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The Due Process Paranoia – The SGP’s Courts Effort in Reducing the Misuse of Due Process as Grounds to Set Aside Arbitral Awards

In the case of China Machine New Energy Corporation v Jaguar Energy Guatemala LLC and another [2020] SGCA 12, the Singapore Court of Appeal enunciated that a balance must be struck between genuine due process concerns and the arbitral Tribunal’s legitimate duty to ensure a prompt and efficient resolution of the dispute at hand.   After analysing various legal authorities from Singapore, England, New York and New Zealand, the following key principles are distilled by the Court:

1) While Article 18 of the UNCITRAL Model Law (“Model Law”) states that, “each party shall be given a full opportunity of presenting    his case”, the travaux preparatoires clearly show that the drafters of the Model Law were actually concerned with placing limits on the right to be heard, to prevent its abuse by unscrupulous parties seeking to delay proceedings by requesting extensions after extensions.

2) As such, that the parties’ right to be heard is impliedly limited by considerations of reasonableness and fairness.

3) Best rule of thumb to adopt is to treat the parties equally and allow them reasonable opportunities to present their cases as well as to respond.

4) The right of each party to be heard does not mean that the Tribunal must sacrifice all efficiency in order to accommodate unreasonable procedural demands by a party.

5) In determining whether there had been a breach of due process, the Court should ask itself whether what the Tribunal did (or decided not to do) falls within the range of what a reasonable and fair-minded Tribunal in those circumstances might have done. This inquiry is a fact-sensitive one.

6) The Tribunal’s conduct and decisions should only be assessed by reference to what was known to the Tribunal at the material time.

7) The alleged claim of breach of natural justice must have been brought to the attention of the Tribunal and the Court should accord a margin of deference to the Tribunal in its exercise of procedural discretion.

8) If a party intends to contend that there has been a fatal failure in the process of the arbitration, then there must be fair intimation to the Tribunal that the complaining party intends to take that point at the appropriate time if the Tribunal insists on proceeding.

Apart from guiding the Tribunals as to the sorts of concerns that may undermine their awards, the passing of this judgment aims to reduce the opportunity for counsel attempting to abuse the doctrine of due process.

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