Facts

The basis of the appellant’s application for the declarations was in Section 18 of the Supreme Court of Judicature Act (SCJA) read with paragraph 14 of the First Schedule to the SCJA, as well as Article 5 of the UNCITRAL Model Law (Model Law).

The parties and the arbitrations

In 2006, the Cairn Group restructured its Indian assets such that Cairn UK Holdings Ltd (Cairn UK) transferred most of its Indian assets to Cairn India Ltd (Cairn India), which then listed on the Indian markets. The Cairn Group used the IPO proceeds to acquire other Indian assets still held by Cairn UK. Cairn UK realised USD3.9 billion in capital gains from the restructuring.

The Republic of India (appellant) deemed the scheme to be tax abusive and imposed capital gains tax on the gain. However, no Cairn Group entity ever paid any capital gains tax. In 2011, Vedanta Resources Plc (respondent) acquired 100% of Cairn India. In 2015, the appellant issued tax assessment orders in respect of the transaction.

In September 2015, Cairn UK commenced arbitration seated in the Netherlands against the appellant (Cairn arbitration). In November 2015, the respondent commenced an arbitration seated in Singapore against the appellant (Vedanta arbitration). Both arbitrations arose from the appellant's alleged breach of the India-UK bilateral investment treaty (BIT) and both were administered by the Permanent Court of Arbitration and conducted under the UNCITRAL Arbitration Rules 1976.

The cross-disclosure regime

Given the overlap between the Cairn Arbitration and Vedanta Arbitration, the appellant sought to mitigate the risk of inconsistent decisions on the merits and on jurisdictional issues (at a minimum) by requesting each tribunal to allow cross-disclosure between the arbitrations.

The tribunal in the Cairn arbitration ordered an open cross-disclosure regime in which disclosure was allowed by default, though parties could file objections that could be accepted "by rare exception". Meanwhile, in the Vedanta arbitration, under the tribunal's Procedural Order (VPO) 3, disclosure was not allowed by default and was only permissible as an exception upon application. As such, the burden of proof was on the party seeking cross-disclosure.

Appellant's cross-disclosure requests in the Vedanta arbitration

Following the issuance of VPO 3, the appellant applied for cross-disclosure on two occasions. By VPO 6, the Vedanta tribunal permitted the appellant’s first application for cross-disclosure albeit with redaction agreed by the parties. By VPO 7, the Vedanta tribunal rejected the second application altogether.

Decision of the High Court

The appellant filed an application with the High Court before the second application for cross-disclosure was determined. The appellant also gave an undertaking that if the application was granted, it would only use the declarations from the court to request the Vedanta tribunal to reconsider and revise the VPOs (Undertaking).

The respondent argued that the application was an abuse of process or collateral attack on the VPOs.

The High Court disagreed with that argument but refused to grant the declarations because relief was not justified in the circumstances. It held that:

• Arbitral tribunals can, and indeed should, develop the common law to resolve disputes.
• VPO 3 was a reasonable middle-ground where the applicable sources of law were in conflict as regards confidentiality.
• The principle of minimal curial intervention established in BLC and others v BLB and another [2014] 4 SLR 79 (at paragraph 51), militated against the grant of declarations.

(See Republic of India v Vedanta Resources PLC [2020] SGHC 208.)

Appeal to the Court of Appeal

On appeal, the appellant submitted that the High Court erred by:

• Concluding that it was within the power of the Vedanta tribunal to develop Singapore's lex arbitri (law of arbitration).
• Finding that the declarations would not be persuasive enough to invite a reconsideration of VPO 3.
• Concluding that the principle of minimal curial intervention militated against the declarations.

The appellant also sought a further declaration that there is no general obligation of confidentiality under Singapore's lex arbitri.

The respondent submitted that:

• The judge had not erred and that the appellant's attempt to re-litigate the matter decided in arbitration amounted to an abuse of process.
• The declarations were unlikely to be persuasive or serve any practical purpose.
• The declarations, if granted, would violate the principle of minimal curial intervention, despite the Undertaking.

Decision of the Court of Appeal

The Court of Appeal rejected the appellant's appeal.

Appellant had no legitimate basis to invoke the court's jurisdiction

The Court of Appeal observed that it appeared as if the appellant’s application was premised on the Vedanta tribunal acting in excess of its jurisdiction. This was demonstrated by a recurring theme in its submissions that the Vedanta tribunal could not develop Singapore's lex arbitri because it was an external framework of rules imposed by the arbitral seat on a tribunal. The Court of Appeal held as follows:

• A tribunal can determine what it regards as the correct legal position if parties are given the opportunity to address the tribunal on the issue. It was artificial to suggest that the Vedanta tribunal had not been asked to develop the lex arbitri in being asked to permit cross-disclosure.
• An error of law was insufficient to justify curial intervention, even where the purported error pertains to the lex arbitri. A party must bring itself within the permitted avenues of curial intervention under the Model Law or International Arbitration Act (Cap. 143A).
• The appellant could not assert that the Vedanta tribunal acted in excess of its jurisdiction given its own failure to raise a timely complaint, and subsequent reliance on VPO 3 to seek disclosure.

The appellant's application was premised on under section 18 of the SCJA, read with Article 5 of the Model Law. According to the appellant, confidentiality was not a matter “governed by this Law” (i.e. Article 5). It was for the court to pronounce whether the confidentiality obligation in arbitrations extended to investment treaty arbitrations, which it had the power to do under section 18 of the SCJA read with paragraph 14 of the First Schedule to the SCJA. The court held this was not a legitimate basis because the issue in VPO 3 was procedural and it was trite that an arbitrator was the master of his own procedure. 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.

It also held that:

• It was illegitimate to seek the court's guidance on a general or abstract question of law.
• Such conduct could not be legitimised by tying the question to the facts making the application an impermissible attempt to re-litigate issues which had been determined.

It was incorrect to assume that that the appellant's conduct was legitimised by the Undertaking when in fact, the Undertaking was precisely what made the application an abuse of process as it revealed that tying the question to the facts was a sham.

True purpose of the appellant's application

Although framed as a request for declaratory relief, the application was essentially a backdoor appeal against the decisions of the Vedanta tribunal. This was because:

• The request for a declaration that documents disclosed or generated in investment-treaty arbitrations were not confidential or private, was a request to overrule the Vedanta tribunal's express finding that all Singapore arbitrations are subject to an implied obligation of confidentiality.
• A declaration allowing disclosure of the documents in the Vedanta arbitration, was a request for relief directly contradicting VPO 6 and VPO 7.

As such, the application was a manifestly improper attempt to obtain an advisory opinion from the court and was tantamount to an invitation to the court to act as an amicus (friend of the court) to the Vedanta tribunal.

Violation of the principle of minimal curial intervention

Regardless of whether the application was characterised as a backdoor appeal or an attempt to obtain an abstract ruling to exert pressure on the Vedanta tribunal, the granting of the declarations would violate the principle of minimal curial intervention at its highest level, as the tribunal is the master of its own procedure.

Abuse of Process

The application and, by extension, the appeal were an abuse of process on several levels:

• It was an application without foundation because there was no legitimate basis.
• It was vexatious because it sought to re-litigate issues decided by the Vedanta tribunal.
• It was improper to seek an advisory opinion from the court.

The attempts to circumvent these challenges by tying the declaration to the facts and giving the Undertaking appeared to be a sham to disguise the true nature and purpose of the application.

Comment

The Court of Appeal has affirmed its robust stance with respect to "backdoor appeals" to re-litigate issues already determined by a tribunal. This is evident from the court's approach in classifying a backdoor appeal as an abuse of process, under the category of vexatious proceedings. It is clear that the court will examine carefully the substance rather than the form of an application to determine whether it has any proper basis. Where such application is found to be a backdoor appeal, the Singapore courts will not hesitate to dismiss it.

Case

Republic of India v Vedanta Resources plc [2021] SGCA 50 (12 May 2021) (Sundaresh Menon CJ; Judith Prakash JCA; Steven Chong JCA).