section 24(b) of the International Arbitration Act 1994 (2020 Rev Ed). The decision reaffirms the paramount importance of procedural fairness and impartial adjudication in international arbitration.*
Summary of Legal Issue and Outcome
The Court, comprising Chief Justice Sundaresh Menon, Justice of the Court of Appeal Steven Chong, and International Judge David Edmond Neuberger, dismissed the appellants’ challenge and upheld the High Court’s decision to set aside the arbitral award. The Court held that the award was tainted by apparent bias and a failure to afford the parties a fair hearing, principally due to the tribunal’s extensive reliance on prior unrelated arbitral awards involving similar issues but different parties.
The Court said:
40 A case such as the present, where an award is substantially copied from another source, may implicate either or both of the fundamental rules of natural justice. To get to the heart of the complaint, it will invariably be helpful to consider the source from which the material was copied as well as the surrounding circumstances. It will also be important for the party challenging the award to particularise its complaint by reference to the specific rule or rules of natural justice alleged to have been breached.
53 In our view, the impression that is conveyed to a reasonable observer of a judge or an arbitrator who copies from another source may often be similar, and as we have noted, this will often turn on the precise circumstances in which the copying is done. To this extent, case precedents involving how the courts have analysed these situations may provide helpful guidance. That being said, as we have also noted, the effect of setting aside a judgment and an award will typically differ
Background of the Case
The respondent, DJO, a special purpose vehicle managing Dedicated Freight Corridors in India, entered into the CPT-13 Contract with the appellants—DJP, DJQ, and DJR—for work related to its western corridors. In January 2017, the Indian Ministry of Labour and Employment issued a notification increasing minimum wages, prompting the appellants to later claim additional payment under Clause 13.7 of the contract, which allows adjustments due to changes in legislation.
The appellants lodged this claim in March 2020, nearly three years after the notification. DJO rejected the claim, leading the appellants to initiate arbitration proceedings in Singapore under ICC Rules in December 2021.
Arguments of the Parties
The appellants argued that the 2017 notification constituted a change in legislation and sought additional payment, interest, and costs. DJO resisted the claim on multiple grounds:
- The claim was time-barred under the Indian Limitation Act 1963.
- The appellants had waived the claim by not raising it in over 40 previous payment certificates.
- The appellants failed to comply with Clause 20.1 requiring notice and particulars within stipulated timeframes.
- On the merits, DJO denied that the notification amounted to a change in legislation under Clause 13.7.
The Tribunal’s Award and Related Arbitrations
The arbitral tribunal, chaired by former Chief Justice of India Dipak Misra, with two co-arbitrators nominated by the parties, ruled largely in favor of the appellants in an award dated 24 November 2023. However, the respondent had concurrently been involved in two other arbitrations (the CP-301 and CP-302 Arbitrations), each involving different claimants but overlapping subject matter.
In those proceedings, which were seated in New Delhi and conducted under different institutional rules, the same presiding arbitrator issued awards favorable to the claimants. Critically, it was undisputed that over 200 paragraphs of the 451-paragraph award in the present arbitration were copied verbatim or substantially from the CP-301 and CP-302 awards.
High Court’s Findings
The High Court set aside the award on the ground that it was rendered in breach of natural justice. It noted, among other things:
- The award included references to arguments and materials not raised in the arbitration.
- It cited incorrect contract clauses and applied the wrong procedural law.
- The copying was so extensive that a reasonable observer would apprehend that the arbitrator had a closed mind.
Court of Appeal’s Analysis
The Court of Appeal affirmed these findings, stating:
“A fair-minded and informed observer… would reasonably apprehend that the Award was prepared by a Tribunal that did not keep an open mind because it was impermissibly influenced by the Parallel Awards.” [at para 70]
The Court held that the arbitrator’s use of prior awards without proper engagement with the specific arguments and evidence in the current arbitration gave rise to:
- Apparent bias.
- Breach of the audi alteram partem rule, as the parties had no opportunity to address extraneous materials.
- A breakdown in the expectation of equality among arbitrators, as the co-arbitrators lacked access to the same extraneous knowledge the presiding arbitrator had from prior proceedings.
On the appellants’ argument that only parts of the award should be set aside, the Court concluded that the breach “permeated the whole Award,” making partial severance inappropriate.
Conclusion
The appeal was dismissed in its entirety. The Court emphasized that its decision was not based on any suggestion of bad faith but on the need to uphold the integrity of the arbitral process:
Parties were directed to submit written arguments on costs within three weeks of the judgment.
Case Details: [2025] SGCA(I) 2
Court of Appeal / Civil Appeal No 6 of 2024
