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International Arbitral Award made in breach of fair hearing rule set aside

In BZW and another v BZV [2022] SGCA 1, the Singapore Court of Appeal (“COA”) upheld the High Court’s decision to set aside part of the international arbitration award on the grounds that the Tribunal’s decision was manifestly incoherent.

We covered the facts of the case and the High Court’s decision in our previous update here

COA’s Decision

Essentially, the COA agreed with the High Court judge that the Tribunal was in breach of the rules of natural justice. It ought to abide by the fair hearing rule which requires a tribunal to pay attention to what is put before it and give its reasoned decision on the arguments and evidence presented.

In this case, it was held that the Tribunal has not understood or dealt with the case at all, which means that the parties have not been accorded a fair hearing. The COA opined that the Tribunal’s factual findings were often mere assertions rather than the result of examining documentary evidence and considering the credibility of witnesses. It also endorsed the High Court judge’s comments that it is “impossible on the face of the award to distinguish between those findings which form part of the tribunal’s chain of reasoning” on the appellant’s claims and “it is exceedingly difficult to map those findings to the essential issues arising from the parties’ cases on both claims.” The COA further held that there occurs a breach of the fair hearing principle because the Tribunal failed to apply its mind to the essential issues and adopted a chain of reasoning that had no nexus with the parties’ submissions.

Lastly, the COA found it inappropriate to remit the award to the Tribunal. In arriving to this decision, the COA opined that even a competent and respectable arbitral tribunal whose acts or omissions have been held to amount to serious irregularity causing substantial injustice, may subconsciously be tempted to achieve the same result as before.

Evidently, while the courts will be careful to interfere with a tribunal’s autonomy in coming to its own decision, the rights of the parties to a fair hearing remain paramount.

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