The dispute involved DJO, a government-owned freight railway company, and Consortium X, a partnership of two Indian firms and one Japanese company. The contention arose over additional labor costs linked to a governmental notification affecting the Western Dedicated Freight Corridor project. After unsuccessful attempts at resolution, the matter proceeded to arbitration.
The arbitral tribunal, chaired by a retired Indian judge, issued an award in November 2023 favoring Consortium X. However, DJO challenged this decision, highlighting that more than 200 of the award's 451 paragraphs were directly copied from two earlier rulings in separate cases involving similar parties but distinct issues. Consortium X acknowledged the extent of the duplication.
International Judge Simon Thorley of the SICC reviewed the case and determined that the tribunal's reliance on extensive verbatim sections from previous awards compromised the integrity of the arbitration process. He noted that the tribunal failed to independently assess the unique facts and arguments of the current dispute, thereby violating principles of natural justice and creating an impression of bias.
Judge Thorley emphasized that while reusing portions of prior judgments is not inherently improper, the wholesale adoption of significant segments without due consideration to the specific context of the present case is unacceptable. He stated that such practices undermine the credibility of the arbitration process and the impartiality expected of arbitrators.
The SICC's decision to set aside the award underscores the importance of thorough and individualized analysis in arbitration proceedings. Legal experts suggest that this ruling serves as a cautionary tale for arbitrators, highlighting the necessity of maintaining rigorous standards to ensure fairness and impartiality in their deliberations.