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Singapore Court of Appeal refuses declaratory relief on confidentiality in BIT arbitration
Singapore Court of Appeal refuses declaratory relief on confidentiality in BIT arbitration
3 June 2021
Series
Blogs
3 June 2021
In India v Vedanta Resources [2021] SGCA 50, the Singapore Court of Appeal recently rejected an attempt to obtain declarations on points of law regarding confidentiality as they were an illegitimate attempt to relitigate issues already determined by the tribunal. The case arose in the context of the cross-disclosure of documents between two related bilateral investment treaty (“BIT”) arbitrations, in relation to retroactive tax bills.
India has faced a number of BIT claims in relation to retroactive tax bills since the amendment of the Indian Income Tax Act in 2012. The present case concerned a BIT arbitration between Vedanta (a UK plc) and India, seated in Singapore (the “Vedanta Arbitration”), and a related BIT arbitration seated in the Netherlands, between Cairn Energy (another UK plc) and India (the “Cairn Arbitration”).
While these two arbitrations were separate, the subject matter was related so India had applied to the tribunal in the Vedanta Arbitration (the “Tribunal”) to request that it implement an appropriate disclosure regime. In considering this the Tribunal looked at a number of sources of law, including Singapore law (as the law of the seat), on arbitral confidentiality. The result was a procedural order whereby it permitted either party, India or Vedanta, to apply for the disclosure of specific and identified documents to the Cairn Arbitration, after first having consulted with the other with a view to reaching mutual agreement on the disclosure and any redactions. Under this regime, India made two applications for documents to be disclosed to the Cairn Arbitration, with limited success.
Application to the Singapore High Court
In August 2018, whilst the Tribunal was considering the second of these applications, India filed an application before the Singapore High Court, seeking declarations that (i) documents disclosed or generated in the Vedanta Arbitration were not confidential or private; and (ii) disclosure in the Cairn Arbitration of documents disclosed or generated in the Vedanta Arbitration would not be a breach of any confidentiality or privacy obligations.
The Singapore High Court ([2020] SGHC 208) held that this application was not an abuse of process, but denied the application on discretionary grounds for three reasons: (i) the Vedanta Tribunal had the power to decide and possibly develop the issue of confidentiality under Singapore arbitration law; (ii) the declarations would not be persuasive as Singapore law was only one of three sources of law considered by the Tribunal in formulating the cross-disclosure regime; and (iii) the principle of minimal curial intervention militated against the grant of the declarations, particularly as India had placed the scope of confidentiality under Singapore law squarely before the Tribunal.
Appeal to the Singapore Court of Appeal
In the appeal, the Court held that there was no legitimate basis to invoke the Court’s jurisdiction, and that the original application to the High Court was an abuse of process – so questions of discretion did not arise.
On the Court’s jurisdiction; there was simply no legitimate basis for the application [19, 34]. India’s allegations were not, for example, that the Tribunal exceeded its power or jurisdiction [19], and the Court further held that a party has no standing to “obtain guidance from a court in relation to a general or abstract question of law” [31], particularly as the questions asked of the Court were the same questions put before the Tribunal [32]. India’s application was simply an attempt to relitigate the Tribunal’s conclusion on confidentiality.
On abuse of process, the Court therefore found that the true purpose of the application was either a backdoor appeal against the Tribunal’s decisions, or an attempt to put an advisory opinion before the Tribunal and thereby exert pressure [35]. The Court held that both of these purposes were “manifestly improper” [46], thereby leading to the conclusion that the application was an abuse of process.
Comment
The Court’s conclusions reinforce the principle of minimal curial intervention, and the restrictions on appealing orders made by a tribunal under Singapore arbitration law. This confirms the finality of arbitral proceedings, and provides greater clarity and certainty of the tribunal’s powers and authority to make decisions. In particular, in relation to procedural matters such as disclosure and discovery of documents, the Court emphatically stated that the Tribunal was “master of its own procedure” [48].
More generally, given that the Court declined to rule on the substantive issues of confidentiality that arose in the case, the extent to which confidentiality obligations extend to investment treaty arbitration remains an open question under Singapore law. Where, in such proceedings, parties wish for more transparency, one solution is to agree to use the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration; which may see increased use as more states become party to the UN Convention on Transparency in Treaty-based Investor-State Arbitration, which provides a more systematic framework for the application of those rules.
Click here to read the judgment.