Vedanta Resources plc v. India, UNCITRAL (UK BIT claim)

Case summary

At a glance

Parties: Vedanta Resources plc (United Kingdom) v. the Republic of India
Forum and rules: Investment-treaty arbitration administered by the PCA under the UNCITRAL Arbitration Rules 1976, seated in Singapore
Treaty: India–UK BIT of 14 March 1994
Court: High Court of the Republic of Singapore, Originating Summons No 980 of 2018, [2020] SGHC 208
Judge: Vinodh Coomaraswamy J
Sector: Oil and gas; taxation (capital gains tax)
Outcome: On 8 October 2020 the Singapore High Court dismissed India's application for declarations that documents from the Vedanta arbitration were not confidential and could be disclosed in the Cairn arbitration. India appealed.
Amount: India was ordered to pay Vedanta's costs of the application, fixed at $50,000 plus disbursements.

The dispute

In 2006 the Cairn Group restructured its Indian assets: Cairn UK Holdings Ltd (CUHL) transferred them to Cairn India Limited (CIL). India treats this as a tax-abusive transaction that produced a capital gain of about US$3.9bn taxable in India. In 2011 Vedanta and its group bought 100% of CIL. In 2015 the Indian revenue authorities issued assessment orders against CUHL and CIL. Vedanta started arbitration under the India–UK BIT in November 2015, seated in Singapore. It claimed that in 2011 it had a legitimate expectation that the 2006 restructuring had attracted no tax liability. Cairn brought a separate arbitration under the same BIT, seated in the Netherlands. The only substantive published decision is a Singapore court judgment on whether India could share documents from the Vedanta arbitration with the Cairn arbitration ("cross-disclosure").

Key holdings

Preliminary question decided for India. Its application for declarations was neither an abuse of process nor a collateral attack on the Vedanta tribunal's procedural orders. Procedural orders have no finality, create no issue estoppel, and the tribunal may reconsider and revise them before its final award. ¶¶ 41, 48–50, 99–101
The declarations sought concern confidentiality under substantive Singapore common law. Confidentiality is not a matter governed by the Model Law under Art 5. India had undertaken to take any declaration back to the tribunal rather than act on it alone, so granting one would not be an intervention in the arbitration. ¶¶ 79–82, 91–93
Obiter: on the binding authority of Swissbourgh v Lesotho, investment-treaty arbitration is "international commercial arbitration" within Art 1(1) of the Model Law. ¶¶ 65–69
Two requirements for declaratory relief were met. Whether the general obligation of confidentiality extends to investment-treaty arbitration is an arguably novel question, so there was real uncertainty. The question was not moot, because neither tribunal had issued its final award and the documents might be needed in post-award litigation. ¶¶ 115–126
A tribunal seated in Singapore may ascertain and develop Singapore's common law, including its common law of arbitration, where it must do so to decide the dispute. The Vedanta tribunal therefore acted within its powers in Procedural Order No. 3, when it held that the obligation of confidentiality applies to investment-treaty arbitration subject to a case-by-case exception. ¶¶ 144, 154–162
Discretion refused. Singapore law was only one of three sources the tribunal relied on, so the declarations would serve no useful purpose. Minimal curial intervention weighed strongly against relief, because India itself had put the question to the tribunal. The application was dismissed with costs. ¶¶ 171–178

Procedural history

March 2015Press release on the notice of claim (text not included).
November 2015Vedanta commenced arbitration against India under the India–UK BIT, seated in Singapore. Cairn had commenced its own arbitration in September 2015, seated in the Netherlands.
December 2017The Vedanta tribunal issued a decision rejecting some of India's jurisdictional objections.
May 2018Procedural Order No. 3 set the cross-disclosure regime: confidentiality as the general rule, with disclosure allowed case by case.
June 2018Procedural Order No. 6 allowed cross-disclosure of the December 2017 decision, subject to agreed redactions, but refused two broader categories of documents.
August 2018India filed Originating Summons No 980 of 2018 in the Singapore High Court.
September 2018Procedural Order No. 7 refused cross-disclosure of a hearing transcript on jurisdiction.
8 October 2020Singapore High Court ([2020] SGHC 208) dismissed India's application with costs. India appealed; the published documents do not show the outcome of the appeal.
22 August 2017Note: the Delhi High Court judgment filed in this case (CS(OS) 383/2017) concerns Union of India v. Vodafone Group plc, not Vedanta. It restrained Vodafone from pursuing its India–UK BIT arbitration.

Tribunal, counsel and experts

Decided by: Vinodh Coomaraswamy Judge, High Court of the Republic of Singapore
For the claimant: Rajah & Tann Singapore LLP
For the respondent: Drew & Napier LLC

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