Key takeaways

• Where a party raises an issue as part of a wider claim rather than as a standalone claim ("Subsidiary Issue"), it would suffice from a natural justice perspective for the tribunal to resolve the larger questions under which the Subsidiary Issue was raised, as the tribunal would have in effect determined the Subsidiary Issue. There is no necessity to deal with the issue expressly, specifically or in great detail.
• A setting-aside applicant cannot attempt to create evidence or circumstances to portray an arbitral tribunal as being incapable of viewing the matter objectively should the dispute be remitted to it by the court.

Background

CYE is a company incorporated under the laws of Singapore, engaged in the business of energy trading and the wholesale distribution of petroleum and petroleum products. CYF is also a company incorporated under the laws of Singapore, engaged in the business of commercial storage of petroleum and petroleum products.

CYE and CYF entered into an agreement for CYF to provide CYE with storage and terminal facilities and services at its terminal ("Storage Agreement").

Subsequently, CYE commenced arbitration proceedings against CYF under the Storage Agreement ("Arbitration"). In the Arbitration, CYE made various claims against CYF, including pertinently that CYF breached the Storage Agreement and conspired by unlawful means with company A to defraud CYE.

In support of its claims in the Arbitration, CYE argued that a term should be implied in the Storage Agreement to the effect that CYF would inform CYE if, at the commencement of the Storage Agreement, the storage tanks contained a product either belonging to other customers, or that CYF did not know the ownership of, or where CYF had not been informed that the product belongs to CYE ("Implied Term").

The Tribunal dismissed all of CYE's claims in the Arbitration. Dissatisfied with the outcome, CYE commenced proceedings in the general division of the high court to set aside the arbitration award ("Award"). Among various other grounds, CYE argued that the Award should be set aside because the Tribunal breached natural justice by failing to consider CYE's claim that CYF breached the Implied Term.

CYE also submitted that, if any grounds for setting aside were made out, the matter should not be remitted to the Tribunal because (among other things) the Tribunal had a "predisposition" against CYE and, specifically, there was reasonable cause for concern that the Tribunal may hold it against CYE for having asked the Tribunal to clarify certain entries in the Tribunal's CV.

Decision of the general division of the high court

Justice S Mohan ("Mohan J") dismissed CYE's application in its entirety, with costs to be paid to CYF.

An arbitrator need not expressly deal with every subsidiary issue raised by a party — it is sufficient for the arbitrator to resolve the larger questions under which the subsidiary issue is pleaded or argued

On the argument that the tribunal breached natural justice by failing to consider CYE's claim that CYF breached the Implied Term, Mohan J held that the Tribunal did in fact determine and address the parties' arguments on the Implied Term.

In this regard, Mohan J observed that it was "plainly apparent from the arbitral record" that CYE did not plead or argue the alleged breach of the Implied Term as a standalone breach of contract claim. Starting with the pleadings, CYE pleaded the breach of the Implied Term (i) in the part of its statement of claim that dealt with a breach of an express term of the Storage Agreement ("Failure to Allocate Allegation") and (ii) as one of the unlawful acts committed by CYF and company A with the intention of injuring CYE. Hence, the breach of the Implied Term was not pleaded as a standalone breach of contract, but in support of (i) the Failure to Allocate Allegation and (ii) the conspiracy claim.

This conclusion was fortified by CYE's treatment of the Implied Term argument subsequent to the pleadings. In CYE's oral opening submissions, the breach of the Implied Term was only raised in response to the Tribunal's questions on the Failure to Allocate Allegation. In CYE's written and oral closing submissions, the breach of the Implied Term was only raised as part of its conspiracy claim. There was no separate section in CYE's closing submissions on the Implied Term.

While CYE included a prayer for relief, seeking damages for loss of chance for breach of the Implied Term, this related to the remedies sought by CYE and did not detail its cause of action. In other words, if CYE were successful in its claim for breach of contract and/or conspiracy and there was a breach of the Implied Term as analysed under those two claims, CYE would simply have an alternative head of damages for loss of chance.

Accordingly, Mohan J observed that, if the Tribunal had resolved and found against CYE on the larger questions under which the Implied Term was raised, the Tribunal would have in effect also determined the arguments raised by the parties concerning the Implied Term, even if it did not deal with the Implied Term expressly, specifically or in great detail.

On the facts, Mohan J held that the Tribunal had indeed addressed and determined the two larger questions under which arguments on the Implied Term were raised. First, the Tribunal dealt with and dismissed the Failure to Allocate Allegation, finding that there was no such obligation under the terms of the Storage Agreement. Second, the Tribunal found that CYE had not made out the first and second elements of the tort of conspiracy, and therefore the issue of unlawfulness of the acts did not arise. This meant that the Tribunal had at the very least implicitly also addressed what needed to be addressed in relation to the parties' arguments on the Implied Term. Alternatively, the Tribunal could have also found it unnecessary to deal with the Implied Term given that it found against CYE on the two larger questions.

In the premises, Mohan J concluded that CYE's case that the Tribunal breached natural justice by failing to consider its claim that CYF breached the Implied Term could not succeed.

Court will not look fondly on parties that attempt to create circumstances to portray the tribunal as biased to prevent remission

As Mohan J dismissed all of CYE's grounds for setting aside the Award, the question of whether the Award should be remitted to the Tribunal was moot. Nonetheless, Mohan J felt "compelled" to make some remarks on CYE's case on remission.

Mohan J observed that, if CYE had any concerns over the Tribunal's impartiality, it should have perused the Tribunal's CV at the time the tribunal had been constituted and not only after the Award was released. CYE's decision to raise questions relating to the Tribunal's CV after the Award was released could be construed as an attempt by CYE to self-induce an impression that the Tribunal would "hold it against" CYE for having raised doubts over the Tribunal's impartiality and professionalism.

Mohan J further noted that CYE did not seek to set aside the Award on grounds of bias despite serious allegations that the Tribunal was predisposed against CYE and that the Tribunal had a "strong leaning" in favour of CYF. This raised questions as to CYE's real motive in seeking the Tribunal's clarification, post-Award, on whether the Tribunal was in a position of conflict of interest.

Mohan J concluded by stating that the court would not look fondly on applicants that attempt, post-award, to create evidence or circumstances to portray an arbitral tribunal as being incapable of viewing the matter objectively should the dispute be remitted to it. Mohan J observed that, if parties can prevent remission simply by being antagonistic toward a tribunal after it has rendered the award and questioning the tribunal's impartiality without any real suggestion of bias, that would make a mockery of the process of arbitration and the process of seeking recourse from the court against an arbitral award.

Conclusion

The court's decision in CYE v. CYF underscores the thorough and pragmatic approach taken by the Singapore courts to applications for setting aside an arbitral award. It also reiterates the court's adherence to the principle of minimal curial intervention, as underscored by the Singapore Court of Appeal in Republic of India v. Vedanta Resources plc [2021] SGCA 50. Specifically, having elected to plead an issue as part of a wider claim, a party cannot subsequently take issue with the tribunal for failing to deal with the issue as a standalone claim in setting-aside proceedings. The court's caution against attempts to create evidence or circumstances to support assertions that the arbitral tribunal would not be able to view a matter objectively is also a timely one, and a reminder that the Singapore courts will be vigilant against unmeritorious efforts to set aside an award.

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