1 Singapore's arbitration law imposes a general obligation on the parties to an arbitration to keep the documents and proceedings in that arbitration confidential. Does this general obligation of confidentiality extend to all species of arbitration? In particular, does this general obligation extend to an investment-treaty arbitration? And if a party to an arbitration puts this question of law to the tribunal in an investment-treaty arbitration and receives an answer it does not like, can that party put the question again to a Singapore court in an application for declaratory relief? These are the principal questions raised by the application before me.
2 The plaintiff in this application is the Republic of India, a sovereign state. The defendant is a company incorporated in the United Kingdom.1 The plaintiff and the defendant are now the respondent and the claimant respectively in an investment-treaty arbitration seated in Singapore. For convenience, I will refer to it this arbitration as the Vedanta Arbitration. The plaintiff is also the respondent in a related but separate investment-treaty arbitration seated in the Netherlands. The claimants in that separate arbitration are members of the Cairn Group of companies. I shall therefore refer to those claimants as Cairn, and to that arbitration as the Cairn Arbitration.
3 By this application, the plaintiff seeks two declarations as to Singapore's arbitration law. The declarations are intended to pave the way for the plaintiff to cross-disclose documents between the Vedanta Arbitration and the Cairn Arbitration. The two declarations are framed as follows:2
(a) a declaration that documents disclosed or generated in the Vedanta Arbitration are not "confidential or private"; and
(b) a declaration that the plaintiff will not breach any obligation of confidentiality or privacy if it were to disclose for the purposes of the Cairn Arbitration any of the documents which were disclosed or generated in the Vedanta Arbitration.
4 The plaintiff seeks these two declarations both cumulatively and in the alternative. The plaintiff seeks the first declaration to establish that the general obligation of confidentiality in Singapore's arbitration law does not extend to investment-treaty arbitration. If the plaintiff succeeds on the first declaration, the second declaration follows automatically, as it does no more than declare the effect of applying the first general declaration to the specific case of the Vedanta Arbitration. But if the first declaration fails, the second declaration does not automatically fall away. The plaintiff still seeks the second declaration in order to establish that cross-disclosure between the two arbitrations comes within an exception to the general obligation established on the first declaration.3 It is therefore necessary to consider both declarations in turn.
5 The defendant raises a preliminary question on the plaintiff's application. Its submission is that the application should be dismissed in limine because it amounts to an abuse of the process of the court or a collateral attack on a decision of the Vedanta tribunal, principally because the Vedanta tribunal has already decided upon the plaintiff's own application that that the general obligation of confidentiality in Singapore's arbitration extends to investment- treaty arbitration. In the alternative, if it fails on the preliminary question, the defendant submits that the court should not exercise its discretion to grant the declaratory relief which the plaintiff now seeks.
6 I have answered the preliminary question in favour of the plaintiff. I do not consider that the plaintiff's application to be either an abuse of process or an impermissible collateral attack on any decision of the Vedanta tribunal. But I have declined to exercise my discretion to grant the plaintiff the declaratory relief which it seeks, principally because I do not consider the declaratory relief to be either necessary or justified in the circumstances of this case.
7 I have accordingly dismissed the plaintiff's application. The plaintiff has appealed against my decision. I now set out my reasons.
The Cairn Group restructuring
8 In 2006, a group of companies known as the Cairn Group restructured its Indian assets. As part of that restructuring, a British company known as Cairn UK Holdings Ltd ("CUHL") transferred most of those assets to an Indian company known as Cairn India Limited ("CIL"). The Cairn Group carried out the restructuring by having CIL undergo an initial public offering ("IPO") in India and then use the proceeds to acquire the Cairn Group's Indian assets from CUHL through a series of share purchases and share swaps.
9 The plaintiff's position has always been that this restructuring is a tax abusive transaction and that the resulting capital gain of about US$3.9bn in CUHL's hands has been subject to Indian capital gains tax from 2006.
India issues assessment orders
10 Under Indian revenue law, the plaintiff is entitled to recover the tax which it claims to be due either from CUHL as a capital gains tax or from CIL as a withholding tax. In any event, neither company has paid the tax. The plaintiff has accordingly treated both CUHL and CIL as assessees-in-default since 2006.4
11 In 2011, the Cairn Group sold 100% of CIL to the defendant and its group of companies.
12 In 2015, the Indian revenue authorities issued a tax assessment order against CUHL and another against CIL (the "Assessment Orders").5
Commencement of the arbitrations
13 The Vedanta Arbitration and the Cairn Arbitration are the direct result of the Assessment Orders. The two arbitrations have a number of common features. Both arbitrations arise from the same underlying transaction. Both are brought under the bilateral investment treaty ("BIT") known as the Agreement between the Government of the Republic of India and the Government of the United Kingdom of Great Britain and Northern Ireland for the Promotion and Protection of Investments signed on 14 March 1994 ("India-UK BIT").6 Both are administered by the Permanent Court of Arbitration ("PCA"). Both are conducted in accordance with the United Nations Commission on International Trade Law Arbitration Rules 1976 ("UNCITRAL Rules").7
14 But, because CIL changed ownership in 2011, after the plaintiff alleges that the tax liability arose, the two arbitrations were commenced separately and have proceeded along different paths before different tribunals in different seats.
15 Cairn commenced arbitration against the plaintiff first, in September 2015. The Cairn Arbitration is seated in the Netherlands. Cairn's case is that the Assessment Order against CUHL is contrary to CUHL's legitimate expectations in 2006 that the Cairn Group's restructuring that year did not attract any liability for capital gains tax under Indian revenue law.8
16 The defendant commenced arbitration against the plaintiff in November 2015. The Vedanta Arbitration is seated in Singapore. The defendant's case in the arbitration is that it had a legitimate expectation in 2011 that the Cairn Group's restructuring in 2006 had not attracted any tax liability on a capital gain in the hands of CUHL.
Cairn Arbitration Procedural Order No. 10
Vedanta Arbitration Procedural Order No. 3
Vedanta Arbitration Procedural Order No. 6
Vedanta Arbitration Procedural Order No. 7
THE PRELIMINARY QUESTION
THE PARTIES’ CASES ON THE PRELIMINARY QUESTION
THE NATURE OF A PROCEDURAL ORDER
A tribunal is the master of its own procedure
A tribunal has the power to reconsider and revise a procedural order
Conclusion on procedural orders
ABUSE OF PROCESS AND COLLATERAL ATTACK
Declaratory relief in the context of arbitration
Investment-treaty arbitration and the Model Law
Arts 5 and 19 of the Model Law
(1) The plaintiff offers an undertaking
(2) Does this application concern a matter governed by the Model Law?
(3) Does the present application constitute an intervention by the court?
CONCLUSION ON THE PRELIMINARY QUESTION
THE DISCRETIONARY QUESTION
THE LAW ON CONFIDENTIALITY IN ARBITRATION
AMBIGUITY OR UNCERTAINTY
JUSTIFIED BY THE CIRCUMSTANCES OF THE CASE
The power of a tribunal to develop Singapore’s substantive common law
(1) The legal framework for an international investment-treaty arbitration
(2) A tribunal’s role
The power of a tribunal to develop Singapore’s common law of arbitration
Analytical approach of the Vedanta tribunal
Minimal curial intervention
CONCLUSION ON THE DISCRETIONARY QUESTION
Keywords: Arbitration, Confidentiality, Documents Arbitration, Confidentiality, Evidence used in other proceedings Arbitration, Interlocutory order or direction, Court's power Arbitration, Arbitral tribunal, Competence Arbitration, Conduct of arbitration, Preliminary issues Arbitration, Declaratory relief
Cairn Energy PLC and Cairn UK Holdings Limited v The Republic of India - PCA Case No 2016-07 - Award - 21 December 2020: