… the [Rejoinder] and the accompanying witness statements and expert reports raised new issues and introduced new evidence which necessitates [CMJ’s] preparation of a response and production of relevant evidence in support thereof. (We will write to you shortly in this regard).

Experts of like disciplines to meet on without prejudice basis and produce joint report: identifying areas of agreement; identifying issues still not agreed; and providing reasons for any non-agreement.

The Parties’ experts of like disciplines are to meet on a ‘without prejudice’ basis in person or by telephone or videoconference and produce a joint report: identifying areas of agreement; identifying issues still not agreed; and providing reasons for areas of non-agreement. The report shall be delivered on or before the date mentioned in [para] 2.1(j).

8.10 The witness statements shall be in sufficient detail so as to stand as examination in chief of the witness at the witness hearing. The Tribunal shall not receive testimony from any witness or expert who has not provided a written statement or report as part of the written procedure unless (i) it is offered to rebut an argument or evidence raised in the Rejoinder to which [CMJ] were not able to respond; or (ii) the new testimony is offered to rebut testimony offered for the first time during examinations at the hearing; and in each case (iii) is authorized by the Tribunal upon application to it, such application submitted as soon as reasonably possible following the alleged basis for the new evidence and describing for purposes of fair notice to the other party (a) a summary of the testimony offered for the first time at the hearing, (b) the new fact/argument that is to be rebutted, and (c) the identity of the witness that will offer the new testimony and the scope of that new testimony.

9.2(a) [CMJ’s] witnesses will be examined first, followed by [CML’s] witnesses.

9.2(b) Each witness shall first be invited to confirm or deny his or her written statement.

[emphasis added]

The current procedural calendar does not entitle [CMJ] to submit any … ‘response’ [to CML’s Rejoinder]. [PO2] permits the Parties to submit two written submissions each. This is consistent with the basic requirement under Article 15 of [the UNCITRAL Rules] that the Parties be treated with equality. It would be inconsistent with that requirement for [CMJ] to submit a third written submission in the form of a ‘response’ to [CML’s Rejoinder].

It is similarly improper for [CMJ] to use the [JER] process to expand the proposed without-prejudice discussions to include unspecified ‘materials’ that are not part of the record of [the Arbitration]. In paragraph 8.4 of [PO2], the Tribunal directed that experts of like disciplines produce a joint report: (a) identifying areas of agreement; (b) identifying areas of disagreement; and (c) giving reasons for such disagreement. It is clear that the process envisioned by the Tribunal is based on the experts’ existing reports, not new ‘materials’ introduced by one Party without seeking leave or providing copies of those materials to the other Party and their experts in advance. The purpose of the joint expert process is to narrow, not expand, the outstanding issues.

[emphasis in original]

a. [CML] cannot credibly contend that the principle of equality prohibits [CMJ] from adducing responsive evidence. On the contrary, having changed their legal counsel prior to the Rejoinder submission, [CML] have now in that submission chosen to make voluminous new statements of fact and arguments of law, and adduced the evidence of no fewer than five witnesses. It would be contrary to the principle of equality if [CMJ] were prohibited from making a short response to these de novo submissions from [CML’s] new counsel.

b. The time taken by [CMJ] to analyse these submissions and procure evidence responsive to the new points therein, is wholly justified by the excessive scope and nature of [CML’s] Rejoinder, as well as the technical nature of the issues raised.

c. Nor in the ordinary course of the procedure set out in PO2 would [CML] be entitled to successfully suppress [CMJ’s] factual witnesses from making statements in response to such new points [see para 8.10 of PO2]. By allowing [CMJ] to submit their responsive Witness Statements now, rather than make the same points in examination in chief, the Tribunal would simply be ensuring that such evidence is produced in a measured and early manner. It is certainly not denying [CML] the privilege they appear to assert in their letter.

d. [CMJ’s] short responsive statements will in turn be accompanied by translations of the statements themselves and their accompanying exhibits. [CML] cannot allege prejudice on the basis of language. Indeed，it is telling that [CML] have yet to provide [CMJ] (and [the Tribunal]) with the full set of translations of their Rejoinder submissions filed some three weeks ago.

[emphasis added]

With regard to [BT2], the Tribunal finds that this new witness statement and the exhibits cited therein substantially expand the issues from those set out in the written submissions already exchanged. Except for a cursory reference to … [the] witness statement [of one of CML’s witnesses], it is unclear how the statements in [BT2] and the exhibits cited constitute a response to the matters discussed in [that witness statement]. Moreover, [BT2] does not clearly set out the allegations in the Rejoinder it purportedly responds to. Moreover, it is apparent that [BT2] contains many substantial and new allegations and documents. Even assuming that it is true that [CMJ] only obtained the factual materials in June 2018, there are many exhibits which would have been in [CMJ’s] possession or at the very least, [CMJ] would have known about these (for example, exhibits comprising of documents prepared by [CMJ]).

Considering the proximity of the hearing, the Tribunal finds that it is much too late to admit substantial new evidence and witness statements. Moreover, the experts are already in the final stages of coming up with [the JERs]. As [CMJ] had previously stated, if the new evidence are admitted, their experts would be referring to these. It would be highly unfair to deprive [CML] and its experts from having the opportunity to peruse the new evidence and respond to these before the hearing.

Therefore, the Tribunal disallows the introduction into the record of [BT2] and the exhibits cited therein.

The Tribunal has already previously decided on the additional materials that [CMJ] has sought to introduce – some of these were admitted, and some were not allowed. The Tribunal’s decisions on these matters stand.

Moreover, granting this request would be tantamount to a blanket admission of new materials, which the Tribunal and [CML] would have no ability to view and comment on before they are introduced. Therefore, the Tribunal denies this request. Paragraphs 7.1 and 7.7 of [PO2] stand – no new document may be presented at the hearing unless agreed by the Parties or authorized by the Tribunal in accordance with principles of due process, and demonstrative exhibits should not contain new evidence, and all evidence relied on to present the demonstrative exhibit must be cited to on the slide.

The process of producing joint expert reports shall be led by the Parties’ experts. The Parties’ counsel may consult with the Parties’ respective experts throughout the process.

The meeting(s) or call(s) to take place between the Parties’ experts of like disciplines shall be attended by the experts of like disciplines and their teams only，without the attendance of client representatives or counsel.

The meeting(s) or call(s) between the Parties’ experts of like disciplines shall involve the experts discussing their respective positions on each of the relevant issues on a ‘without prejudice’ basis.

Any draft joint expert reports shall be prepared on a ‘without prejudice’ basis and shall not be referenced in these proceedings. Only the final joint expert report，which is approved and signed by both [CMJ’s] and [CML’s] experts of like disciplines, shall be entered into the record and referenced in these proceedings.

The scope of the joint expert report of the Parties’ experts of like disciplines shall be limited to issues that both the [CMJ’s] and [CML’s] experts of like disciplines have already addressed in their respective expert reports submitted in these proceedings.

The Parties’ experts shall not rely on any material not already on the record in these proceedings.

During the joint expert meetings and the preparation of the joint expert reports, therefore, the experts should not be precluded from discussing such issues and relying on such materials that [CMJ] and/or their experts produce in response to the new issues raised and new evidence introduced in the Rejoinder Submissions.

Furthermore, [PO2] does not regulate or restrict in any way the material that the experts are entitled to rely upon when engaging in the joint meetings or when preparing the joint expert reports. [CML’s] suggestion would unnecessarily fetter the experts’ in their preparation and communications.

The Tribunal is in receipt of [CMJ’s] letter dated 9 August 2018, and [CML’s] letter dated 10 August 2018. [PO2], [para] 8.4 provides, ‘The Parties’ experts of like disciplines are to meet on a “without prejudice” basis…and produce a joint report: identifying areas of agreement; identifying issues still not agreed; and providing reasons for areas of non-agreement…’

With regard to the joint report on the areas of agreement:

The Tribunal considers that the joint report identifying areas of agreement would be helpful to it. The Tribunal therefore directs that [CML’s] experts provide their areas of agreement to the relevant [CMJ’s] experts within 24 hours from this e-mail. [CMJ’s] experts will then retain any areas of agreement which remain uncontroversial, delete those which are no longer agreed, and finalize this report. After which, both experts will converse as to whether this finalized report is agreeable to both of them, and only the text that is agreed upon in this final discussion will be submitted to the Tribunal. All the other text with which either expert has an objection will be deleted. This agreed report will then be forwarded to the Tribunal immediately.

With regard to the joint report on the issues still not agreed and the reasons for areas of non-agreement:

This portion of the joint report is intended to comprise of (1) a list of areas of non-agreement, and (2) a short statement of what each expert’s position is. None of the experts are supposed to provide a lengthy explanation of their positions or a rebuttal of their counterpart’s position, as these will be reflected in the previous expert reports provided.

The Tribunal agrees with [CML] that submitting separate reports on areas of disagreement would run the risk of expanding the issues or arguments, which is not appropriate at this stage. The report on areas of non-agreement should not amount to an additional expert report.

If the parties are unable to agree on a joint submission for either or both (1) and (2) as described above within the deadline of submitting the areas of agreement to the Tribunal as set forth above, then the Tribunal will not accept any report on the areas of non-agreement. In this situation, only the joint report on areas of agreement will be accepted.

The Tribunal agrees with [CMJ] that the PRC Law Materials should be admitted considering that [CML’s] PRC law expert’s (Prof. Liu’s) report on the substantive PRC legal issues was only submitted with the Rejoinder. It would thus be reasonable, as well as helpful to the Tribunal, for [CMJ’s] PRC law expert (Prof. Ling) to have an opportunity to address it.

The Tribunal thus GRANTS [CMJ’s] request with regard to the PRC Law Materials. Prof. Liu may express his comments on the new materials during the hearing.

The Tribunal sees no compelling reason to reconsider and modify its directions of 14 August 2018.

If the Parties cannot agree to a (a) list of areas of non-agreement and (b) a short statement of each expert’s position on the area of non-agreement, separate submissions from each party would be unhelpful, and may serve to obfuscate what has already been discussed in the previous expert reports submitted. The Tribunal considers that each expert will have sufficient opportunity to express his/her views about various issues, including the issues of non-agreement, when they are called to the stand during the hearing. If the Tribunal, and in fact, any Party believe that an expert’s opinion on a substantive issue should be further explored, they are free to propound questions during the hearing. The expert will not be unreasonably prevented from stating his/her position in response to a question from the Tribunal or a Party, subject to the Tribunal’s power to control the arbitration proceedings.

Separate submissions on areas of non-agreement would also constitute additional expert reports at this stage, which is neither timely nor appropriate, as the submissions phase before the hearing has already ended.

With regard to [CMJ’s] allegations on [CML] and their expert(s) attempting to amend the areas of agreement, or seeking to rewrite or delete reasons for disagreement, the Tribunal is not in a position to rule upon those allegations, as these took place in a process without the Tribunal’s involvement, and on a without prejudice basis. The Tribunal also is not privy to the reasons why each expert chose to include or not include any text in the draft and the final joint expert report.

Given the reasons stated above, the Tribunal denies [CMJ’s] request for the Tribunal to reconsider its directions of 14 August 2018.

12 Given that the Tribunal has mandated a ‘chess-clock’ approach, there will be no prejudice to [CML] by such a direction as the additional apportionment of time to Mr. [C] and [CMJ’s] experts will come out of [CMJ’s] own total time. As the Tribunal will appreciate, [CMJ] are seeking to mitigate the procedural injustice which would be suffered by [CMJ] if there is no appropriate opportunity available to fairly and properly present their case and evidence to rebut [CML’s] new evidence that was introduced at the Rejoinder stage (as detailed below).

13  Alternatively, if the Tribunal feels that, because of the procedural history of this case, it would be unsatisfactory for it to hear [CMJ] and [CMJ’s] experts’ evidence and opinion on these new issues for the first time at the hearing (without the benefit of prior written submissions, opinions or evidence), it may prefer to simply disregard in their entirety all new issues and evidence (and all conclusions flowing from them) raised for the first time in [CML’s] Rejoinder and accompanying witness statements and expert reports upon which [CMJ] and their experts have not had an opportunity to respond.

14  To allow those issues and evidence to remain extant, without affording [CMJ] an opportunity to fully present their case on those issues and evidence, is an outcome that [CMJ] are confident the Tribunal is mindful to avoid.

[CMJ] were denied of a full opportunity to present their case from the Tribunal’s failure to allow [CMJ] to admit two witness statements to respond to new factual issues raised for the first time in [CML’s] Rejoinder, which resulted in real prejudice to [CMJ];

The Tribunal denied [CMJ’s] expert the chance to state his reasons and areas of disagreement in the [JER] by ordering, among other things, that the parties’ experts must agree on the list of areas of non-agreement, failing which the Tribunal will not accept any report on the areas of non-agreement. This resulted in [CMJ] being denied of a full opportunity of responding to [CML’s] case; and

The Tribunal, in failing to give adequate reasons as required under Article 31(2) of the Model Law, failed to apply its mind to important aspects of [CMJ’s] submissions on the issue of the existence, scope and nature of [CML’s] duty to drill for additional gas.

(ii)  the party making the application was not given proper notice of the appointment of the arbitrator or was otherwise unable to present his case; or

…

(iv)  the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties ...

[emphasis added]

Notwithstanding Article 34(1) of the Model Law, the General Division of the High Court may, in addition to the grounds set out in Article 34(2) of the Model Law, set aside the award of the arbitral tribunal if —

(a)  the making of the award was induced or affected by fraud or corruption; or

(b)  a breach of the rules of natural justice occurred in connection with the making of the award by which the rights of any party have been prejudiced.

The proliferation of labels may not ultimately be helpful. Nevertheless, it is important to bear in mind that it is never in the interest of the court, much less its role, to assume the function of the arbitral tribunal. To say that the court must be satisfied that a different result would definitely ensue before prejudice can be said to have been demonstrated would be incorrect in principle because it would require the court to put itself in the position of the arbitrator and to consider the merits of the issue with the benefit of materials that had not in the event been placed before the arbitrator. Seen in this light, it becomes evident that the real inquiry is whether the breach of natural justice was merely technical and inconsequential or whether as a result of the breach, the arbitrator was denied the benefit of arguments or evidence that had a real as opposed to a fanciful chance of making a difference to his deliberations. Put another way, the issue is whether the material could reasonably have made a difference to the arbitrator; rather than whether it would necessarily have done so. Where it is evident that there is no prospect whatsoever that the material if presented would have made any difference because it wholly lacked any legal or factual weight, then it could not seriously be said that the complainant has suffered actual or real prejudice in not having had the opportunity to present this to the arbitrator …

The foregoing discussion of the applicable principles may be summarised as follows:

(a) The parties’ right to be heard in arbitral proceedings finds expression in Art 18 of the Model Law, which provides that each party shall have a “full opportunity” of presenting its case. An award obtained in proceedings conducted in breach of Art 18 is susceptible to annulment under Art 34(2)(a)(ii) of the Model Law and/or s 24(b) of the IAA.

(b)  The Art 18 right to a ‘full opportunity’ of presenting one’s case is not an unlimited one. It is impliedly limited by considerations of reasonableness and fairness.

(c)  What constitutes a ‘full opportunity’ is a contextual inquiry that can only be meaningfully answered within the specific context of the particular facts and circumstances of each case. The overarching inquiry is whether the proceedings were conducted in a manner which was fair, and the proper approach a court should take is to ask itself if what the tribunal did (or decided not to do) falls within the range of what a reasonable and fair-minded tribunal in those circumstances might have done.

(d) In undertaking this exercise, the court must put itself in the shoes of the tribunal. This means that (i) the tribunal’s decisions can only be assessed by reference to what was known to the tribunal at the time, and it follows from this that the alleged breach of natural justice must have been brought to the attention of the tribunal at the material time; and (ii) the court will accord a margin of deference to the tribunal in matters of procedure and will not intervene simply because it might have done things differently.

519 With respect to the [X] well, the contemporaneous documentation shows that the idea of drilling it was dropped after January 2015. The Tribunal notes that after January 2015, the TCM [Technical Committee] and JMC [Joint Management Committee] meetings, and the documents cited above, do not discuss the [X] well, and, by November 2017, the drilling of the [Y] well was proposed. [CMJ] subsequently agreed to the budget for the [Y] well in November 2017.

520 The Tribunal notes that [CML] did not present a drilling plan and detailed budget for the [X] well after the favourable economic evaluation of the well in November 2013 and April 2014 following the October 2013 meetings. [CML] as the Operator, could have made proposals to boost reserves, at a time where a revised estimate of the reserves made it impossible for the Sellers to achieve the requirements under the [contracts].

521 However, contemporaneous evidence does not show that [CMJ] insisted on pushing through with the [X] well during this period. From the period starting January 2015, [CMJ] never brought up that they regarded the [X] well as essential, and never warned [CML] that they considered the failure to advance the plans as a dereliction of duty.

…

523 Thus, it is apparent that the [X] well discussion stalled after January 2015 because of the more pressing issue of the low level of offtake. This sheds light on the probable reason why the [X] well design and budget were not put forward by [CML], and why in 2015, [CMJ] may not have approved a plan, given their more urgent priorities. In any case, there was nothing preventing [CMJ] from insisting on this in the JMCs [meetings]. There is no sufficient evidence showing that [CMJ] continued to strongly insist in progressing the work regarding the [X] well after January 2015.

524 Considering these, the Tribunal finds that [CML’s] failure to proceed with the arrangements for the [X] well was not a breach of its obligations as Operator.

[i]mportantly, [CMJ] did not insist on the immediate implementation of the alternative proposals of [X], [A] and [B] wells because, as [the chief representative of CML] said during the meeting, the production capacity limitation of the Platform meant that even with further reserves, the daily production rate could not be increased, it therefore made commercial sense to drill one well at a time as this was all that the Platform could handle.

In the very unlikely case that, after implementing the development plan as specified in the ODP [Overall Development Plan], the production level is less than the minimum level in the ODP, [CML] will consult with [CMJ] and will arrange for additional development wells to be drilled to ensure that the production level reaches such minimum level of production.

87 It is [CMJ’s] case that, based on the representations made in [the 15 July 2011 Letter], [CML] had an independent duty to drill for Additional Gas if a shortfall arose. In the Award, the Tribunal did not consider whether a separate duty to drill on part of [CML] arose from [the 15 July 2011 Letter] but rather focused solely on whether such duty arose from the parties’ discussions and agreement at the JMC. The Tribunal then dismissed [CMJ’s] claims with respect to Additional Gas on the basis [CMJ] did not continue to insist on progressing the work regarding the [X] well after January 2015. Paragraph 523 of the Award states that: [citing para 523 of the Award]

88 [CMJ] submit[s] that the Tribunal had come to this conclusion without specifically making a finding as to whether [CML] had been under an obligation to drill for Additional Gas in the first place. Had such an independent duty existed, [CMJ’s] insistence or otherwise at the JMC would not have been the key determining factor. Rather, [CML] would have been under an independent duty to ensure that the relevant plans for the drilling of wells for Additional Gas were made and presented to the JMC.

89 The Tribunal dismissed [CMJ’s] case on [CML’s] obligation to drill additional wells on the factual basis that the JMC never approved the [X] well and [CMJ] did not insist on progressing the work regarding the well after January 2015. The Tribunal never made a finding on [CMJ’s] point that [CML] independently had the duty to drill for additional gas.

90 The issue of whether [CML] was under any duty to drill for Additional Gas was an essential issue as it was [CMJ’s] case during [the Arbitration] that [CML] breached its duty to drill for Additional Gas, and this was directly relevant to the issue of whether [CML] had breached their obligations to [CMJ]. As such, it is submitted that this was a failure of the Tribunal to apply its mind to an important aspect of [CMJ’s] submissions.

72     An arbitral tribunal is not obliged to deal with every argument. It is neither practical nor realistic to require otherwise. Toulson J summed up neatly the extent of the arbitral tribunal’s obligation in Ascot Commodities NV v Olam International Ltd  [2002] CLC 277 at 284 … :

Nor is it incumbent on arbitrators to deal with every argument on every point raised. But an award should deal, however concisely, with all essential issues.

73     All that is required of the arbitral tribunal is to ensure that the essential issues are dealt with. The arbitral tribunal need not deal with each point made by a party in an arbitration: Hussman (Europe) Ltd v Al Ameen Development and Trade Co [2000] 2 Lloyd’s Rep 83 … at [56]. In determining the essential issues, the arbitral tribunal also should not have to deal with every argument canvassed under each of the essential issues.

74     What then is considered ‘essential’? This is not easy to define. Notwithstanding, in my view, arbitral tribunals must be given fair latitude in determining what is essential and what is not. An arbitral tribunal has the prerogative and must be entitled to take the view that the dispute before it may be disposed of without further consideration of certain issues. A court may take a contrary view ex post facto, but it should not be too ready to intervene.

[emphasis in original]

46 To fail to consider an important issue that has been pleaded in an arbitration is a breach of natural justice because in such a case, the arbitrator would not have brought his mind to bear on an important aspect of the dispute before him. Consideration of the pleaded issues is an essential feature of the rule of natural justice that is encapsulated in the Latin adage, audi alteram partem … what must be shown to make out a breach of natural justice on the basis that the arbitrator failed to consider an important pleaded issue. It will usually be a matter of inference rather than of explicit indication that the arbitrator wholly missed one or more important pleaded issues. However, the inference – that the arbitrator indeed failed to consider an important pleaded issue – if it is to be drawn at all, must be shown to be clear and virtually inescapable. If the facts are also consistent with the arbitrator simply having misunderstood the aggrieved party’s case, or having been mistaken as to the law, or having chosen not to deal with a point pleaded by the aggrieved party because he thought it unnecessary (notwithstanding that this view may have been formed based on a misunderstanding of the aggrieved party’s case), then the inference that the arbitrator did not apply his mind at all to the dispute before him (or to an important aspect of that dispute) and so acted in breach of natural justice should not be drawn.

…

59 With respect, poor reasoning on the part of an arbitral tribunal is not a ground to set aside an arbitral award; even a misunderstanding of the arguments put forward by a party is not such a ground. … the court ‘is not required to carry out a hypercritical or excessively syntactical analysis of what the arbitrator has written’ when considering whether an arbitral award should be set aside for breach of natural justice. Neither should it approach an arbitral award with a ‘meticulous legal eye endeavouring to pick holes, inconsistencies and faults … with the objective of upsetting or frustrating the process of arbitration’ ….

According to [CMJ], [CML] had the obligation to appraise and develop Additional Gas in accordance their duties as a Reasonable Prudent Operator, under the rolling development strategy, and under the 15 July 2011 Letter …

[emphasis added]