In BVU v BVX  SGHC 69 the High Court of Singapore refused to set-aside an arbitral award on the basis that BVX, the successful party in the arbitration, did not call certain witnesses to give evidence and disclose certain internal documents. BVU’s attempt to secure these documents by way of subpoena in the context of the set-aside proceedings also failed. The decision highlights that parties to an international arbitration are normally subject to less stringent requirements for the disclosure of documentary and other evidence. The decision also emphasises that belated attempts to revisit the merits of a case by procuring additional evidence in the context of set-aside proceedings are unlikely to be successful.
In 2012, BVU and BVX entered into an agreement. The agreement set out the terms upon which the BVU would supply food products to BVX.
A dispute arose between BVU and BVX. In 2013, BVU commenced ICC arbitration proceedings seated in Singapore. BVU unsuccessfully alleged that BVX had breached the Agreement by:
- failing to place purchase orders for products in the manner prescribed by the Agreement or at all;
- failing to treat BVU as the “most preferred Supplier” by its actions in a holding a public tender; and
- failing to submit a rolling forecast in accordance with the Agreement.
BVX’s success in the arbitration hinged upon the Tribunal’s interpretation of certain provisions in the Agreement. In this context, BVX’s decision not to call certain witnesses or produce internal documents became relevant.
The Tribunal eventually issued a final award in favour of BVX. BVU subsequently commenced court proceedings seeking to set aside the Final Award on the basis that BVX had “deliberately put forward a false case in the arbitration by concealing the true facts and withholding and suppressing curial evidence.”
BVU’s lawyers then contacted employees that BVX had declined to call as witnesses in the arbitration proceedings, in the hope that they would give evidence to aid BVU in its set-aside application. One of the former employees swore an affidavit which allegedly supported BVU’s interpretation of the Agreement. A subpoena was also issued by BVU to the former employee for the production of certain documents. BVX subsequently sought to set that subpoena aside.
The applications to set aside the tribunal’s award and the subpoena were heard concurrently by the Singapore High Court.
BVU’s application to set aside the Final Award
BVU unsuccessfully sought to rely on two grounds to set aside the Final Award:
- First, that the Final Award was induced or affected by fraud or corruption, contrary to s 24(a) of the IAA; and
- Second, that the Final Award is in conflict with the public policy of Singapore, contrary to Art 34(2)(b)(ii) of the UNCITRAL Model Law on International Commercial Arbitration (the “Model Law”).
In order to succeed, BVU had to prove that there was a deliberate concealment aimed at deceiving the Tribunal, a causative link between the alleged concealment and the decision in favour of BVX, and no good reason for the non-disclosure.
The Court found that BVU failed to satisfy each of these elements. Interestingly, the Court made the following key observations.
- There was no obligation on BVX to call the former employee as a witness or to adduce the documents that the former employee intended to produce under the subpoena; indeed, the tribunal had not directed BVX to do either.
- BVX was not under a general obligation to produce all documents that could be relevant, as would be the case in Singapore litigation. The narrower disclosure obligations in arbitration (for example, as provided by the IBA Rules on the Taking of Evidence in International Arbitration) impose additional materiality and relevance thresholds.
- In this case, the Tribunal had already thoroughly considered the issue of whether the former employee should be called as a witness, and reached the view that BVU had failed to show the materiality of this evidence (again, inherently recognising the importance of the IBA Rules requirement for relevance).
- Similarly, the Court emphasised that BVU could have requested the documents that were subject of the subpoena during the arbitration but did not do so.
In these circumstances, this was not a case of concealment and there was no need to consider the issue of any causative link between the alleged concealment and the issuance of the award.
BVX’s Application to set aside the Subpoena
The Court found that the documents sought by BVU under the subpoena were not “relevant, material and necessary for the fair disposal of the matter” (i.e. in the set-aside proceedings) and the Court set aside the subpoena. The Court also held that the subpoena should be set aside because it was an abuse of process and an attempt to “reopen the arbitrated dispute through a backdoor appeal on the merits“. Critically, the Court noted that BVU had failed to provide a satisfactory explanation for why it had not sought disclosure of these documents during the arbitration or sought judicial assistance for the production of the documents under the IAA.
This case is not unique or revolutionary but it usefully reinforces some key issues which parties engaged in Singapore-seated arbitration proceedings should bear in mind:
- First, there is a high threshold for setting aside arbitral awards in Singapore. Attempts to reopen the merits of a dispute in set-aside proceedings are very likely to fail.
- Second, unlike in litigation in some common law jurisdictions, there is no general duty on parties engaged in arbitration proceedings to disclose all documents when not ordered by a tribunal to do so. Disclosure obligations are often narrower, as is the case under the IBA Rules.
- Third, there is no positive obligation on a party to call a factual witness. While a tribunal would be able to draw an adverse inference where it is found that the witnesses’ evidence would have had a material outcome, findings of adverse inferences are not common.
- Fourth, parties are entitled to request relevant documents in arbitration proceedings and should take care to ensure the requests are comprehensive so that they will capture all relevant documents. Belated attempts to obtain documents during set-aside proceedings will almost certainly fail and will be perceived as an attempt to re-open the merits of the case.
For further information, please contact Alastair Henderson, Partner, Daniel Waldek, Senior Associate, Mitchell Dearness, Legal Manager, or your usual Herbert Smith Freehills contact.