Curial Review on Questions of Law: A Desirable Move for Singapore

The Singapore Ministry of Law has been considering the introduction of a mechanism to allow parties to opt-in to appeals on questions of law for international arbitration. This article examines the desirability of such a development and concludes that an opt-in mechanism not only coheres with the fundamental principles underlying international arbitration but also furthers Singapore’s attractiveness as an international arbitration hub. It further suggests that some potential challenges of introducing the appeal mechanism should be pre-empted. 

Introduction

In a bid to develop Singapore’s attractiveness as an arbitration hub to meet the evolving needs of commercial parties,¹Singapore Ministry of Law website, Public Consultation on International Arbitration Act, <https://app.mlaw.gov.sg/news/public-consultations/public-consultation-on-international-arbitration-act> (accessed 28 October 2019), at (2)–(3). the Ministry of Law has been considering introducing an opt-in mechanism to the Singapore International Arbitration Act²Singapore International Arbitration Act (Chapter 143A, 2002 Rev ed). allowing parties to international arbitrations to appeal arbitral awards on questions of law.³Singapore Ministry of Law website, Public Consultation on International Arbitration Act, <https://app.mlaw.gov.sg/news/public-consultations/public-consultation-on-international-arbitration-act> (accessed 28 October 2019), at (11)–(13). If such an appeal is made, the impugned award may be set aside, varied, remitted to the tribunal or confirmed by the Court.⁴Id, Appendix A, s 24(7). A mechanism to appeal on questions of law are commonplace in domestic arbitration for the major arbitral jurisdictions, including Singapore.⁵Chinyere Ezeoke, “Challenging arbitral awards on the question of law in Malaysia: is it gone for good?” (2019) 22(2) International Arbitration Law Review 56, at p. 56.

However, this is less so in international arbitrations. The opt-out regime of appeals on questions of law from international arbitral awards, in the United Kingdom (UK) for instance, has sometimes been regarded as a pariah by the international arbitration community.⁶Robert Finch, “London: still the cornerstone of international commercial arbitration and commercial law?” (2004) 70 Arbitration 256, at p. 261. Such appeals are also available in Hong Kong and New Zealand but only on an opt-in basis.⁷Hong Kong Arbitration Ordinance (Cap. 609), Schedule 2, s 5; 1996 New Zealand Arbitration Act, Schedule 2, s 5. The prevailing view seems to discourage appeals on questions of law in view of an arbitration’s promise of finality. This could be because of the pro-enforcement bias of the New York Convention⁸New York Convention, 330 U.N.T.S., No. 4739 (1958). and UNCITRAL Model Law⁹United Nations Commission on International Trade Law, UNCITRAL Model Law on International Commercial Arbitration 1985: with amendments as adopted in 2006 (Vienna: United Nations, 2008). which intentionally narrowly limited the options to challenge an arbitral award.¹⁰’Chapter 10. Challenge of Arbitral Awards’, in Blackaby Nigel, Constantine Partasides et al., Redfern and Hunter on International Arbitration, 6th edition (Oxford University Press, 2015) 569, at (10.03). For instance, Article 5 of the Model Law emphasises the policy of non-interference by courts except as provided under the Model Law.¹¹United Nations Commission on International Trade Law, UNCITRAL Model Law on International Commercial Arbitration 1985: with amendments as adopted in 2006 (Vienna: United Nations, 2008), Art 5. As was presciently said before, “there is a never ending war between two irreconcilable principles, the high principle which demands justice though the heavens fall, and the low principle, which demands that there should be end to litigation”.¹²Robert Finch, “London: still the cornerstone of international commercial arbitration and commercial law?” (2004) 70 Arbitration 256, at p. 262; Francis Russell, Russell on the Law of Arbitration (Stevens, 1982).

This article posits that appeals on questions of law should be introduced in Singapore for international arbitrations. Not only would this development be in line with the fundamental principles underlying international commercial arbitration, it also benefits Singapore’s goals to become a more attractive international commercial arbitration hub. Further, it suggests that potential practical challenges of introducing the appeal mechanism should be pre-empted.

Consistency with Fundamental Principles of Arbitration

There are two leading theories of international arbitration.¹³Gary Born, International Commercial Arbitration (Kluwer Law International, 2^nd Ed, 2014), at p. 214. First, the contractual relations theory that regards the parties’ arbitration agreement as the source of the tribunal’s powers and places primary emphasis on the role of party autonomy.¹⁴Gary Born, International Commercial Arbitration (Kluwer Law International, 2^nd Ed, 2014), at p. 214. Second, the jurisdictional theory advancing that even though arbitration is essentially independent and impartial adjudication, it is still given power by the national law of the arbitral seat which may limit parties’ autonomy.¹⁵Gary Born, International Commercial Arbitration (Kluwer Law International, 2^nd Ed, 2014), at p. 215. The better view is that while arbitration is a hybrid of both theories, it is also sui generis and designed to achieve a particular set of objectives.¹⁶Gary Born, International Commercial Arbitration (Kluwer Law International, 2^nd Ed, 2014), at p. 217. These objectives include a procedurally flexible process and an internationally-enforceable dispute resolution decision that is neutral, confidential and final.¹⁷Gary Born, International Commercial Arbitration (Kluwer Law International, 2^nd Ed, 2014), at p. 72.

Allowing an opt-in appeal mechanism on questions of law for parties to an international arbitration is consistent with the both theories of international arbitration and does not undermine the valued objectives of international arbitration.

First, the opt-in basis of this mechanism is consistent with party autonomy and procedural flexibility according to the contractual theory. Party autonomy means giving parties the paramount freedom to agree on the substantive laws and procedures for their commercial arbitrations.¹⁸Gary Born, International Commercial Arbitration (Kluwer Law International, 2^nd Ed, 2014), at p. 84. This freedom to decide the manner of dispute resolution is a basic aspect of individual liberty which is properly accorded protection in almost all developed legal systems.¹⁹Gary Born, International Commercial Arbitration (Kluwer Law International, 2^nd Ed, 2014), at p. 132. The fundamental principle of party autonomy has often been used to justify judicial non-intervention in arbitration.²⁰Tjong Very Sumito and others v Antig Investments Pte Ltd (2009) 4 SLR 732, at (28). This purportedly favours finality and militates away from judicial review.²¹’Chapter 10. Challenge of Arbitral Awards’, in Blackaby Nigel, Constantine Partasides et al., Redfern and Hunter on International Arbitration, 6th edition (Oxford University Press, 2015) 569, at (10.67). However, an opt-in mechanism for an appeal on a question of law in fact accords with party autonomy insofar as parties are given a real choice to decide if they wish for questions of law arising in their arbitrations to be appealable.²²Robert Finch, “London: still the cornerstone of international commercial arbitration and commercial law?” (2004) 70 Arbitration 256, at p. 262. Where parties agree to a mechanism of appellate review that is suited to their particular needs, it should be given full effect to.²³Gary Born, International Commercial Arbitration (Kluwer Law International, 2^nd Ed, 2014), at p. 3162. For instance, parties can have access to appellate review provided by certain arbitral institutions.²⁴Noam Zamir and Peretz Segal, “Appeal in International Arbitration – an efficient and affordable appeal mechanism” (2019) 35 Arbitration International 79, at p. 87. There is no reason why national legal systems should not be able to offer that same service with arguably more expertise in their national law.

Second, the substantive justice of allowing the option of appeals on questions of law accords with the jurisdictional analysis. Some take the view that “if you choose to go to Caesar, you must take Caesar’s judgement”.²⁵African & Eastern (Malaya) Ltd v White, Palmer & Co Ltd (1930) 36 LI L. Rep 113, at p. 114. However, arbitration cannot just be a matter of contract because arbitrators ultimately plays the important function of judicial decision-making between the parties.²⁶Chinyere Ezeoke, “Challenging arbitral awards on the question of law in Malaysia: is it gone for good?” (2019) 22(2) International Arbitration Law Review 56, at p. 67; David Williams, “Defining the Role of the Court in Modern International Commercial Arbitration” (2014) 10 Asia International Arbitration Journal 137. States have an interest to ensure the legitimacy of the arbitral process.²⁷Chinyere Ezeoke, “Challenging arbitral awards on the question of law in Malaysia: is it gone for good?” (2019) 22(2) International Arbitration Law Review 56, at p. 67; David Williams, “Defining the Role of the Court in Modern International Commercial Arbitration” (2014) 10 Asia International Arbitration Journal 137. Power without checks and balances invites arbitrary decision-making.²⁸Guilherme Rizzo Amaral, “Judicial precedent and arbitration – are arbitrators bound by judicial precedent? A comparative study among England, Scotland, the United States and Brazil”, in João Bosco Lee and Daniel de Andrade Levy (eds), Revista Brasileira de Arbitragem, (Kluwer Law International 2017, Volume XIV Issue 56) 49, at p. 68. Having no recourse to appeals necessarily means accepting that erroneous decisions will remain uncorrected.²⁹Robert Finch, “London: still the cornerstone of international commercial arbitration and commercial law?” (2004) 70 Arbitration 256, at p. 264. As distinct from factual findings made by the arbitrators which should be accorded the deference accorded to a trial judge, it is questionable why questions of the law should be treated in the same manner.³⁰Chinyere Ezeoke, “Challenging arbitral awards on the question of law in Malaysia: is it gone for good?” (2019) 22(2) International Arbitration Law Review 56, at p. 67. Since legal questions are determined in arbitrations by arbitrators who may not be legal experts,³¹Robert Finch, “London: still the cornerstone of international commercial arbitration and commercial law?” (2004) 70 Arbitration 256, at p. 265. there is a significant risk of legal errors. There is also no empirical backing to suggest that arbitrating parties necessarily accept that arbitrators could make mistakes of law.³²Chinyere Ezeoke, “Challenging arbitral awards on the question of law in Malaysia: is it gone for good?” (2019) 22(2) International Arbitration Law Review 56, at p. 68. Parties would reasonably expect that the tribunal would understand the law and apply it correctly instead of inventing or distorting the law.³³Home Insurance Co Ltd v Mentor Insurance Co (UK) Ltd (1989) 3 All E.R. 74, at p. 80. Since many arbitration agreements are now incorporated by standard terms,³⁴Robert Finch, “London: still the cornerstone of international commercial arbitration and commercial law?” (2004) 70 Arbitration 256, at p. 264. parties may not be aware of their submissions to arbitrations. They may not even have consciously considered the possibility that arbitrators could make mistakes of law. Arguably, a tribunal that makes a mistake of law will not be carrying out the parties’ agreement to have the dispute resolved in accordance with the parties’ chosen law.³⁵Robert Finch, “London: still the cornerstone of international commercial arbitration and commercial law?” (2004) 70 Arbitration 256, at p. 262. This is reflected by conflicting jurisprudence from the United States where some courts have acknowledged that an arbitrator’s manifest disregard of the law may allow court review despite the lack of an explicit statutory ground allowing this.³⁶Guilherme Rizzo Amaral, “Judicial precedent and arbitration – are arbitrators bound by judicial precedent? A comparative study among England, Scotland, the United States and Brazil”, in João Bosco Lee and Daniel de Andrade Levy (eds), Revista Brasileira de Arbitragem, (Kluwer Law International 2017, Volume XIV Issue 56) 49, at p. 61. A limited right of appeal on questions of law will support the legitimacy of the arbitral process by instilling confidence that arbitration is safeguarded by the courts.³⁷The Hon. Justice Clyde Croft, “Judicial Intervention in the Asia-Pacific Region”, accessed at <https://www.supremecourt.vic.gov.au/about-the-court/speeches/judicial-intervention-in-the-asia-pacific-region> at p. 6.

Third, an opt-in mechanism for appeals on questions of law will not undermine the objectives of international arbitration. On the perceived threat to finality, this mechanism simply allows parties to choose with precision the degree of finality they would like.³⁸Singapore Ministry of Law website, Public Consultation on International Arbitration Act, <https://app.mlaw.gov.sg/news/public-consultations/public-consultation-on-international-arbitration-act> (accessed 28 October 2019), at (12). In fact, the losing party without any options of appeal often seeks radical stratagems to apply for setting-aside or defend against enforcement.³⁹Noam Zamir and Peretz Segal, “Appeal in International Arbitration – an efficient and affordable appeal mechanism” (2019) 35 Arbitration International 79, at p. 84. Such finality is in fact overrated. As recognised by Lord Atkin, “finality is a good thing, but justice is better”.⁴⁰Ras Behari Lal v The King-Emperor (1933) 50 T.L.R. 1, at p. 4. By not offering an opt-in mechanism, the current position binds parties to accept the finality of an award notwithstanding the clear possibility that arbitrators may be wrong on the law. The certainty of decisions may improve with this added option since the risk of inconsistent decisions by tribunals will likely decrease with the potential of having the award appealed on a question of law.⁴¹Blackaby Nigel, Constantine Partasides et al, Redfern and Hunter on International Arbitration (Kluwer Law International; Oxford University Press 2015), at (10.66). While there is a fear that such an appeal process may be misused by postponing the due date of payment⁴²Blackaby Nigel, Constantine Partasides et al, Redfern and Hunter on International Arbitration (Kluwer Law International; Oxford University Press 2015), at (10.67). or be being a means to relitigating the merits,⁴³Stephen Wills Murphy, “Judicial Review of Arbitration Awards under State Law” (2010) 96 Virginia Law Review 887, at p. 914; SIGNAL Corp. v. Keane, Fed. Sys., 574 S.E.2d 253, 257 (Va. 2003). the appeal process may actually improve the award’s execution. After the dissatisfied party had lost the appeal, he would be less inclined to spend additional costs contesting enforcement or attempting to set aside the award.⁴⁴Noam Zamir and Peretz Segal, “Appeal in International Arbitration – an efficient and affordable appeal mechanism” (2019) 35 Arbitration International 79, at p. 85. The strict timeline requiring an appeal within 28 days⁴⁵Singapore Ministry of Law website, Public Consultation on International Arbitration Act, <https://app.mlaw.gov.sg/news/public-consultations/public-consultation-on-international-arbitration-act> (accessed 28 October 2019), Appendix A, s 24B(3). can also alleviate efficiency concerns significantly. Concerns regarding the preservation of confidentiality are also not insurmountable. Notwithstanding the fact that confidentiality is often illusory since the markets tends to find out easily about arbitrations,⁴⁶Lord Thomas, “Developing Commercial Law through the Courts: Rebalancing the Relationship between the Courts and Arbitration”, Bailii Lecture, accessed at < https://www.bailii.org/bailii/lecture/04.pdf>, at (38). the judgements can be redacted to protect the identities of parties and confidential information can be removed.⁴⁷The Law Reform Commission of Hong Kong, 1981 Report on Commercial Arbitration, accessed at < https://www.hkreform.gov.hk/en/publications/rcarbitration.htm>, at (10.8). Further, the court may allow “private hearings” in camera.⁴⁸Robert Finch, “London: still the cornerstone of international commercial arbitration and commercial law?” (2004) 70 Arbitration 256, at p. 264. The addition of the opt-in mechanism will not undermine the value provided by international arbitration but instead supplement it.

Potential benefits to Singapore

Allowing an opt-in mechanism for appeal on questions of law is also desirable because it increases the possibility of Singapore law’s autochthonous development and promotes Singapore as a more attractive dispute resolution hub.

Appeals on questions of law will facilitate the development of Singapore law. Presumably, following the English position,⁴⁹Arbitration Act 1996 (United Kingdom), s 82(1) which defines “question of law” as English law or Northern Ireland law for the respective courts. the opt-in mechanism will be restricted to questions of Singapore law. Given Singapore’s ambition to promote Singapore law as the law of choice for international business,⁵⁰Goh Yihan and Paul Tan, “An Empirical Study of the Development of Singapore Law” (2011) 23 SAcLJ 176, at (64), (70) and (101). this option provides an avenue for novel questions of law to be resolved by the Singapore courts authoritatively. Since many disputes over standard form contracts are resolved by arbitration,⁵¹Robert Finch, “London: still the cornerstone of international commercial arbitration and commercial law?” (2004) 70 Arbitration 256, at p. 263. such contested provisions could be appealed and a clearly reasoned judgment would allow market actors to better understand the state of the law and organise their business affairs accordingly.⁵²Lord Thomas, “Developing Commercial Law through the Courts: Rebalancing the Relationship between the Courts and Arbitration”, Bailii Lecture, accessed at < https://www.bailii.org/bailii/lecture/04.pdf>, at (11). Further, this would allow people and markets to debate, develop and contest the development of commercial law.⁵³Lord Thomas, “Developing Commercial Law through the Courts: Rebalancing the Relationship between the Courts and Arbitration”, Bailii Lecture, accessed at < https://www.bailii.org/bailii/lecture/04.pdf>, at (49). The English approach to allowing appeals on questions of law has not assuaged concerns regarding the reduced potential for the development of the common law (as more and more disputes are resolved by arbitration).⁵⁴Lord Thomas, “Developing Commercial Law through the Courts: Rebalancing the Relationship between the Courts and Arbitration”, Bailii Lecture, accessed at < https://www.bailii.org/bailii/lecture/04.pdf>, at (22). As compared to the UK, Singapore has a comparatively smaller “pool”
of commercial disputes through which Singapore law can be developed. Accordingly, the rationale for allowing appeals on questions of law as described above would apply with greater force to Singapore.

The opt-in mechanism is likely to make Singapore a more desirable dispute resolution hub for international arbitration. The majority of arbitration users that support the lack of appellate review is shrinking.⁵⁵Noam Zamir and Peretz Segal, “Appeal in International Arbitration – an efficient and affordable appeal mechanism” (2019) 35 Arbitration International 79, at p. 86. In fact, 17 per cent of respondents considered the “lack of appeal mechanism on the merits” one of the three worst characteristics of international arbitration.⁵⁶Queen Mary School of International Arbitration and White & Case, 2015 International Arbitration Survey: Improvements and Innovations in International Arbitration (QMUL 2015), at p. 7. While catering to commercial parties who are attracted to the idea of ensuring the legal correctness of an arbitral award, the opt-in mechanism does not change the position for parties who do not wish to have such appellate review. Even though the availability of appeals on questions of law is on an opt-out basis in London, London has remained consistently one of the top five most preferred arbitral locations for many years.⁵⁷Queen Mary School of International Arbitration and White & Case, 2018 International Arbitration Survey: The Evolution of International Arbitration (QMUL 2018), at p. 9. New Zealand, allowing appeals on an opt-in basis or by leave of court, has seen about 68 applications for appeals on questions of law over 11 years.⁵⁸Davies & Alexander, “Appeals on Questions of Law – a New Zealand Perspective” (2018) Bankside Chambers, accessed at <https://johnwalton.co.nz/musings/appeals-on-questions-of-law—a-new-zealand-perspective> (30 December 2019). Although it is generally perceived that parties opting for international arbitration tend to wish to avoid the intervention of national courts,⁵⁹Noam Zamir and Peretz Segal, “Appeal in International Arbitration – an efficient and affordable appeal mechanism” (2019) 35 Arbitration International 79, at p. 84. this may not be necessarily true in all circumstances. After all, Singapore’s attractiveness as a dispute resolution hub stems from its pro-arbitration judiciary that provides effective and efficient judicial services to all.⁶⁰Chief Justice Chan Sek Keong, Speech at Conference on International Investment Arbitration, 20 January 2010, accessed at < https://www.supremecourt.gov.sg/docs/default-source/default-document-library/media-room/cj-welcome-remarks-at-conference-on-international-investment-arbitration-20-jan-2010.pdf> , at (11). The Singapore courts enjoy a robust reputation for impartiality in relation to commercial law.

In sum, the mechanism of allowing an appeal of law potentially benefits Singapore’s attractiveness as an ideal seat and allows for greater development of Singapore commercial law. This, in turn, may have a positive knock-on effect of increasing the attractiveness of Singapore law as the governing law for international contracts.

Pre-empting Practical Challenges of the Appeal Mechanism

Notwithstanding the principled basis of introducing the opt-in mechanism and its desirability for Singapore’s prospects, the eventual success of any proposal is often determined by its ability to navigate the practical challenges faced with a new development. It is submitted that the current proposal may be improved upon.

First, the appropriate threshold of hearing appeals should be reconsidered. The draft Section 24A(4) stipulates requirements⁶¹Singapore Ministry of Law website, Public Consultation on International Arbitration Act, <https://app.mlaw.gov.sg/news/public-consultations/public-consultation-on-international-arbitration-act> (accessed 28 October 2019), at Appendix A. that are in pari materia with section 69(3) of the United Kingdom Arbitration Act 1996.⁶²Arbitration Act 1996 (c 23) (UK), s 69(3). For leave to appeal on a question of law arising from an arbitral award, the decision of the tribunal must be obviously wrong or the question of law must be of general public importance and the decision of the tribunal is at least open to serious doubt.⁶³Singapore Ministry of Law website, Public Consultation on International Arbitration Act, <https://app.mlaw.gov.sg/news/public-consultations/public-consultation-on-international-arbitration-act> (accessed 28 October 2019), at Appendix A, Art 24A(4)(c). Presumably, the provision would be interpreted in the same manner in light of the existing jurisprudence in the UK. However, the UK position adopts a very strict threshold before an appeal on a question of law can be brought as a result of the historical development of its arbitration law.⁶⁴Lord Thomas, “Developing Commercial Law through the Courts: Rebalancing the Relationship between the Courts and Arbitration”, Bailii Lecture, accessed at < https://www.bailii.org/bailii/lecture/04.pdf>, at (19)–(20). The UK started off with the premise that the courts should intervene if the arbitrator failed to apply the law correctly.⁶⁵Agustin R Spotorno, “Arbitration and the development of English law” (2019) 85(2) Arbitration 106, at p. 109. Following the mis-use of the system in the 1970s with questions of law with little or no importance which was perceived to affect the popularity of London as a seat of arbitration,⁶⁶Agustin R Spotorno, “Arbitration and the development of English law” (2019) 85(2) Arbitration 106, at pp. 109-112. there was a radical change in the UK’s position.⁶⁷Lesotho Highlands Development Authority (Respondents) v. Impregilo SpA and others (Appellants) (2005) UKHL 43, at (17). As encapsulated in the current position, parties are assumed to have taken the risk of not having substance justice in pursuit of the benefits of party autonomy, speed and finality.⁶⁸Agustin R Spotorno, “Arbitration and the development of English law” (2019) 85(2) Arbitration 106, at p. 111. Crucially, the UK’s mechanism is on an opt-out basis so the need for a very high threshold is justifiable.

In contrast, Singapore’s mechanism is on an opt-in basis instead. The philosophy behind the UK position is no longer appropriate since parties here would have addressed their mind to the question and expressly chosen to subject their award to the review of the courts. In this case, the premise underlying the UK’s high threshold should not hold. It must be noted that Section 5 of Schedule 2 of the Hong Kong’s Arbitration Ordinance also contains the same requirements as the UK, despite having an opt-in mechanism as well.⁶⁹Hong Kong Arbitration Ordinance (Cap. 609), Schedule 2, s 5, s 6(4). Even then, Hong Kong’s position has met the same criticism of stultifying the development of Hong Kong’s common law regime.⁷⁰Edward Liu, “Is the Right to Appeal Appealing to the Commercial World?”, Hong Kong Lawyer, accessed at < http://www.hk-lawyer.org/content/right-appeal-appealing-commercial-world> (29 October 2019). Similarly, there has been strong arguments put forth that the UK should rebalance the relationship between courts and arbitration by allowing a lower threshold of appeals on questions of law.⁷¹Lord Thomas, “Developing Commercial Law through the Courts: Rebalancing the Relationship between the Courts and Arbitration”, Bailii Lecture, accessed at < https://www.bailii.org/bailii/lecture/04.pdf>, at (48)–(49). As such, Singapore could be a trail blazer in the international arbitration community by adopting a justifiably lower threshold on allowing appeals on questions of law. A lower threshold could simply require the arbitral tribunal’s decision to be at least in serious doubt. Even though it is on an opt-in basis, parties should not be allowed to appeal any question of law since this would unnecessarily open the floodgates of frivolous litigation. While a lower threshold encourages more appeals on questions of law, this would not necessarily open the floodgates. If the UK’s opt-out mechanism only sees between 40 to 60 applications to appeal on questions of law each year,⁷²Commercial Court User’s Group Meeting Report (2018), Judiciary of England and Wales, < https://www.judiciary.uk/wp-content/uploads/2018/04/commercial-court-users-group-report.pdf> (2 November 2019). the introduction of an opt-in mechanism in a smaller market like Singapore is unlikely to face such a problem.

Second, the legislature should include an explanatory note determining the ambit of “questions of law”. Preliminary, the term should be defined as questions of Singapore law since it would not be ideal for the Singapore Court to act as an appellate court on issues of foreign law. This is currently not addressed in the draft provisions. Generally, it is the arbitrator’s decision on the particular legal principle to be applied from statutes or common law that should be reviewed.⁷³Guilherme Rizzo Amaral, “Judicial precedent and arbitration – are arbitrators bound by judicial precedent? A comparative study among England, Scotland, the United States and Brazil”, in João Bosco Lee and Daniel de Andrade Levy (eds), Revista Brasileira de Arbitragem, (Kluwer Law International 2017, Volume XIV Issue 56) 49, at p. 67. A misapplication of the law to the facts also does not fall within the ambit of a question of law.⁷⁴Guilherme Rizzo Amaral, “Judicial precedent and arbitration – are arbitrators bound by judicial precedent? A comparative study among England, Scotland, the United States and Brazil”, in João Bosco Lee and Daniel de Andrade Levy (eds), Revista Brasileira de Arbitragem, (Kluwer Law International 2017, Volume XIV Issue 56) 49, at 66. Errors such as identifying binding law without any basis⁷⁵Guilherme Rizzo Amaral, “Judicial precedent and arbitration – are arbitrators bound by judicial precedent? A comparative study among England, Scotland, the United States and Brazil”, in João Bosco Lee and Daniel de Andrade Levy (eds), Revista Brasileira de Arbitragem, (Kluwer Law International 2017, Volume XIV Issue 56) 49, at p. 67. or completely disregarding binding authority⁷⁶The Amstelmolen (1961) 2 Lloyd’s Rep 1. would show an error on the law. Statutory interpretation is an example of a question of law,⁷⁷Teal Cedar Products v British Columbia (2017) SCC 32, at (3), (47). which is consistent with furthering the public interest to have a correct and consistent statutory interpretation applied in law.⁷⁸Andrew D Little, “The Appeal in Teal: Challenging Arbitration Awards in Canada”, Bennett Jones Blog, accessed at < https://www.bennettjones.com/Blogs-Section/The-Appeal-in-Teal> (29 October 2019).

A main controversy lies in whether “questions of law” would include questions of mixed fact and law. Legal questions generally ask “what the correct legal test is” and mixed questions concern “applying a legal standard to a set of facts”.⁷⁹Teal Cedar Products v British Columbia (2017) SCC 32, at (49). The distinction between them is a fine one.⁸⁰Ipoh Towers Sdn Bhd v Taki Engineering Sdn Bhd (2016) 1 L.N.S. 874 at (70). This is significant because a tribunal’s factual findings is not reviewable by the court even if it is questionable or wrong.⁸¹Guilherme Rizzo Amaral, “Judicial precedent and arbitration – are arbitrators bound by judicial precedent? A comparative study among England, Scotland, the United States and Brazil”, in João Bosco Lee and Daniel de Andrade Levy (eds), Revista Brasileira de Arbitragem, (Kluwer Law International 2017, Volume XIV Issue 56) 49, at p. 66. For instance, the interpretations of contractual provisions present a particularly difficult problem. Contractual interpretation is generally recognised as a question of law.⁸²Thorner v Major (2009) UKHL 18, at (58). This is historically justified on the understanding that the determination of legal rights and obligations in a contract was a matter of law.⁸³Teal Cedar Products v British Columbia (2017) SCC 32, at (43). However, some courts also recognise that contractual interpretation can also be seen as a question of mixed fact and law since it clearly concerns the application of contractual principles to the factual matrix of the words in the parties’ contracts.⁸⁴Teal Cedar Products v British Columbia (2017) SCC 32, at (50). Under the latter approach, some allowance is made for extricable question of law such as “the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor”.⁸⁵Teal Cedar Products v British Columbia (2017) SCC 32, at (53). Since there are often differing interpretations given to contractual clauses, the arbitrator’s decision over one approach in interpretation generally cannot be a ground for challenge in the courts.⁸⁶Govt of India v Cairns Energy India Pty Ltd (2011) 6 M.L.J. 441 at (52). However, the arbitrator must keep within a reasonable range of acceptable conclusions even when choosing between competing interpretations and may be subject to review if the arbitrator does not.⁸⁷Chain Cycle Sdn Bhd v Kerajaan Malaysia (2016) 1 C.L.J. 218 at (23); Majorboom Ltd v NationalHousing Building Council (2008) EWHC 2672 (TCC) at (8); Chinyere Ezeoke, “Challenging arbitral awards on the question of law in Malaysia: is it gone for good?” (2019) 22(2) International Arbitration Law Review 56, at p. 65. The better view is that “questions of law” should include questions of mixed law and fact such as contractual interpretation because of the compelling need to guard against the decisions made without regard to the chosen law of the parties at all.⁸⁸Chinyere Ezeoke, “Challenging arbitral awards on the question of law in Malaysia: is it gone for good?” (2019) 22(2) International Arbitration Law Review 56, at pp. 64–65. By simply ensuring that the arbitrator’s decision remains within the boundaries of permissible interpretations, the court’s review does not overly intrude into the arbitrator’s decision-making power but yet keeps it within check.

Conclusion

In a nutshell, this paper argues for the desirability of Singapore’s introduction of a mechanism for an appeal on a question of law. This mechanism is justified since the opt-in basis accords with party autonomy to choose the precise degree of court oversight over their arbitration process. Consequently, the countervailing considerations such as finality, certainty and efficiency take a back seat when balanced against the parties’ intention to ensure that the arbitral tribunal’s award is made correctly in their chosen law. From a policy perspective, this mechanism is likely to strengthen the development of Singapore commercial law as the best choice to govern commercial affairs. Additionally, Singapore will retain its competitiveness as an ideal arbitration seat because this mechanism caters to the increasingly conscious parties who may consider the legal correctness of an arbitral decision a desirable quality. However, an unnecessarily high threshold of allowing leave to apply in the context of an opt-in mechanism should be cautioned against and a pre-emptive explanatory note should be provided to scope the meaning of a “question of law”. If Singapore goes down this path, one could expect the promulgation of model clauses for parties to opt-in to the mechanism in their arbitration agreements.

The author is grateful to Associate Professor of Law (Practice), Darius Chan for his helpful comments. All errors remain the author’s.

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