Singapore Court of Appeal declines to grant declaratory relief on confidentiality in arbitration

29 June 2021

Republic of India v Vedanta Resources plc [2021] SGCA 50

In Republic of India v Vedanta Resources plc, the Singapore Court of Appeal refused to grant a declaration on questions on law concerning confidentiality, finding that the application was an abuse of process as it sought to improperly invite the court to revisit issues that had already been decided by the arbitral tribunal.

Background

The appellant and the respondent were parties to a Singapore-seated investment treaty arbitration (“Vedanta Arbitration”). Given the potential overlap between the Vedanta Arbitration and a separate but related investment treaty arbitration, the appellant sought to implement a regime to permit cross-disclosure of documents between the two arbitrations.

To this end, the appellant filed an application to the tribunal in the Vedanta Arbitration (“Vedanta Tribunal”) requesting that the Vedanta Tribunal implement the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (“UNCITRAL Transparency Rules”). After considering the parties’ submissions, the Vedanta Tribunal found, in a decision rendered in a Procedural Order No. 3 (“VPO 3”), that an implied obligation of confidentiality applied in every arbitration governed by Singapore procedural law, subject to several exceptions. One such exception was where the public interest or the interests of justice required disclosure. The Vedanta Tribunal thus developed an exception to cover investment treaty arbitrations which could be applied together with its inherent powers to design a customised confidentiality regime. This resulted in the pronouncement of a cross-disclosure regime whereby the parties were at liberty to apply for the disclosure of any specific, identified document, after having first consulted the other party with a view to reaching mutual agreement.

Pursuant to VPO 3, the appellant applied on two occasions to the Vedanta Tribunal for cross-disclosure of certain documents. The Vedanta Tribunal partially allowed the first application but rejected the second application. While the parties awaited the Vedanta Tribunal’s decision on the second application, the appellant applied to the Singapore High Court for a declaration that (1) documents disclosed or generated in the Vedanta Arbitration were not confidential or private, and (2) disclosure of documents disclosed or generated in the Vedanta Arbitration by the appellant would not be in breach of any obligation of confidentiality or privacy.

Although the High Court held that the appellant’s application was not an abuse of process, it declined to exercise its discretion to grant the declaratory relief sought as such relief was not justified by the circumstances of the case. The appellant appealed against the High Court’s decision.

Decision of the Court of Appeal

The Court of Appeal held that the appellant had no legitimate basis to invoke the jurisdiction of the court for the declaratory relief. The Court of Appeal emphasised that an arbitrator is “master of his own procedure”. In this case, the issue in VPO 3 was a procedural one as it concerned disclosure and/or discovery of the documents disclosed or generated in the Vedanta Arbitration. The fact that the obligation of confidentiality applied as a substantive rule of the common law did not take it outside the scope of the arbitral procedure and place it within the purview of the court.

The Court of Appeal found that the true purpose of the application was essentially to appeal the Vedanta Tribunal’s decisions by the backdoor and to obtain an advisory opinion to pressure the Vedanta Tribunal to reconsider its decisions. Both were manifestly improper.

Given the above, the Court of Appeal also found that the granting of the declarations would infringe the principle of minimal curial intervention. As the Vedanta Tribunal was the master of its own procedure, it was inappropriate for the court to intervene. Further, it was not proper for a party dissatisfied with a tribunal’s decision on a procedural matter which the party claims is not covered by existing case law to invite the court to rule on the procedural matter in order for such a ruling to be used as a tool to persuade the tribunal to reconsider its decision.

In view of the above, the Court of Appeal concluded that the High Court application and the appeal amounted to an abuse of process and dismissed the appeal.

Comment

The Court of Appeal’s decision underscores the approach of the Singapore courts to arbitral proceedings which is one of minimal curial intervention. The decision is significant because it clarifies for parties arbitrating in Singapore that the courts will brook no challenges or “appeals” against procedural directions and decisions of arbitral tribunals no matter how serious the underlying issue. This is important because it is long recognised in arbitration jurisprudence that the courts of the seat of arbitration in the exercise of their supervisory jurisdiction must only exercise such jurisdiction in the limited modes permitted in the arbitration legislation. This is recognised by Article 5 of the UNCITRAL Model Law on International Commercial Arbitration which has the force of law in Singapore. The Court of Appeal’s decision re-emphasises this understanding. Moreover, in recognising the primacy of the tribunal in all procedural matters, the decision frees arbitral tribunals from undue constraints of interference from the supervisory courts, a factor that is crucial to ensuring the efficiency of arbitrations. These are all important facets of continuing to ensure that Singapore remains attractive to arbitrating parties for reasons of its neutrality, integrity and efficiency, and the decision is therefore welcome in the arbitration community.