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If a company’s website’s terms of use include an arbitration clause, can the company enforce this against a user suing it in the Singapore court to stay the proceedings in favour of arbitration? As always, it depends.
Significance: the General Division of the Singapore High Court (S Mohan JC) set aside part of an arbitral award and the 3-member Tribunal’s decision on an extension of time defence for breach of natural justice. Judgment here.
The highest courts of Singapore and the United Kingdom have recently issued decisions regarding the choice of law to govern arbitration agreements.
In BNA v BNB and another [2020] 1 SLR 456; [2019] SGCA 84 (“BNA”), the Singapore Court of Appeal adopted at [44]-[48] the following three-step approach from BCY v BCZ [2017] 3 SLR 357 (HC) (“BCY”):
This is based on the framework in Sulamerica Cia Nacional de Seguros S.A. v. Enesa Engenharia S.A. [2012] EWCA Civ 638 (“Sulamerica”).
An express choice of the proper law of the main contract does not, in and of itself, also constitute the proper law of the arbitration agreement: BNA at [61].
There is a presumption that the parties’ choice of law for the entire/main/underlying contract (containing the arbitration clause) also reflects the parties’ implied choice of law governing the arbitration agreement (BNA at [61]).
However, this presumption can be rebutted. The choice of a seat that is different from the place of the law of the main contract is not by itself sufficient to displace the starting point: BNA at [62]; BCY at [65].
The inquiry of whether the presumption is displaced only becomes relevant if the law of the seat is materially different from the (I suppose, putative) law governing the arbitration agreement (lex arbitri): BNA at [63]. E.g. if the seat of arbitration is Singapore but the assumed lex arbitri by that point in the analysis is the law of the People’s Republic of China (PRC).
Maniach Pte Ltd v L Capital Jones Ltd [2016] SGHC 65 – SGHC holds that minority oppression claims are not arbitrable per se
Significance: Singapore High Court (coram: Vinodh Coomaraswamy J) held that all statutory minority oppression claims, i.e. section 216 claims, regardless of the factual circumstances are not arbitrable as a matter of public policy.
The reasons given are:-
1. the minority oppression claim, being statutory in nature and being asserted in relation to the affairs of a creature of statute, ought to be supervised and determined by the court in all cases: [160];
2. (a) an arbitral tribunal is unable to grant a plaintiff in minority oppression proceedings the full panoply of relief available under s 216(2) of the Companies Act to remedy minority oppression; and (b) it is undesirable to compel the parties to fragment a minority oppression dispute between litigation and arbitration, whether that fragmentation arises because the arbitral tribunal cannot grant the full range of relief which the statute makes available to a successful plaintiff or because only some of the parties to the dispute are parties to the arbitration agreement. This follows Quentin Loh J’s reasoning in Silica: [161].
On part (a) of the 2nd reason above, Vinodh J opined that the statutory power to order a buy out on terms under s 216(2)(d) of the Companies Act is vested only in a judge, and even then only by s 216(2)(d) of the Companies Act and is alien to the common law and even to equity: [164]. Further, following Quentin Loh J in Silica in considering the scope of s 12(5) of the International Arbitration Act: (1) it clearly could not “be construed as conferring upon arbitral tribunals the power to grant all statute-based remedies or reliefs available to the High Court” and (2) that an arbitral tribunal “clearly cannot exercise the coercive powers of the courts or make awards in rem or bind third parties who are not parties to the arbitration agreement”: at [165].
On part (b) of the 2nd reason above, Vinodh J opined that if minority oppression claims are arbitrable, fragmentation along remedial lines and issues is inevitable: [169]-[170].
Significance: Singapore High Court orders banks to disclose customer account information to plaintiffs in respect of the plaintiffs’ claims against the banks’ customer in an application for pre-action discovery under O 24 r 6(5) and/or the Court’s inherent jurisdiction (i.e. a Norwich Pharmacal order).
The decision was upheld on appeal by Andrew Ang SJ in Success Elegant Trading Ltd v La Dolce Vita Fine Dining Co Ltd and others and another appeal [2016] 4 SLR 1392; [2016] SGHC 159.
Significance: consequences of setting aside arbitral awards and the relationship between remission of matters arising from arbitral awards and setting aside awards.
Under Art 34(4) of the UNCITRAL Model Law on International Arbitration, read with s 19B of the International Arbitration Act, the court may remit, that is refer, certain matters arising from an arbitral award back to the very same arbitral tribunal which made the award. The effect of remission is to confer further jurisdiction on that tribunal, enabling it to consider the matters remitted: [17]-[18].
Under Art 34(4), in order for the court to avail itself of the power to remit matters, the court must be satisfied that it is appropriate to suspend the setting aside proceedings in order to give the tribunal an opportunity to take such steps as may be required to eliminate the grounds for setting aside. This is plainly a curative provision which enables the court, faced with the fact there has been some defect which could result in the award being set aside, to take a course that might forestall that consequence. Though this is discretionary, there are limits to the power to remit that is conferred by the provision: [25].
The court has no power to remit an arbitral award after it has been set aside. This is founded on the plain words of Art 34(4) of the UNCITRAL Model Law on International Arbitration, and also accords with good sense. Remission is a curative option that is available to the court in certain circumstances where it considers that it may be possible to avoid setting aside the award. For that reason, remission, in the correct sense, will always be to the same tribunal that made the award that is under the consideration of the court: [34].
Remission of a matter is a carefully defined concept in the IAA (and Model Law), and that it operates as an alternative to setting aside an arbitral award: [39].
The immediate effect of setting aside an award is that the award ceases to have legal effect at least in so far as its status in this jurisdiction is concerned: [41].
But for the court’s conferment of jurisdiction on the tribunal pursuant to a remission, the tribunal would have no jurisdiction to do so because once it has rendered an award, it has no further jurisdiction, power or mandate to deal with the matters addressed in the award: [44].
The fact that the award has been set aside would not, in and of itself, affect the continued validity and force of the arbitration agreement between the parties, save in the situation where the award was set aside on the ground that there was no arbitration agreement between the parties: [51].
On this basis, it may be open, subject to certain other limitations, to which we will briefly turn, for a party which has successfully obtained an award in the arbitration and then seen that set aside by the court, to start a fresh arbitration: [52].
However, there are several possible limitations which might stand in the way of a party seeking to commence fresh arbitration proceedings after an award was set aside. This is quite apart from practical considerations of cost and time. See [54]:
(A) It is possible that a limitations defence might have accrued by the time the fresh set of proceedings is commenced. It is possible for this to be addressed in appropriate circumstances pursuant to s 8A(2) of the IAA, which empowers the court in the exercise of its discretion to extend time for the commencement of proceedings by excluding from consideration the period between the commencement of the arbitration and the setting aside of the award. However, s 8A(2) avails only where an application has been made to the High Court. See [64]-[67].
(B) It is of course possible for both parties to agree to reconstitute the previous tribunal as the new one. But in the absence of such agreement, there remains the possibility that objections might yet be taken by one of the parties to any attempt by the other to re-appoint a member of the previous tribunal, on the grounds that there exist justifiable doubts as to the impartiality of the prospective appointee by reason of his or her prior involvement in the matter and in the award that has been set aside. This will plainly be a fact-sensitive inquiry.
(C) In attempting to commence a fresh arbitration, consideration will have to be given to the issue of res judictata.
Whether as a function of substantive or procedural law, there is strong support for the view that barring special circumstances, the “extended” doctrine of res judicata operates to preclude the reopening of matters that (a) are covered by an arbitration agreement, (b) are arbitrable, and (c) could and should have been raised by one of the parties in an earlier set of proceedings that had already been concluded: [59].
In a case where the arbitral tribunal never engaged with the merits of a particular claim, neither the strict nor the extended doctrines of res judicata are engaged: [63].