CUW v CUZ: Setting Aside Arbitration Award for Breach of Natural Justice
CUW, CUX, and CUY applied to the Singapore International Commercial Court to set aside an arbitration award against them in favor of CUZ. The dispute arose from agreements related to power plants in India. The claimants alleged breaches of natural justice by the arbitral tribunal. Vivian Ramsey IJ dismissed the application, finding no grounds to set aside the award.
1. Case Overview
1.1 Court
Singapore International Commercial Court1.2 Outcome
Application dismissed.
1.3 Case Type
Arbitration
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Application to set aside an arbitration award. The court dismissed the application, finding no breach of natural justice occurred.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| CUW | Claimant | Corporation | Application Dismissed | Lost | Nakul Dewan of Twenty Essex |
| CUX | Claimant | Corporation | Application Dismissed | Lost | Nakul Dewan of Twenty Essex |
| CUY | Claimant | Corporation | Application Dismissed | Lost | Nakul Dewan of Twenty Essex |
| CUZ | Respondent | Corporation | Application Dismissed | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vivian Ramsey | International Judge | Yes |
4. Counsels
4. Facts
- CUW, CUX, and CUY entered into agreements with CUZ concerning power plants in India.
- A Share Subscription Agreement (SSA) and a Shareholders’ Agreement (SHA) were executed.
- CUZ was to invest INR5.64b into the project in three tranches.
- CUZ made the First and Second Tranche Investments.
- Disputes arose over the terms of a Common Loan Agreement (CLA).
- CUZ objected to being classified as a “promoter” in the CLA.
- CUW sought to terminate the Agreements, alleging repudiatory breach by CUZ.
- CUZ commenced arbitration, alleging wrongful termination by CUW.
- CUZ alleged that the claimants had repudiated the Agreements and that the respondent accepted that repudiation and terminated the Agreements on 30 May 2016.
5. Formal Citations
- CUW and others v CUZ, Originating Application No 1 of 2022, [2023] SGHC(I) 2
6. Timeline
| Date | Event |
|---|---|
| CUX entered into a Term Sheet with CUZ. | |
| Share Subscription Agreement and Shareholders’ Agreement executed. | |
| First Tranche Investment made. | |
| Second Tranche Investment made. | |
| CUZ issued a letter alleging increased project cost and delayed operation date. | |
| CUZ issued a Material Adverse Change Notice. | |
| CUW issued a letter to terminate the Agreements. | |
| CUZ commenced Arbitration. | |
| Appointment of the arbitral tribunal completed. | |
| CUZ sent a written notice stating repudiation of the Agreements. | |
| Claimants filed an Application for Early Dismissal of Claims. | |
| Hearing on the Application for Early Dismissal of Claims. | |
| Partial Award deciding the Application for Early Dismissal of Claims issued. | |
| Final oral hearing. | |
| Award made. | |
| Claimants commenced proceedings in the High Court. | |
| Proceedings transferred to the Singapore International Commercial Court. | |
| Virtual case management conference. | |
| Virtual hearing took place. |
7. Legal Issues
- Breach of Natural Justice
- Outcome: The court found no breach of natural justice.
- Category: Procedural
- Sub-Issues:
- Failure to consider arguments
- Inconsistent rulings
- Wrongful Termination of Agreements
- Outcome: The Tribunal found that the claimants wrongfully terminated the Agreements.
- Category: Substantive
- Sub-Issues:
- Repudiatory breach
- Affirmation of contract
8. Remedies Sought
- Setting aside of arbitration award
9. Cause of Actions
- Breach of Contract
- Repudiation of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Energy
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | High Court | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the principles that a party challenging an arbitration award as having contravened the rules of natural justice has to establish certain elements and that the threshold for a finding of breach of natural justice is a high one. |
| BZV v BZW and another | High Court | Yes | [2022] 3 SLR 447 | Singapore | Cited for the principles applicable to setting aside an arbitral award, including minimal curial intervention, not being a pretext for appeal, and the standard for demonstrating a breach of natural justice. |
| BZW and another v BZV | Court of Appeal | Yes | [2022] 1 SLR 1080 | Singapore | Cited for the principle that a judge may need to examine the award, pleadings, submissions, and other documents to ascertain whether an important point was overlooked or addressed. |
| Glaziers Engineering Pte Ltd v WCS Engineering Construction Pte Ltd | Court of Appeal | Yes | [2018] 2 SLR 1311 | Singapore | Cited for the principle that the court would only infer that the decision-maker had wholly failed to consider an issue if the inference was clear and virtually inescapable. |
| Front Row Investment Holdings (Singapore) Pte Ltd v Daimler South East Asia Pte Ltd | High Court | Yes | [2010] SGHC 806 | Singapore | Cited for the principle that a court or tribunal will be in breach of natural justice if it disregarded the submissions and arguments made by the parties on the issues without considering the merits thereof. |
| AKN and another v ALC and others and other appeals | Court of Appeal | Yes | [2015] 3 SLR 488 | Singapore | Cited for the principle that a breach of natural justice only occurs if the arbitrator had regard to the submissions made by a party during the hearing but did not really try to understand them and so failed to deal with the matter substantively. |
| TMM Division Maritima SA de CV v Pacific Richfield Maine Pte Ltd | High Court | Yes | [2013] 4 SLR 972 | Singapore | Cited for the principle that the central inquiry is whether the award reflects the fact that the arbitral tribunal had applied its mind to the critical issues and arguments. |
| AQU v AQV | High Court | Yes | [2015] SGHC 269 | Singapore | Cited for the principle that courts should not undertake a review of the substantive merits of the underlying dispute between the parties. |
| SEF Construction Pte Ltd v Skoy Connected Pte Ltd | High Court | Yes | [2010] 1 SLR 733 | Singapore | Cited for the principle that the fact that the tribunal did not feel it necessary to discuss its reasoning and explicitly state its conclusions does not necessarily mean that the tribunal did not have regard to those submissions at all. |
| BLC and others v BLB and another | High Court | Yes | [2014] 4 SLR 79 | Singapore | Cited for the principle that there is no right of recourse to the courts to set aside the arbitral award if an arbitrator has simply made an error of law and/or fact. |
| L W Infrastructure Pte Ltd v Lim Chin San Contractors Pte Ltd and another appeal | Court of Appeal | Yes | [2013] 1 SLR 125 | Singapore | Cited for the principle that the breach of natural justice cannot merely be technical or inconsequential. |
| CDM and another v CDP | Court of Appeal | Yes | [2021] 2 SLR 235 | Singapore | Cited for the principle that in determining whether a matter was within the scope of parties’ submission to arbitration, this must be answered by reference to five sources. |
| Bumi Armada Offshore Holdings Ltd and another v Tozzi Srl (formerly known as Tozzi Industries SpA) | Court of Appeal | Yes | [2019] 1 SLR 10 | Singapore | Cited for the principle regarding burden of proof. |
| PT Perusahaan Gas Negara (Persero) TBK v CRW Joint Operation | Court of Appeal | Yes | [2015] 4 SLR 364 | Singapore | Cited for the principle that partial and interim awards are final and binding. |
| Indian Farmers Fertilizer Cooperative Limited v Bhadra Products | Supreme Court | Yes | [2018] 2 SCC 534 | India | Cited for the principle that a finding made in a partial award is final and cannot be re-adjudicated, unless it is first set aside. |
| Union of India v. Kesar Singh | Jammu & Kashmir High Court | Yes | AIR 1978 J&K 102 | India | Cited for the principle that once an innocent party elects to affirm a contract, it cannot then seek to repudiate it. |
| Sham Lal vs Gurbachan Singh | Lahore High Court | Yes | [1929] SCC OnLine Lah 622 | India | Cited for the principle that parties can agree that joint and several liability would not apply despite having made a joint promise in the underlying agreement. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act 1994 | Singapore |
| UNCITRAL Model Law on International Commercial Arbitration | N/A |
| Indian Contract Act 1872 (Act No 9 of 1872) | India |
| Specific Relief Act 1963 | India |
| Evidence Act (Cap 97, 1997 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration
- Natural Justice
- Setting Aside
- Share Subscription Agreement
- Shareholders’ Agreement
- Common Loan Agreement
- Material Adverse Change
- Repudiatory Breach
- Affirmation
- Promoter
- EPC Contractor
15.2 Keywords
- arbitration
- setting aside
- natural justice
- singapore
- commercial
- international
17. Areas of Law
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure