Singapore High Court: Arbitral Tribunal’s Power To Gate Witnesses, ‘Interest Of Efficiency’ vs. ‘Rules Of Natural Justice’

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In CBP v CBS [2020] SGHC 23, the Singapore High Court was hearing a challenge to an award where the arbitrator had declined to hear evidence from all seven of the plaintiff’s witnesses because he was of the view that he was empowered by the procedural rules (the Arbitration Rules of the Singapore Chamber of Maritime Arbitration (3rd Edition, 2015) (“SCMA Rules”)) governing the arbitration to do so. This, according to plaintiff has been a breach of the rules of natural justice which provides a ground to set aside the award under Section 24(b) of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”) and Art 34(2)(a)(ii) of the Model Law.

In Singapore, a party challenging an arbitration award as having contravened the rules of natural justice needs to establish following four requirements[1]:

  • which rule of natural justice was breached;
  • how it was breached;
  • in what way was the breach connected to the making of the award; and
  • how the breach prejudiced its rights.

In the instant case, the Plaintiff alleged that its right to have an adequate opportunity to be heard has been breached. Central to this issue was the Rule 28.1 of the SCMA Rules which reads as under:-

Unless the parties have agreed on a documents-only arbitration or that no hearing should be held, the Tribunal shall hold a hearing for the presentation of evidence by witnesses, including expert witnesses, or for oral submissions.

On its face, this rule appears to be consonant with the commonly accepted understanding amongst arbitration practitioners that, unless all parties agree, the arbitral tribunal cannot decide on its own accord to hold a documents-only arbitration. Thus, a plain reading of r 28.1 of the SCMA Rules makes it clear that, where parties have not come to an agreement that the arbitration should only be on a documents-only basis, an oral hearing must be held.[2]

But in this case, the Arbitrator interpreted the latter portion of Rule 28.1 which relates to the conduct of an oral hearing in the event that parties do not agree to a documents-only arbitration, to mean that it permits the arbitrator to decide to dispense with the need for the presentation of witnesses or witness gating even where one of the parties insists on the need for witness testimony.

Thus, the moot question was whether the tribunal’s power to decide not to hear from a witness is an absolute power that can be used to override the rules of natural justice, which demand that parties must be given a fair hearing?

On interpretation of SCMA Rules, Simon Davidson (SCMA Head of Procedure Committee), Commentary on the 3rd Edition of the Rules of SCMA (21 October 2015) suggests that the latter portion of Rule 28.1, which provides that “the Tribunal shall hold a hearing for the presentation of evidence by witnesses, including expert witnesses, or for oral submissions” must be read holistically, such that oral submissions cannot be utilised as an alternative to the presentation of evidence by witnesses. Instead, the SCMA Rules envisage that, where parties have not agreed to a documents-only arbitration, parties must be allowed to call witnesses to give evidence, if they wish to do so. The point is reinforced by Rule 30.5 of the SCMA Rules, which allows witnesses to submit their evidence in written form, and for the tribunal to place such weight on the written testimony as it thinks fit.

Thus, the Singapore High Court observed that if a party wishes to present witness testimony, an oral hearing must be held, whether for the leading of oral evidence or for the other party to cross-examine the witnesses on their witness statements. It is only where all parties have decided not to lead oral evidence, or cross-examine any of the witnesses on their witness statements, that a hearing only for oral submissions can be held. In that situation, the parties may decide that such an oral hearing is not needed and they may be content to rely on written submissions. If that transpires, the parties would then have agreed to a documents-only arbitration. Thus in Court’s view, this holistic reading of Rule 28.1 of the SCMA Rules appropriately explains the use of the word “or” prior to the words “for oral submissions”.

The arbitral tribunals may be impliedly vested with the powers to limit the oral testimony of witnesses, and that such powers flow from their power to control the conduct of the arbitration proceedings. However, while the expeditious disposition of matters is a relevant consideration in arbitration, this does not grant the arbitrator free reign to reject all witness evidence in the interest of efficiency. Rule 25.1 of the SCMA Rules requires the arbitrator to “ensure the just, expeditious, economical and final determination of the dispute”. Thus, it is clear that the expeditious resolution of the dispute is but part of the considerations which an arbitrator must have in mind when determining the process to be adopted; it cannot be the paramount consideration above all other considerations, such as the need to ensure a just determination of the dispute.[3]

Most commentators acknowledge that the authority to limit witness testimony ‘must be tempered by a tribunal’s duty to afford the parties a fair opportunity to present their case’[4]. This is consistent with the authorities which show that, even if arbitral tribunals have the general power to gate witnesses in the interests of efficiency, this cannot be an absolute power that is used to override the rules of natural justice, which demand that parties must be given a fair hearing. [5] Thus, wide and flexible procedural power of the Tribunal is, not unqualified: it is subject to the standards set by the rules of natural justice and in particular the right to be heard.[6] While an arbitral tribunal is the master of its own procedure, its case management powers are not without limits, and are subject to the rules of natural justice, which include the right to be heard.[7]

In view thereof, the Court held even if it is accepted that the arbitrator has the power to gate witnesses under the SCMA Rules, this must be exercised subject to the fair hearing rule. If the calling of a witness is plainly relevant to a particular issue, an arbitral tribunal cannot gate the witness on the basis of its procedural powers. Such would be to utilise a procedural power to defeat the substantive rights of the parties.

Unless the arbitral tribunal has a substantive basis to conclude that all the witnesses sought to be presented are irrelevant or superfluous, such witnesses ought not to be rejected on the basis of efficiency or savings of costs. Indeed, it is “perfectly acceptable for a tribunal to impose reasonable limits if an excessive number of witnesses are proposed”[8], but the tribunal should not reject all the witnesses simply because it is of the preliminary view that all the witnesses would be irrelevant. Gating must not be utilised as an indirect means of achieving a hearing-by-submissions only, as its fundamental utility is to prevent unnecessary delay.

Therefore, consistent with the observations of the commentators above, the Court held that an arbitral tribunal’s witness-gating powers are not absolute, and can only be utilised if it can be seen that the witnesses’ evidence are plainly irrelevant or repetitive.

The Court recognized that a tribunal has to take into account a myriad of factors when exercising its case management powers to ensure a fair and expeditious conduct of the matter. Hence, the supervisory role of the court over the tribunal’s exercise of his case management powers ought to be “exercised with a light hand” in the context of a challenge based on the fair hearing rule.[9] However, where the conduct complained of is “sufficiently serious or egregious so that one could say a party has been denied due process”, the court may have to step in and find that there has been a breach of the rules of natural justice, in particular the fair hearing rule.[10]

Accordingly, the Court set aside the award while holding that the rule of natural justice which requires that each party be given a fair hearing and a fair opportunity to present its case as enunciated in Soh Beng Tee has been breached in this case which cannot be justified on the arbitrator’s implied witness-gating powers, nor on the wide discretion granted to an arbitrator to determine issues of procedure and evidence in the arbitral proceedings.

[1] Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd [2007] 3 SLR(R) 86 (“Soh Beng Tee”) at [29]

[2] CBP v CBS [2020] SGHC 23 at [54]

[3] CBP v CBS [2020] SGHC 23 at [71]

[4] Judith Levine, “Can arbitrators choose who to call as witnesses? (And what can be done if they don’t show up?)” in Albert Jan Van den Berg (ed), Legitimacy: Myths, Realities, Challenges (Kluwer Law International, 2015)

[5] English Court of Appeal in Dalmia Dairy Industries Ltd v National Bank of Pakistan [1978] 2 Lloyd’s Rep 223

[6] ADG and another v ADI and another matter [2014] 3 SLR 481 (“ADG”), Vinodh Coomaraswamy J was concerned with r 16.1 of the Arbitration Rules of the Singapore International Arbitration Centre (4th Ed, 1 July 2010), which, like r 25.1 of the SCMA Rules in the present case, grants the arbitral tribunal wide and flexible procedure powers “to ensure the fair expeditious, economical and final determination of the dispute.”

[7] Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd [2015] 1 SLR 114 (“Triulzi”)

[8]  Jeffrey Maurice Waincymer, Procedure and Evidence in International Arbitration (Kluwer Law International, 2012 at p 889)

[9] Triulzi at [132].

[10] Triulzi at [134]; ADG at [116]).

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