CVV V CWB: The Nature Of Set-Aside Applications And Adequacy Of The Tribunal's Reasons

• Published date: 12 March 2024
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Singleton Urquhart Reynolds Vogel LLP
• Author: Mr Bruce Reynolds, Nicholas Reynolds and Adam Rose

It is well established that parties seeking to set aside an arbitral award for a breach of natural justice face significant hurdles. In CVV & 10 Ors v CWB ("CVV"),¹ Singapore's Court of Appeal addressed how parties often misapprehend the process and treat it effectively as an appeal on the merits, when it is in fact a much more limited review with a relatively high bar to success. Notably, the Court also provided guidance on whether an award can be attacked on the basis of inadequacy of the tribunal's reasons (that is, lack of sufficient reasons), which will be of significant interest to Canadian readers. Below, we review the case and its takeaways.

Facts

In CVV, CWB² was engaged as an asset advisor by Singaporean fund manager CVQ, and claimed that CVQ had failed to pay it certain fees. CVQ and subsidiaries of two of its funds (collectively, the "Claimants") brought the dispute to arbitration.

A tribunal dismissed their claims and allowed counterclaims by CWB for payment of the advisory fees, and in particular, a "Performance Fee". The Claimants then came to court to have the award against them set aside on the grounds of a breach of natural justice.

The "crux" of their argument was that the tribunal "breached the fair hearing rule by failing to apply its mind and/or to give reasons for its decision on essential issues in the Award".³ Their application was dismissed at first instance, and - as discussed below - by the Court of Appeal.

The Decision

Readers will recall from our recent article on CZT v CZU⁴ that a party challenging an award in Singapore on the grounds of natural justice must show:

• Which rule of natural justice was breached;
• How it was breached;
• In what way the breach was connected to the making of the award; and
• How the breach prejudiced its rights.⁵

In CVV, the Court also identified a common reason for unsuccessful challenges, namely that the applicant argues the merits of the award:

From a brief survey of Singapore cases, a significant majority of such applications have been unsuccessful because those challenges were found in substance to have engaged the merits of the award. When a dissatisfied party relies on an alleged breach of the rules of natural justice, it is crucial to bear in mind that the typical grounds on which a litigant may challenge a judgment are quite different and distinct from those which apply in the context of an arbitral award. The failure to properly appreciate this vital distinction is usually the reason why the challenge is ultimately unsuccessful.⁶ [emphasis added]

The Court offered the following admonition:

For better or for worse, parties in an arbitration must accept the consequences of their choice of the arbitral tribunal as regards the merits of the award, irrespective of the degree of their dissatisfaction with the outcome in the award.⁷ [emphasis added]

The Court also observed that finality is "[o]ne of the key virtues" of arbitration, but that this seems only to be "appreciated by the winning party because dissatisfied parties are increasingly seeking the court's assistance and intervention to set aside arbitral awards."⁸

Against that backdrop, the Court addressed four arguments from the Claimants.

First, the...