Parties seeking to set aside arbitral awards face an uphill battle, even when one of the arbitrators on the tribunal has alleged “serious procedural misconduct” by their fellow panelists.

In CZT v CZU (“CZT”),[1] the plaintiff sought to have an award set aside in light of allegations by an arbitrator against the other two tribunal members, on the basis that those other arbitrators breached the rules of natural justice. A panel of three judges of Singapore’s International Commercial Court (“SICC”) dismissed the plaintiff’s application. In doing so, the Court succinctly explained the requirements of the fair hearing rule, which it described as a pillar of natural justice. Below, we consider this case’s implications.

Factual Background

In brief, the plaintiff had 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 accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce (“ICC”) in Singapore. The majority of a tribunal of three (the “Majority”) found in favour of the defendant.

The ICC sent the final award, reflecting the Majority’s decision, to the parties. On that same day, the dissenting arbitrator (the “Minority”) sent a copy of his dissenting opinion to the parties.

On this point, CZT v CZU may be familiar to some readers. We previously covered an initial step in this proceeding, which related to summons filed by the plaintiff against the three arbitrators for production of their records.[2] Those summons were dismissed by the same judges of the SICC in a benchmark decision on deliberative secrecy.

Thereafter, the plaintiff brought an application to have the Majority’s award set aside under Singapore’s International Arbitration Act 1994,[3] arguing, among other things, that the Majority “acted in breach of natural justice”.[4]

The Court’s Decision

The plaintiff made three arguments before the Court:

  • The Majority failed to consider critical arguments made by the plaintiff in the arbitration;
  • The Majority reached conclusions in the final award based on facts or matters that were not argued by the parties during the arbitration and wrongly attributed arguments and positions to the parties that were not supported by the arbitration record; and
  • There was a reasonable suspicion of bias on the part of the Majority.[5]

Citing Singapore’s Court of Appeal in Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd,[6] the Court held that the party challenging an award as having breached the rules of natural justice must establish:

  • 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.[7]

The Court also held that the “two pillars of natural justice” are that (1) an adjudicator must be disinterested and unbiased, and (2), parties must be given adequate notice and opportunity to be heard, i.e., the “fair hearing rule”.[8]

The Court then explained the requirements of the fair hearing rule:

To comply with the fair hearing rule, the tribunal’s chain of reasoning must be: (a) one which the parties had reasonable notice that the tribunal could adopt; and (b) one which has a sufficient nexus to the parties’ arguments. A party has reasonable notice of a particular chain of reasoning (and of the issues forming the links in that chain) if: (i) it arose from the parties’ pleadings; (ii) it arose by reasonable implication from their pleadings; (iii) it is unpleaded but arose in some other way in the arbitration and was reasonably brought to the party’s actual notice; or (iv) it flows reasonably from the arguments actually advanced by either party or is related to those arguments.[9]

In that regard, the “overriding burden is on the applicant to show that a reasonable litigant in his shoes could not have foreseen the possibility of the reasoning of the type revealed in the award.”[10] The Court added, “The arbitrator is not expected to consult the parties on his thinking process before finalising his award unless it involves a dramatic departure from what has been presented to him.”[11]

In short, it must be “plain that the reasoning of the Tribunal was something so far outwith the contemplation of the parties as a course that the Tribunal could follow that it could not have been foreseen as flowing from what was argued.”[12]

The Court also stated that it is “axiomatic that an error of law or fact in the award does not amount to a breach of natural justice”,[13] and a court will only intervene if the tribunal “failed to consider an issue at all” (emphasis in original).[14]

With this high bar in mind, the Court found that the Majority considered all the issues to some extent. Further, it found that there was no causal connection between the alleged breach and the award, and that there was in any event no prejudice to the plaintiff.

The Court also acknowledged that the Majority did rely on some facts or matters that were not pleaded or argued, but that there was no causal connection between these alleged breaches and the award, and no prejudice to the plaintiff. The Court also rejected the plaintiff’s strict approach and found, for instance, that the Majority was entitled as part of its comparative analysis to refer to contractual provisions about which it had heard no argument.

On the question of bias, the Court found the allegation to be one of apparent, rather than actual, bias. The Court rejected the Minority’s bare allegations against his colleagues, including his claim that the Majority had concealed its true ratio decidendi (i.e., had falsified the basis of its decision). The Court noted that the “Minority’s frustration at not having been able to persuade the Majority to his views is palpable” but that “that is clearly no reason for this Court to intervene.”[15]

The Court also rejected the plaintiff’s argument that an ex parte phone call from a member of the Majority to the defendant’s counsel after the final award created a reasonable suspicion of bias. This member of the Majority called counsel for both parties separately to discuss the Minority’s dissent, which had been unilaterally distributed by the Minority and did not form part of the final award in the ICC’s view.

While the plaintiff argued that the phone call to the defendant contravened the tribunal’s own procedural order, the Court pointed out that the procedural order only prohibited counsel from reaching out to the tribunal ex parte, and not vice versa. The Court concluded that the call, and a subsequent email in which the member acknowledged making the call, evidenced his “unhappiness” with the Minority’s dissemination of his dissent.[16]


Given that Singapore and Canada are both Model Law jurisdictions, this case is of significant relevance to Canadian readers (particularly as a coda to the Court’s prior decision in this matter). Given that the plaintiff relied in large part upon the same factual allegations that it advanced in its unsuccessful summons application, it is therefore perhaps unsurprising that the result in this set-aside application was the same.

On the other hand, some of the salient points of the decision raise the question of whether it might be decided similarly in Canada, where many jurisdictions have jealously protected parties’ rights to make their case and respond to the case against them (consistent with Article 34(2)(a)(ii) of the Model Law, to which the Court referred in CZT). As a result, it is not unheard for an award to be set aside[17], or a trial judgment to be overturned or remitted back to the trial judge, in similar situations on the basis that the arbitrator or judge deprived the parties of the opportunity to fully brief their case. Notwithstanding that the Court in CZT similarly emphasized the importance of parties having sufficient opportunity to be heard, it would seem that Singaporean courts contemplate a somewhat higher threshold for finding a violation.

On the other hand, the Court in CZT took a nuanced view of this issue, distinguishing between an award dealing with an issue not raised by the parties (and therefore outside the terms of submission to arbitration, contrary to Article 34(2)(a)(iii) of the Model Law), versus an award dealing with arguments not raised by the parties (which goes to the issue of a breach of natural justice). This, in particular, is an important distinction for parties to bear in mind when considering whether to apply for set-aside, and how to plead in such an application.

As well, the Court acknowledged that the Majority relied on facts or matters that were not pleaded or argued, but found that this was not grounds for setting aside the award because it had not affected the outcome. Readers will recall that in the recent Ontario Divisional Court decision in Ledore v Dixin[18] (discussed here), the Court found that parties to an interim construction dispute adjudication under Ontario’s Construction Act[19] had “the right to be heard on the determinative issue”.[20] This is potentially consistent with CZT, in that both decisions would require the parties be allowed to make submissions on any determinative issue.

CZT also makes clear that it is incumbent upon parties (and particularly counsel) to anticipate the possibility of the tribunal employing reasoning that does not necessarily flow solely from the issues and arguments raised by counsel, so long as it is not “a dramatic departure from what has been presented” to them. In that regard, it would behoove parties to retain counsel with ample experience in the type of dispute at issue.

It is also noteworthy that the Court found that the tribunal’s procedural order did not apply to ex parte communications from the tribunal. This may meet the letter of the procedural order, but perhaps not its spirit insofar as the underlying rationale for a prohibition on ex parte communications – procedural unfairness – would arguably apply regardless of who initiates the communication in question. That said, the Court’s thinking may have been influenced by the fact that the communications occurred after the award was issued, and the fact that the tribunal contacted both parties on the same day, implying reciprocity.

In any event, it is evident from the decision that there is a heavy burden on an applicant to set aside an award on the basis of a breach of natural justice. Arbitrators are not held to a standard of perfection – on either questions of fact or of law. Accordingly, parties to an arbitration may want to err on the side of over-inclusivity rather than under-inclusivity in their submissions.


[1] CZT v CZU, [2023] SGHC(I) 22.

[2] CZT v CZU, [2023] SGHC(I) 11.

[3] International Arbitration Act 1994 (2020 Revised Edition).

[4] CZT v CZU, [2023] SGHC(I) 22 at para 22.

[5] CZT v CZU, [2023] SGHC(I) 22 at para 26.

[6] Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd, 2007 SGCA 28.

[7] CZT v CZU, [2023] SGHC(I) 22 at para 28.

[8]CZT v CZU, [2023] SGHC(I) 22 at para 30.

[9] CZT v CZU, [2023] SGHC(I) 22 at para 33.

[10] CZT v CZU, [2023] SGHC(I) 22 at para 34.

[11] CZT v CZU, [2023] SGHC(I) 22 at para 34.

[12] CZT v CZU, [2023] SGHC(I) 22 at para 60.

[13] CZT v CZU, [2023] SGHC(I) 22 at para 27.

[14] CZT v CZU, [2023] SGHC(I) 22 at para 40.

[15] CZT v CZU, [2023] SGHC(I) 22 at para 100.

[16] CZT v CZU, [2023] SGHC(I) 22 at para 106.

[17] See, for example, our case comment on Mattamy (Downsview) Limited v. KSV Restructuring Inc. (Urbancorp), 2023 ONSC 3012, available here.

[18] Ledore Investments v Dixin Construction2024 ONSC 598.

[19] Construction Act, RSO 1990, c C.30.

[20] Ledore Investments v Dixin Construction2024 ONSC 598 at para 28.

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