The Singapore High Court recently dismissed the applications made on behalf of Mr Harish Salve (the “Applicant“), a Senior Advocate of the India Bar, to be admitted to represent 20 plaintiffs (the “Sellers“) in their application(s) before the Singapore High Court to set aside an International Arbitration Award.

The law governing the ad hoc admission of foreign counsel to appear before the local courts is set out in section 15 of the Legal Profession Act (Cap. 161, 2009 Rev Ed) (the “Act“).

In short, the Honourable Justice Steven Chong (“Chong J“) found that it was not appropriate to admit the Applicant as:

• The Applicant had failed to show that, apart from his general expertise in Indian law, he had the requisite “special qualifications or experience” for the purposes of the specific issues in this case as required under section 15(1)(c) of the Act.

• Even if the Court had found that the Applicant possessed the “special qualifications or experience“, it would have (in considering the other grounds provided for under the Legal Profession (Ad Hoc Admissions) Notification 2012 (the “Notification Matters“)) dismissed the Applicant’s applications as:

The evidence on Indian law in the present case was not unusually complex or so difficult as to require the submissions of Indian counsel nor was it beyond the competence of local counsel;

In any event, it is not the complexity of specific issues that is of key relevance but the relevance of counsel’s qualifications and experience with those issues;

There is an adequate pool of local counsel capable of making submissions with the assistance of foreign legal experts (such experts can provide their opinion by way of expert reports and do not need to be admitted to make submissions); and

The Court did not find that its decision on admission would impact the setting aside applications and was not persuaded by the argument that the promotion of Singapore as a venue for international arbitration should be the dominant or “governing” reason for admission of foreign counsel.

Background

The underlying dispute concerns the Buyer’s purchase of shares held by the Sellers in a company incorporated in India (the “Company“).

The Buyer commenced SIAC arbitration proceedings in 2012 against the Sellers. On 29 April 2016, by a majority of 2-1, the Tribunal rendered the award in the Buyer’s favour.

The Tribunal found that the Sellers were liable for fraudulently misrepresenting and/or concealing from the Buyer the source and severity of the Company’s regulatory issues, and awarded the Buyer an amount in excess of USD 500 million.

The Sellers applied to the Singapore High Court – as the Court at the seat of the arbitration – to set aside the Final Arbitral Award (the “Setting Aside Applications“).

The Sellers’ Setting Aside Applications raised a number of grounds for setting aside and resisting enforcement of the Award. However, for the purposes of the Applicant’s application for admission, he sought only to address two grounds of Indian law, namely that:

• The Award contained decisions beyond the scope of submission to arbitration (the “Excess of Jurisdiction Challenge“) and

• The Award is contrary to the public policy of Singapore (the “Public Policy Challenge“).

The Excess of Jurisdiction Challenge essentially asserted that the Tribunal had awarded consequential damages which were expressly prohibited by the Arbitration Agreement and had erred in awarding a measure of damages:

• in contravention of the Indian Contract Act; and

• by erroneously relying on the Indian High Court decision of R C Thakkar v Gujarat Housing Board AIR 1973 Guj 34 (“R C Thakkar“).

In the Public Policy Challenge, the Sellers argued that:

• The Award is contrary to the public policy of Singapore because it is at root contrary to the most basic notions of morality and justice of Indian law;

• The Tribunal had purportedly erred in relying on the High Court decision in R C Thakkar when it had been overruled on appeal by the Indian Supreme Court (“R C Thakkar Supreme Court decision“).

Disputed Issues of Indian Law

Notably, the Buyer asserted that Indian law is irrelevant to the Setting Aside Applications as:

• The Arbitration Agreement, which the Sellers argued (in the Excess Jurisdiction Challenge) had been breached, was governed by Singapore law;

• The merits of the substantive issues in the arbitration, which were decided under Indian law, cannot be re-litigated; and

• Indian public policy is irrelevant to the Setting Aside Applications which were to be determined under Singapore law.

Chong J noted that issues of Indian law will have to be proved as an anterior question in the course of establishing the Sellers’ grounds of challenge in the Setting Aside Applications and found that the Sellers’ grounds of challenge did raise anterior questions of Indian law.

• In particular, Chong J noted that the Sellers and the Buyer had separately engaged distinguished Indian law experts who had already tendered their reports on the disputed foreign law issues in the Setting Aside Applications.

Significance

The case is unique in that:

• It is the first time a Senior Advocate from the India Bar has applied to the Singapore Supreme Court to be admitted as foreign counsel;

• The Court however noted that this does not in itself mean that the application would be treated any differently from applications involving Queen’s Counsel from the English Bar as the same regime under the Act governed all admissions;

•  The Applicant sought admission to argue some, but not all the issues arising in the underlying case and to address the court specifically on disputed issues of Indian law.

Notably, the Attorney-General supported the Applicant’s application for admission, urging the Court to (amongst other things) consider the public interest in enhancing Singapore’s attractiveness as a venue for international arbitration and find that the application for admission was reasonable.

On the other hand, the Singapore Law Society opposed the applications, asserting (amongst other things) that the requirements of the regime governing admissions had not been met as the Applicant had not established a sufficient nexus between his expertise and the issues in the Setting Aside Applications.

• The Law Society further submitted that the appropriate method to resolve disputes of foreign law was by cross-examination of the Indian law experts, rather than by way of submissions on Indian law by foreign counsel.

The Decision

In dismissing the applications, Chong J found that the Applicant had failed to satisfy the mandatory requirements of section 15 of the Act.

Much had been said of the Applicant’s past experience as counsel before the Supreme Court of India in the R C Thakkar Supreme Court decision and his role as lead counsel for certain Sellers in parallel enforcement proceedings commenced by the Buyer in India. However, in brief, Chong J concluded that:

• There was an insufficient nexus between the Applicant’s asserted expertise and the issues identified in the Setting Aside Applications;

• The Applicant’s ”general expertise in Indian law” did not equate to him having the requisite ”special qualifications or experience” necessary for the ad hoc admission of foreign counsel in this case;

• More significantly, Chong J’s decision appears to be influenced by the fact that the Sellers did not see fit to engage Indian lead counsel for the arbitration proceedings itself, which would have been the appropriate forum for the full merits of any Indian law issues to be fully ventilated;

• It follows that, if Singapore Senior Counsel could be instructed as lead counsel in the arbitration, there was even less of a reason for foreign counsel to be admitted in the instant case, when the disputed Indian law issues are merely of peripheral importance;

• Applications to set aside arbitral awards under the International Arbitration Act (Cap. 143A, 2002 Rev Ed) are governed under Singapore law, not foreign law; and

• On the face of the R C Thakkar Supreme Court Decision, there was no discussion on the appropriate measure of damages for fraudulent misrepresentation nor had it demonstrated that the Applicant had previously argued this specific issue before the Indian Supreme Court.

Comment

• As Chong J noted, foreign law must be proved either by directly adducing “raw sources of foreign law” as evidence or by providing the opinion of foreign law experts.

• In contrast with the Singapore International Commercial Court (SICC), where foreign law may be determined on the basis of submissions instead of proof, the general regime is that this should be addressed by way of local counsel’s submissions with the support of expert law reports.

• Notably, the Court had previously invited the Sellers to consider applying for the cross-examination of the parties’ foreign law experts to assist the Court in reaching a finding on the disputed Indian law issues. However, the Sellers had declined and opted to pursue their applications for the Applicant’s admission.

• Chong J’s decision demonstrates the need for local courts to strike the right (and sometimes delicate) balance between taking a pro-arbitration stance and maintaining the integrity of the courts and their confidence in the competence of local counsel.

• The Court’s usual emphasis is on ”need” and it will not easily admit foreign counsel unless a litigant is able to prove that he is likely to be ”substantially prejudiced in the conduct of his case if he were precluded from retaining foreign counsel”.

• Whilst the Singapore courts have traditionally taken a pro-arbitration stance and Singapore’s promotion as an international arbitration hub is of importance, the Singapore courts are unlikely to value this as the dominant or “governing” reason for the admission of foreign counsel before the local courts, particularly if the effect of such a concession would be to allow the admission of foreign counsel for any and all arbitration-related proceedings.

*With thanks to Lakshanthi Fernando.