Law. Faith. Justice. Community. Culture.
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.
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].
Five Ocean Corporation v Cingler Ship Pte Ltd [2015] SGHC 311
Significance: High Court exercised its powers under s 12A of the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“the IAA”) on the basis of urgency and necessity to make an interim order to preserve the value of goods pending the resolution of arbitration.