CZT v CZU: Deliberative Secrecy In Arbitration

• Published date: 18 July 2023
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution
• Law Firm: Singleton Urquhart Reynolds Vogel LLP
• Author: Mr Bruce Reynolds, Nicholas Reynolds and Adam Rose

In CZT v CZU,¹ the plaintiff - seeking to set aside the award of an arbitral tribunal on the basis of serious allegations by the dissenting arbitrator against the two other members of the tribunal - brought an application to compel the arbitrators to produce records of their deliberations.

The Singapore International Commercial Court ("SICC" or "Court") dismissed the plaintiff's production application, concluding that the plaintiff had not demonstrated that the interests of justice outweighed the policy reasons for protecting the confidentiality of deliberations. In the Court's view, the application to set aside the award could proceed without those records.

The decision is an important benchmark in terms of deliberative secrecy in arbitration, which according to the Court, will only yield in the rarest of cases, which generally would not include bare allegations even of a serious nature.

Background

The plaintiff entered into a contract with the defendant to deliver certain component packages that included materials, machinery and equipment, which the defendant subsequently alleged were defective. The defendant commenced arbitration proceedings in Singapore under the Rules of Conciliation and Arbitration of the International Chamber of Commerce ("ICC") in Singapore. The majority on a panel of three (the "Majority") found in favour of the defendant. However, the dissenting arbitrator (the "Minority") made various allegations against the majority, accusing them of:

• having "engaged in serious procedural misconduct",
• "continued misstating of the record",
• attempting "to conceal the trueratio decidendifrom the Parties",
• "distortion of the deliberation history",
• a lack of impartiality, and
• knowingly stating an incorrect reason for the Minority's refusal to sign the Majority's final award (the "FinalAward").²

The Minority concluded in his dissent that he had "lost any and all trust in the impartiality of [his] fellow arbitrators".³

On the basis of this apparent "smoking gun," the plaintiff brought an application before the SICC to have the award set aside under Singapore'sInternational Arbitration Act 1994(2020 Revised Edition). When the ICC Secretariat and all three members of the panel refused voluntarily to hand over records of the deliberations, the plaintiff filed summonses in the SICC against the three arbitrators for production of their records.

The SICC's Decision

With respect to general principles of deliberative secrecy, it was common ground between the parties that the records of arbitral deliberations are confidential by default and therefore protected against production orders, and the Court agreed that "it can scarcely be argued otherwise" even though no statutory provision expressly protects the confidentiality of arbitrators' deliberations.⁴ In the Court's view, the confidentiality of deliberations, like the confidentiality of arbitral proceedings themselves, "exists as an implied obligation in law"⁵ - that is, it exists at common law independent of (or in addition to) any statutory, institutional, or contractual provision to similar effect, for the following well-recognized policy reasons (which readers will recognize as very similar to the reasons justifying deliberative secrecy for courts):

• Confidentiality is a necessary pre-requisite for frank discussion between the arbitrators;
• Freedom from outside scrutiny enables the arbitrators to reflect on the evidence without restriction, to draw conclusions untrammelled by any concern in respect of subsequent disclosure of their thought processes, and, where they are so...