ARB Study Notes - Darius Chan 1 - 3 PDF

**Applicable laws** 1. By way of background, a brief overview of the arbitral process can be found [[here].](https://www.stewartslaw.com/expertise/international-arbitration/arbitration-process/) 2. In an arbitration, the applicable laws include: - Arbitration rules - Law of the sea...

**Applicable laws** 1. By way of background, a brief overview of the arbitral process can be found [[here].](https://www.stewartslaw.com/expertise/international-arbitration/arbitration-process/) 2. In an arbitration, the applicable laws include: - Arbitration rules - Law of the seat of the arbitration (*lex arbitri*) - Law governing the substance of the dispute - Law governing the arbitration agreement - Law applicable to non-contractual claims - Law governing a party's legal capacity to contract 1. **Legislative framework in Singapore** 3. In Singapore, arbitrations conducted pursuant to arbitration agreements which are 4. The International Arbitration Act applies to an international arbitration or in any other case, if the parties agree that it applies (s 5(1) IAA). An arbitration is international if: - - - - - 5. The UNCITRAL Model Law on International Commercial Arbitration (1985) ("**Model** 6. By way of background, UNCITRAL is an UN body whose mandate is to harmonise 7. Some other jurisdictions which have legislation based on or influenced by the Model 8. The Model Law applies to international commercial arbitration (Art 1(1) MAL). The **Relationship between applicable laws** 9. All arbitrations require a valid arbitration agreement between the parties for the arbitral 10. In institutional arbitration, parties designate the use of an arbitral institution to administer the arbitration, typically (but not always) in accordance with the arbitral rules of that institution. Such commonly used institutions in this region include Singapore International Arbitration Centre (SIAC), International Chamber of Commerce (ICC), Hong Kong International Arbitration Centre (HKIAC), London Court of International Arbitration (LCIA), etc. 11. Institutions publish model arbitration agreements (commonly known as "model clauses") that parties can insert into their contracts. Rather than drafting one from scratch, parties can agree on an arbitral institution, and insert the appropriate model clause from that institution into their contracts. Many jurisdictional issues arise when parties alter the model clauses (which we will examine below). 12. In contrast, ad hoc arbitration means there is no involvement of an arbitral institution to help administer the arbitration. In ad hoc arbitrations, it is not uncommon for parties to agree to adopt the UNCITRAL Arbitration Rules, which were designed to be used by parties without the involvement of an arbitral institution. The UNCITRAL Arbitration Rules is not to be confused with the UNCITRAL Model Law. The latter is a model set of provisions to be enacted as law by a legislative body, whereas the former is a set of procedural rules which parties can agree by contract to adopt. 13. Additionally, regardless of whether parties opt for institutional or ad hoc arbitration, an arbitration agreement will typically designate the seat of the arbitration, such as Singapore. The seat of the arbitration provides the procedural law governing the conduct of the arbitration, also known as the *lex arbitri*. It is important to note that the choice of a particular institution does not dictate the choice of the seat. For instance, parties can opt for SIAC arbitration, and designate the seat of arbitration as Kuala 14. The choice of the seat has important consequences, the key of which is that it dictates the procedural law governing the conduct of the arbitration (*lex arbitri*). By way of illustration: a. b. c. 15. Here is a complication: if parties in their arbitration agreement opt for institutional arbitration with the result that the arbitral rules of that institution apply to that arbitration, to what extent do those institutional rules override provisions of the *lex arbitri*? 1. **Relationship between *lex arbitri* and international rules** 16. Under Singapore law, a provision in an arbitration agreement referring or adopting any rules of an arbitral institution is by itself insufficient to exclude the application of the Model Law (s 15(2) IAA; overruling *John Holland v Toyo*). Provisions of rules of arbitration selected by parties will apply to the extent that such provision is not inconsistent with a provision of the Model Law or the IAA from which the parties cannot derogate (s 15A(1) IAA; overruling *Dermajaya Properties*). 17. A provision of rules of arbitration is not inconsistent with the Model Law of the IAA 18 *Insigma Technology v Alstom Technology* \[2009\] SGCA 24 affirmed (at \[41\]) that parties to an arbitration in Singapore are free to adopt the arbitration rules of their choice to govern their arbitration, and their choice of arbitration rule would be respected by Singapore law and be given the fullest effect possible. Put simply, to the extent there is any conflict between the arbitration rules and the Model Law as incorporated by the IAA, the rules chosen by parties will prevail unless the conflict was with a mandatory provision of the Model Law. 19. However, this does not totally resolve the issue because the Model Law does not expressly prescribe which provisions are mandatory in nature. Be that as it may, it is clear that some provisions in the Model Law only provide for a *default* position and allow parties to derogate from that default provision. Such non-mandatory provisions can be identified from their use of the phrase "*unless otherwise agreed by the parties,*...". 20. In other jurisdictions such as England, the English Arbitration Act sets out a list of mandatory provisions that have effect notwithstanding any agreement to the contrary. [This means that any arbitral rules chosen by the parties will prevail to the extent they] [do not conflict with those mandatory provisions.] **1.3 Parties can choose applicable laws** **Arbitration rules** 21. Parties may agree on a set of institutional (such as the ICC or SIAC Rules) or ad hoc arbitration rules (such as the UNCITRAL Rules) to apply to their arbitration. Alternatively, they may formulate their own rules by agreement. If the parties do not 22. A question as to the applicable version of any arbitration rules can arise when the rules are revised between the time the arbitration agreement is concluded and the time arbitration is commenced. In this situation, generally there appears to be a presumption in favour of rules that are applicable as at the date of commencement of arbitration and not at the date of contract (*Black and Veatch Singapore v Jurong Engineering* \[2004\] SGCA 30). 2. **Seat of arbitration** 23 Parties are free to agree on the seat (or place) of arbitration (Art 20(1) MAL). If parties fail to specify a seat, the arbitral rules may regulate how the seat is to be decided, for instance, by specifying a default seat in the absence of parties' choice, or by giving the power to the arbitral tribunal to make that decision. 24. Once the seat of arbitration has been agreed upon, it can only be changed by agreement of all the parties. The seat of arbitration---which is a juridical concept---is not necessarily the same as the venue of any arbitral hearing which is a logistical concept. The seat does not change merely because the tribunal holds its hearing at a different place (*PT Garuda v Birgen Air* \[2002\] SGCA 12 at \[24\]). The tribunal may hold hearings and meetings by any means and at any location it considers convenient or appropriate, independent of the seat. Of course, the tribunal can also choose to hold hearings at the seat, but it is not required to do so. 25. Factors to consider when choosing a seat of arbitration: - - - - Seat should be neutral. 26. The New York Convention is presently the most successful treaty in the world with more than 160 signatory states. It covers the recognition and enforcement of [foreign] arbitration awards. The NYC is part of Singapore law (enacted under the IAA). Singapore has a made a reservation under the NYC whereby it will apply the NYC only to awards made in another signatory state of the NYC (commonly known as the reciprocity reservation)[.](#bookmark4)[^5^](#fn5){#fnref5.footnote-ref} 3. **Law governing the substance of the dispute** 27. Parties are free to choose the rules of law applicable to the substance of the dispute (Art 28(1) MAL). The parties are generally not restricted in their choice of applicable law. There is no requirement that the chosen law has some connection to the parties or to the dispute (*Quarella SpA v Scelta Marble* \[2012\] SGHC 166 at \[34\]). A tribunal's interpretation of a choice of law clause cannot normally be reviewed unless the tribunal deliberately disregarded the parties' choice of law clause (*Quarella SpA v Scelta Marble*). 28. In the absence of any choice: a. b. 29. Although the Model Law requires tribunal to first apply conflict of law rules in order to ascertain the appropriate governing law, arbitral rules may not necessarily require the same approach. For instance, SIAC Rule 31 empowers the tribunal to apply the law or rules of law which the tribunal determines to be appropriate, without mandating a conflict of laws methodology. 30 A complication arises: are SIAC Rule 31 and Art 28(3) MAL inconsistent? If so, which prevails? A practical solution favoured by some tribunals is to apply a conflict of laws methodology anyway to ascertain the appropriate governing law, which is not prohibited under SIAC Rule 31. **Law governing the arbitration agreement** 31 The law applicable to the arbitration agreement determines the formal validity of the 32. It is implicitly recognised that parties are free to choose the law that governs their arbitration agreement. Art 34(2)(a) MAL and Art V(1)(a) NYC both refer to the validity of an arbitration agreement 'under the law to which the parties have subjected it'. In practice, however, parties traditionally have not expressed a choice as to the law governing the arbitration agreement. However, more and more model clauses are now expressly including a choice of law clause to govern the arbitration agreement. As a matter of good practice, it is suggested that one should expressly stipulate a choice of law to govern the arbitration agreement. 33. Separately, there have been English case law where the Courts have interpreted an express choice of law clause governing the "Agreement" (which was a defined term in that case) to include the arbitration clause as well. But what happens if the Courts find that the parties have not expressly stipulated a choice of law to govern the arbitration agreement? In England and Singapore, there have been a series of conflicting case law whereby some Courts held that the law governing the arbitration agreement is the law governing the main contract, whereas other Courts held that the law governing the arbitration agreement is the law of the seat. 34. In the absence of an express choice, the position (in both England and Singapore) now is that there is a rebuttable presumption that parties have impliedly chosen the law governing the main contract to also govern the arbitration agreement. If there is no express or implied choice of law, the system of law with the closest and most real connection with the arbitration agreement will be applied. The system of law with the closest and most real connection with the arbitration agreement is generally taken to be the law of the seat. 35. This is not an universal approach. Some jurisdictions continue to prefer to apply the law of the seat as the law governing the arbitration agreement. 5. **Law governing a party's capacity to contract** 36. A party must have the capacity to enter into an arbitration agreement. 37. Issues of incapacity may be raised before or during arbitration and may be submitted as a ground to set aside the award (Art 34(2)(a)(i) MAL), or to resist enforcement of an award (Art V(1)(a) NYC; Art 36(1)(a)(i) MAL; S 31(2)(a) IAA). 38. A party's legal capacity to contract is generally governed by the law of the party's nationality (i.e. *lex personam*), even if a different law applies to the merits of the parties' dispute. For a company, that will be the law of the place of incorporation or business. Alternatively, whether a party has validly entered into a contract may be determined by the law governing the contract. 2. **Arbitration agreement** 1. **Existence of an arbitration agreement** 1. **Definition** 39 An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement (Art 7(1) MAL; s 2A(2) IAA). **Writing requirement** 40 An arbitration agreement must be in writing (Art 7(2) MAL 1985; s 2A(3) IAA). 41 An arbitration agreement is in writing if its content is recorded in any form, whether or **Incorporation by reference** 42. Incorporation by reference refers to a situation where parties have not included an arbitration agreement in their own contract, but merely include a reference to another document which contains the arbitration agreement. 43. A reference in a contract to any document containing an arbitration clause constitutes an arbitration agreement provided the reference is such as to make that clause part of the contract (s 2A(7) IAA; Art 7(2) MAL). 44. In Singapore, the test is whether the parties had intended to incorporate the arbitration agreement (*International Research v Lufthansa Systems* \[2013\] SGCA 55 at \[34\]). This is a question of construction. Specific words of incorporation may express such an intention (*Concordia v Cornelder* \[1999\] SGHC 269). Explicit reference to the arbitration clause is not necessary in order for it to be incorporated by reference. To do so would be far too restrictive (*Gay Construction* per Kaplan J; approved in *International Research* at \[33\]). Where the reference to another document is clearly to adopt all the terms of the document referred to, then incorporation includes the arbitration clause (*Mancon v Heng Holdings* \[1999\] SGHC 324). 2. **Parties to an arbitration agreement** 4. **Non-signatories** 45 As arbitration is based on consent, an arbitration agreement can bind only those who have consented to it. However, there are various legal doctrines that may bind non­signatories to an arbitration agreement. The applicable law on issues concerning the arbitration agreement is generally the law governing the arbitration agreement. To the extent Singapore law is the law governing the arbitration agreement, be mindful that the use of some of the concepts below, such as group of companies' doctrine and estoppel, to make a non-signatory party to an arbitration agreement remain highly controversial. - - - - - 5. **Joinder** 46 Joinder and intervention are opposite sides of the same coin and fundamentally relate to consent. Joinder refers to the situation where an existing party seeks to add a new party to the proceedings and to have the third party bound by its outcome. Although the Model Law, the NYC and most arbitration agreements are silent on the question of joinder, it is addressed in most institutional rules, which give arbitral tribunals the power to consider whether there is at least *prima facie* consent by the third party to be bound by the arbitration agreement. **Consolidation** 47 Consolidation involves the fusion of two or more separate and independently existing arbitrations into one. The Model Law, the NYC and most arbitration agreements are silent on the issue of consolidation, but like the issue of joinder, the consolidation is typically addressed in most institutional rules. **Subject matter arbitrability** 48. The question of subject matter arbitrability concerns whether the subject matter of a dispute is capable of determination by arbitration. 49. For arbitrations seated in Singapore, any disputes which the parties have agreed to submit to arbitration under an arbitration agreement is arbitrable (subjective arbitrability) unless it is contrary to public policy to do so (objective arbitrability) (s 11(1) IAA). 1. **Subjective arbitrability** 50 Subjective arbitrability concerns whether the parties have agreed to arbitrate certain claims or issues. This involves interpreting the arbitration agreement, including phrases such as "in connection with" or "arising out of" the contract. \[Note: must be "commercial" for the MAL and IAA to apply; see footnote to Art 1 MAL\]. In Singapore, the SGCA has held that arbitration clauses should be construed widely such that all manner of claims relating to the contract (whether based on tort or contract; whether common law or statutory), should be regarded as falling within their scope unless there 51 In *Larsen*, despite the SGCA's broad approach towards the construction of arbitration clauses, it found that the company's pre-insolvency management was unlikely to have contemplated including avoidance claims within the scope of an arbitration agreement (at \[20\]). Even if so contemplated, those claims were non-arbitrable as they were in essence insolvency claims (at \[59\]).\]. **Objective arbitrability** 52 Objective arbitrability concerns matters the law permits parties to resolve by arbitration. A dispute is not arbitrable if it is contrary to public policy (s 11(1) IAA). In Singapore, no specific subjects have been identified by statute as being or as not being arbitrable. However, it is generally accepted that issues which may have public interest elements may not be arbitrable, e.g. citizenship, legitimacy of marriage, grants of statutory licences, validity of registration of trademarks or patents, copyrights, winding-up of companies (*Aloe Vera of America v Asianic Food* \[2006\] SGHC 78 at \[72\]). 53 In *Anupam Mittal v Westbridge Ventures* \[2023\] SGCA 1, the Singapore Court of Appeal held that "public policy" for the purposes of s 11 of the IAA includes foreign public policy. The SGCA thus adopted a novel "composite" approach in determining the arbitrability of a dispute at the pre-award stage. In the first instance, the arbitrability of a dispute is determined by the law that governs the arbitration agreement. If it is a foreign governing law and that law provides that the subject matter of the dispute cannot be arbitrated, the Singapore court will not allow the arbitration to proceed pursuant to s 11. Second, where a dispute may be arbitrable under the law of the arbitration agreement but Singapore law as the law of the seat considers that dispute to be non- arbitrable, the arbitration would not be able to proceed. 3. **Consequences of non-arbitrable disputes** 54 If a dispute is not arbitrable, an award on the dispute can be set aside (Art 34(2)(b)(i) MAL) or the courts may refuse to enforce it (Art V(2)(a) NYC; s 31(4)(a) IAA). 4. **Pathological arbitration clauses** 1. **General approach** 55. The term "pathological clause" is used to describe ambiguous or unclear arbitration agreements which contain defects liable to disrupt the smooth progress of the arbitration. 56. In Singapore, the SGCA has held that the concept of a "pathological clause" fulfilled a descriptive function rather than a prescriptive function, and labelling a clause as "pathological" did not automatically invalidate it as an agreement. Rather, "it depends on the nature or substance of the defect, or whether the defect was curable" (*Insigma Technology v Alstom Technology* \[2009\] SGCA 24 at \[38\]). In general, tribunals or courts will rely on the principle of effective interpretation to salvage the arbitration clause by restoring the true intention of the parties. However, the defect may not be curable if it is "impossible to infer an intention which is sufficiently coherent and effective to enable the arbitration to function" (*Insigma* at \[39\]). 57. Examples of defects: - Naming the arbitral institution incorrectly or identifying a non-existent institution. - Empowering one institution to administer another institution's rules. - Referring to an arbitral institution by its location rather than by its name. - Failing to indicate clearly that the award is final and binding. - Identifying a specific arbitrator who has died or become unable to act thereafter. - 2. **Naming the arbitral institutions incorrectly or identifying a non-existent situation** 58 An arbitration agreement is not nullified simply because the parties chose the rules of a non-existent organisation. In such a case, the court may consider whether the dominant purpose of the agreement was to settle the disputes by arbitration. If it was, the court may direct arbitration before such tribunal as it determines to be the most appropriate in the circumstances (*Lucky-Goldstar v Ng Moo Kee* \[1993\] 2 HKLR 73 per Kaplan J). The court may determine through interpretation of the parties' intentions a particular arbitration institution to apply. \[In *Lucky-Goldstar*, the arbitration clause selected the rules of procedure of the 'International Commercial Arbitration Association', which was a non-existent organisation. The Dfs sought a stay of proceedings and the Pfs argued that there was no binding arbitration agreement on ground of a common mistake that such an institution did not exist or was 'inoperative or incapable of being performed'. Kaplan J granted the stay of proceedings, holding that the arbitration agreement was not nullified just because parties chose the rules of a non-existent organisation.\] 59 Another example is *Re Shanghai Xinan Screenwall Building & Decoration Co Ltd* \[2022\] SGHC 58 where the Singapore High Court interpreted a potentially defective arbitration clause, which selected the "*China International Arbitration Center*" (a non­existent institution), as an agreement to CIETAC arbitration and therefore upheld an award issued by a CIETAC Tribunal. The Court held that, provided the parties objectively intended to refer to the same arbitral institution (rather than intended different arbitral institutions, or it being impossible to tell either way), the validity of the arbitration agreement would not be affected. 3. A high watermark can be seen in the case of *KVC Rice Intertrade Co Ltd v Asian Mineral Resources* \[2017\] SGHC 32, where the relevant arbitration clauses in two contracts provided by "... *arbitration as per Singapore Contract Rules*" and "... *arbitration as per Indian Contract Rules*". The Singapore High Court characterised the arbitration clauses as "bare" arbitration clauses which do not specify either the place of arbitration or the means of appointing arbitrators. The Court observed that the enforcement of "bare" arbitration clauses would give rise to practical difficulties over how the arbitral tribunal would be appointed. Be that as it may, the Court upheld the arbitration clauses by finding that the statutory appointing authority in the IAA, namely **Empowering one's institution to administer another institution's rules** 61 The SGCA has held that, in general, there is no objection in principle to providing for 62 In *Insigma*, the arbitration clause provided that *"... such disputes shall be resolved... before the Singapore International Arbitration Centre in accordance with the Rules of Arbitration of the International Chamber of Commerce... the proceedings shall take place in Singapore*". The arbitral tribunal found that it was workable because the SIAC (in a letter to the tribunal) had indicated which bodies and individual officers within the SIAC would perform the roles of the functionaries described under ICC rules. The SGHC upheld the tribunal's award. The SGCA affirmed the decision of the SGHC. 63 In *HKL Group v Rizq* \[2013\] SGHCR 5, the Court had to deal with an arbitration agreement which provided as follows. "*Any dispute shall be settled by amicable negotiation between two Parties. In case both Parties fail to reach amicable agreement, all dispute out of in connection with the contract shall be settled by the Arbitration Committee at Singapore under the rules of The International Chamber of Commerce of which awards shall be final and binding both parties. Arbitration fee and other related charge shall be borne by the losing Party unless otherwise agreed*". 64 However, no entity called the "Arbitration Committee" exists in Singapore. The Singapore High Court upheld the arbitration agreement, but on the condition that "*parties obtain the agreement of the SIAC or any other arbitral institution in Singapore to conduct a hybrid arbitration applying the ICC rules, with liberty to apply should they fail to secure any such agreement. \[The Court\] will hear parties on the issue of the imposition of any other conditions*". The Court reached this decision even though after 65 Notwithstanding these cases, it is good practice to avoid using hybrid arbitration clauses, namely, clauses that provide for arbitral institution to administer the arbitration using the rules of another institution. Even if the clause maybe upheld in Singapore, any consequent award may not be enforceable in another jurisdiction. **Drafting arbitration clauses** 66 Try as much as possible to stick to the model clauses promulgated by the different arbitral institutions. If you are free drafting, essential elements to include: - Certainty regarding the identity of the parties. - - Certainty as to the subject matter or scope of arbitrable disputes. - Certainty of the seat of arbitration. - Certainty as to the arbitral institution administering the arbitration, if any. - Certainty as to number of arbitrators---avoid having a panel of two arbitrators. - Stipulate the language of proceedings. - Stipulate the governing law of the arbitration agreement. - 1. **Clear obligation to arbitrate required** 67. The drafting of optional arbitration clauses should be avoided. Arbitration agreements should provide that the dispute shall or will be referred to arbitration. 68. If an arbitration agreement provides that a dispute may be referred to arbitration, whether there is a clear obligation to arbitrate is arguable. Some jurisdictions have equated the term "may" to "shall'' such that arbitration clauses which state that parties 69. What if the clause states that the parties "can" refer the dispute to arbitration? In *Guangdong Agriculture v Conagra International* \[1993\] 1 HKLR 113, the Hong Kong High Court (per Barnett J) upheld such a clause. The clause stated that "*All disputes... SHALL be settled by amicable negotiations. In case no settlement can be reached, the case under the dispute CAN then be submitted to... arbitration*". Construing the entire clause as a whole, the court found that the parties plainly agreed to settle any dispute by arbitration. **2.6 Stay of court proceedings (enforcement of arbitration agreement)** **Staying of court proceedings in favour of arbitration** 70. Where any party to an arbitration agreement institutes any proceedings in any court in 71. The application to stay the court proceedings must be done not later than the submission 72. Under the IAA, the court shall stay the proceedings unless it finds that the arbitration agreement is null and void, inoperative or incapable of being performed (Art II(3) NYC; Art 8(1) MAL; S 6(2) IAA). 73. But in the case of domestic arbitration, the court retains some discretion to refuse to stay court proceedings in favour of a domestic arbitration under s 6(2) of the AA. Specifically, it may do so when it is satisfied that there is *sufficient reason* why the matter should not be referred to arbitration in accordance with the arbitration agreement 74. According to the SGCA in *CSY*, in each case, the court must scrutinise the myriad factual circumstances to determine how best to manage its processes and ensure the efficient and fair resolution of the entire dispute. The term "sufficient reason" captures a broad range of factors (*Fasi Paul Frank v Speciality Laboratories Asia Pte Ltd* \[1999\] 1 SLR(R) 1138 at \[18\]). Ultimately, the factors invoked will be weighed against and will have to be found to outweigh the significant consideration that the parties had voluntarily bound themselves to arbitrate and ought therefore to be held to their agreement (*Sim Chay Koon v NTUC Income Insurance Co-operative Ltd* \[2016\] 2 SLR 871 at \[8\]--\[10\]). Amongst others, we consider the following factors instructive in the inquiry: a. b. c. d. e. f. g. 75 Some courts may refuse to grant a stay if it finds that there is, on the balance of probabilities, no dispute between the parties or that there is no valid and binding arbitration agreement between the parties. In Singapore, the courts will only conduct a *prima facie* examination of whether a dispute which is subject to the arbitration agreement exists and whether there is a valid and binding arbitration agreement between the parties. A mere denial of liability or of the quantum claimed, even in circumstances where no defence exists, will be sufficient to find a dispute for the purpose of s 6 IAA (or Art 8 MAL) (*Dalian Hualiang Enterprise v Louis Dreyfus Asia* 2005. 76 When an application to stay court proceedings is made, arbitral proceedings may nevertheless be commenced or continued, and an award may be made, while the issue is pending before the court (s 8(2) MAL). **Attaching conditions** 77 In Singapore, the court can order a stay of proceedings under such terms of conditions as it thinks fit (s 6(2) IAA), or impose any interim or supplementary orders as it thinks fit (s 6(3) IAA). The court has an unfettered discretion to impose terms and conditions upon a stay of court proceedings in favour of arbitration. However, the courts will generally be slow to interfere in the arbitration process (*The "Duden"* \[2008\] SGHC 149 at \[12\], \[15\]). ***Prima facie* finding** 78 In an application to stay court proceedings in favour of arbitration, to what extent does the domestic court consider the existence, scope and validity of the arbitration agreement? Should the court engage in a *prime facie* review, or make a definitive ruling based on a balance of probabilities? 79 In *Malini v Ventura* \[2015\] SGHC 225, it was argued that in cases where one party seeking the stay is contesting the very existence of an arbitration agreement, the court should make a definitive ruling on the existence of the arbitration agreement based on a balance of probabilities (which is applied under English law). The SGHC disagreed and preferred the *prima facie* approach. 80 The SGCA has since held, after a comprehensive review, that the court's examination of whether the arbitral tribunal has jurisdiction is *prima facie* only because this is properly a matter within the jurisdiction of the arbitral tribunal (*Tomolugen v Silica Investors* \[2015\] 1 SLR 373). The court will reach a definitive ruling only where it is 81. In *Tomolugen*, the SGCA laid down the following test under the IAA. A court hearing a stay application should grant a stay in favour of arbitration if the applicant is able to establish a *prima facie* case that: a. b. c. 82. Once this burden has been discharged by the party applying for a stay, the court should grant a stay and defer the actual determination of the arbitral tribunal's jurisdiction to the tribunal itself. The court will only refuse to grant a stay when it is clear on the evidence placed before it that one or more of the above three requirements have not been satisfied. The arbitral tribunal's determination of its jurisdiction will nonetheless remain subject to overriding court supervision in the form of an appeal under s 10(3) of the IAA against the arbitral tribunal's jurisdictional ruling, or in proceedings for setting aside or refusing enforcement of the award rendered by the arbitral tribunal (see, respectively, s 24 of the IAA and Art 34 of the Model Law, and s 31 of the IAA). 83. For completeness, the SGCA in *Tomolugen* also decided the minority oppression claims are arbitrable as a matter of Singapore law. **Jurisdiction of arbitral tribunal** 84. An arbitral tribunal's jurisdiction derives from the agreement to arbitrate. The consensual basis of arbitration means that a party can attempt to contest arbitral jurisdiction by denying the agreement to arbitrate. 85. Jurisdictional objections can be absolute (e.g. no capacity, illegal, incapable of being performed) or partial (e.g. issue falls outside scope of arbitration clause). 86. **1 Options to challenge** 86. A party wanting to contest jurisdiction has the following options available. 87. Participate fully in the arbitration and raise objections directly with the arbitral tribunal. 88. By way of illustration, assuming the seat is Singapore: a. i. ii. b. 89. Refuse to participate in the arbitration. The party can wait for the arbitral tribunal's final award then (i) seek to have that award set aside at the seat on the basis that the tribunal did not have jurisdiction to make the award; or (ii) wait for the claimant to commence proceedings to enforce the award then resist enforcement for the same reason: *Rakna Arakshaka Lanka Ltd v Avant Garde Maritime Services* \[2019\] SGCA 33 (overruling the SGHC). However, practically speaking, this is risky. If the jurisdictional plea fails, the non-participating party will be bound by an award made in circumstances where its position was never argued before the tribunal. 90. Participate in the arbitration and ask the tribunal to determine the jurisdictional objections as a preliminary issue. Boycott the arbitration if the tribunal decides, as a preliminary issue, that the tribunal has jurisdiction. For the same reasons above, this tactic is risky. Indeed, case law is presently unclear what if any recourse a boycotting party has against the tribunal's eventual award. 91. Commence litigation. In such a case, it is expected that the opposing party may contest 92. **2 Doctrine of competence-competence** 92. Under the doctrine of competence-competence, an arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement (Art 16(1) MAL). 93. **3 Validity of arbitration agreement (doctrine of separability)** 94. The jurisdiction of the arbitrator is put in question if a party contends that the arbitration agreement is invalid. 95. Separate from the doctrine of competence-competence which deals with the power of the tribunal, under the doctrine of separability, an arbitration clause in a contract is treated as an agreement independent of the other terms of the contract (Art 16(1) MAL). 96. The validity of the arbitration clause does not depend upon the validity of the other parts of the contract in which it is contained. This allows a tribunal to declare a contract invalid and yet retain its jurisdiction to decide a dispute as to the consequences of such invalidity (*Ferris v Plaister* \[1994\] 34 NSWLR 474 per Kirby J). The arbitration agreement is treated as a distinct agreement that can be void or voidable only on grounds which relate directly to the arbitration agreement (*Premium Nafta Products v Fili Shipping* \[2007\] UKHL 40 at \[17\], per Lord Hofmann). This doctrine of separability has been applied by the courts in Singapore (*Govt. of Philippines v Philippine International Air Terminals* \[2006\] SGHC 206). 97. Practically speaking, this means that if one wants to challenge the validity of the arbitration clause, one cannot simply allege the invalidity of the entire contract---the challenge needs to be targeted at the arbitration clause. 98. There is ongoing debate on the extent to which the doctrine of separability should apply when the allegation of the complainant goes towards contract formation, as opposed to contract validity. The English courts appear to take the position that the doctrine does not apply when the complaint goes towards whether the contract is even formed in the first plac[e](#bookmark5)[^6^](#fn6){#fnref6.footnote-ref}, but Singapore case law has not yet endorsed such a proposition explicitly. **3.4 Process of objecting to tribunal's jurisdiction** **Timing of objection** 98 If a party wishes to object to the tribunal's jurisdiction, he must do so not later the submission of the statement of defence (Art 16(2) MAL). A plea that the tribunal is exceeded its jurisdiction must be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. However, the arbitral tribunal may admit a late plea if it considers the delay justified (Art 16(2) MAL). 99 A party is not precluded from raising a plea that the arbitral tribunal does not have jurisdiction by the fact that he appointed, or participated in the appointment of an arbitrator (Art 16(2) MAL). 2. **Failure to object** 3. If the party has knowledge of the circumstances and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or within the time limit provided, he shall be deemed to have waived his right to object (Art 4 MAL). 4. Alternatively, if a non-signatory participates in the arbitration and fails to object to a tribunal's jurisdiction within the time limit specified, its silence may amount to entering into an arbitration agreement (Art 7(2) MAL; s 2A(6) IAA: there shall be deemed to be an effective arbitration agreement where a party asserts the existence of an arbitration agreement in a pleading and the assertion is not denied). 5. However, commencing an action in court specifically in relation to proceedings for temporary injunctive relief or interim measures does not amount to a waiver of the arbitration agreement (Art 9 MAL: it is not incompatible with an arbitration agreement for a party to request from a court an interim measure of protection). 3. **Preliminary question or award on the merits?** 103 The arbitral tribunal may rule on a jurisdictional objection either as a preliminary question \[thus bifurcating the proceedings\] or in an award on the merits (Art 16(3) MAL; s 10(3) IAA). 104 The advantage of deciding jurisdiction separately from the merits is that it potentially avoids long and costly proceeding on the merits when it is uncertain whether the arbitral tribunal possesses jurisdiction. It may make the sense to bifurcate proceedings especially if the jurisdictional issues involved can be segregated from the merits of the case. On the other hand, if the jurisdictional objections are frivolous (which is not uncommon in attempted dilatory tactics), this militates against bifurcation which would only delay progression to the merits of the case. **Appeal to tribunal's jurisdictional ruling** 105 Model Law: - - - 106 Singapore's IAA: - 5. **Scope of court review of tribunal's jurisdictional decisions** 107. Whenever a court at the seat of arbitration (typically called the curial court) reviews an arbitral tribunal's decision on jurisdiction (whether under s 10(3) IAA or at the setting aside stage), the court decides the issue *de novo* and it is not bound by the tribunal's decision. The court's jurisdiction to decide the jurisdiction of an arbitral tribunal is an original jurisdiction and not an appellate one. This is implied from the wording of Art 16(3) MAL which provides for the court to "decide the matter" (*Insigma Technology v Alstom Technology* \[2008\] SGHC 134 at \[21\]; *PT First Media v Astro Nusantara* \[2013\] SGCA 57). The court is at liberty to consider the material before it, unfettered by any principle limiting its fact-finding abilities (*AQZ v ARA* \[2015\] 2 SLR 972 at \[57\]). 108. To what extent can parties adduce further evidence before the Courts when seeking curial review of a tribunal's decision on jurisdiction? There is no definitive guidance from the Singapore courts yet, with *AQZ v ARA* suggesting a less restrictive approach, compared to *Laos v Sanum* \[2015\] SGHC 15 applying a stricter approach. B24 ARB - Practical Issues - Arbitrration or litigation ? - If Arbtitration then Institution or ad-hoc? - If Institution, then which seat and shich Institution? - Should have multi-tiered? If yes, then what should it look like? 1\. Is there a **valid** arbitration agreement? (see above, above and below) - Has the arbitration cluase been drafted with certianty? Is the subject matter of dispute arbitrable? Principle of Lex Arbitri (law of governing the arbitral procedure) Is it an \"Internaitonal Arbitration\"? Principle of Party Autonomy Principle of Separability Doctrine of Competence-Competence The legal Seat of the Abritration governs procedure (Lex Arbitri) c/f the governing law which governs the rights and obligations of the parties 2\. Is the applicant a party/claiming through a party to the arbitration agreement? (see below) 3\. Is there a dispute? (see above) 4\. Does the dispute fall within the scope of the arbitration agreement? (see above) 5\. Should the court exercise their discretion to stay the application? (see below) - a\. Is there sufficient reason why the matter should not be referred in accordance with the AA? (see below) **[s6(2)(a) AA]** b\. Is the applicant willing and still remains, ready and willing to do all things necessary for the proper conduct of the arbitration? (see below) 6\. Was the application made after the filing and service of a notice of intention to contest or not contest and before the delivering of any pleading? (see above) Other issues - Confidentiality Arbitration award - Requirements of the arbitration award Effect of the Abritration award Amendment of Arbitration award Recognition of Arbitration award Appeal against Arbitration award Following ARB, candidates should be able to: - o Draft and advise on the validity of an arbitration agreement. o Advise on how a challenge to a tribunal's jurisdiction can be made or defended. o Advise on key practical issues that arise during arbitral proceedings. o Advise on how an arbitral award can be challenged or defended. Learing Objective - Draft and advise on the **validity** of an arbitration agreement. o Advise on how a **challenge** to a tribunal's jurisdiction can be made or defended. o Advise on key practical issues that arise during arbitral proceedings. o Advise on how an arbitral award can be challenged or defended. 1\. Applicable Laws - When is an abitration, **[\'international arbitration]**\'? - Common arbitration institutions - The Uncitral Model Law has force of law in Singapore - \[13\] **[Seat]** of arbitration and the **[Law of the seat of the arbitration (lex arbitri)]** - \[14\] Relationship between Seat and procedural laws governing the arbitration - \[15\] To what extent do the institutional rules override the provisions of the lex arbitri? - \[18\] What happens of there is a conflict between arbitration rules and the model law incorporated by the IAA ? **[\[Mandatory versus non-mandatory\]]** - \[21\] What if the Parties did not agree on any arbitration rules? - \[23\] What if the Parties did not agree on the seat of arbitration? - \[25\] **[Factors]** to consider when choosing seat - \[27 \]What if the parties did not choose any governing law? Conflict of rules shall apply: (i) the seat of arbitration; (ii) the place where the award is likely to be enforced; (iii) the jurisdiction that would have been competent but for the arbitration place; (iv) the place of contractual performance; (v) the jurisdiction with some element common to the parties; (vi) general principles of private international law; or (v) the law with the closest connection to the dispute, etc. - 2\. Arbitration Agreement - **[Consensual]** means of resolving disputes - \[38\] Did the contracting party have the capcity to enter into the arbitration agreement in accordance with the governing law? \[41\] Arbitration agreement must be in writing - \[44\] Whether Parties intended to incorporate the arbitration agreement is a **[question of construction]** - \[45\] Parties must have consented to arbitration agreement notwithstanding it was not signed - \[46\] Joinder - \[47\] Consolidation - \[48\] **[Subject matter arbitrability]** - \[50\] Subjective arbitrability: assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out the relationship into which they have entered to be decided by the same tribunal - \[52\] Objective arbitrability: here a dispute may be arbitrable under the law of the arbitration agreement but Singapore law as the law of the seat considers that dispute to be non- arbitrable, the arbitration would not be able to proceed - Is there sufficient reason why the matter should not be referred to arbitration in accordance with the arbitration agreement? - \[55\] **[Pathological]** (Defective) arbitration clauses - Court may directions to cure the defect, instead of nullifying the arbitration clause - \[61\] Hybrid arbitration clauses can be enforced (conditions imposed), but should be avoided - \[66\] Drafting of arbitration clauses - \[70\] **[Stay]** of court proceedings (in favor of arbitration) - Singapore courts in a Domestic arbitration - **[Factors]** considered when granting stay of proceedings in favour of arbitration \[**[Sufficient reason]**\] - **[Differences]** between the AA and the IAA - s6(2) AA Court\'s discretion to deline stay \[sufficient reason\] s45 AA Determination of preliminary point of law - s49 (1) AA Appeal against award based on question of law - \[77\] Attaching conditions - 3\. Jurisdiction of arbitral tribunal - \[54\] Dispute is not one that is arbitrable - \[84\] Jurisdiction of the arbitration tribunal is derivied from the agreement ot arbitrate - \[86\] Option to challenge the tribunal\'s jurisdiction - \[92\] **[doctrine of competence-competence]** - Tribunal may rule on its own jurisdiction - **[Doctrine of separability - You must challenge the arbitration clause and not just the contract itself]** - Timing of the objection - Failure to object - Preliminary question or award of merits - **[Appeal]** to tribunal\'s jurisdictional ruling - **[Scope of court review]** of tribunal's jurisdictional decisions is de novo (i.e. from the beginning) ::: {.section.footnotes} ------------------------------------------------------------------------ 1. ::: {#fn1} []{#bookmark0.anchor} See specific States here: [[https://uncitral.un.org/en/texts/arbitration/modellaw/commercial\_arbitration/status]](https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration/status)[↩](#fnref1){.footnote-back} ::: 2. ::: {#fn2} [[https://uncitral.un.org/en/texts/arbitration/modellaw/commercial\_arbitration/travaux]](https://uncitral.un.org/en/texts/arbitration/modellaw/commercial_arbitration/travaux)[↩](#fnref2){.footnote-back} ::: 3. ::: {#fn3} []{#bookmark2.anchor} [[https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/mal-digest-2012-e.pdf]](https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/mal-digest-2012-e.pdf)[↩](#fnref3){.footnote-back} ::: 4. ::: {#fn4} []{#bookmark3.anchor} In some jurisdictions a[d hoc arbitration is not reco]g[nized: see Articles 16 and 18 of the Arbitration Law of the PRC (which is under]going [revision at the moment).][↩](#fnref4){.footnote-back} ::: 5. ::: {#fn5} []{#bookmark4.anchor} *"The Republic of Singapore will on the basis of reciprocity apply the said Convention to the recognition and enforcement of only those awards which are made in the territory of another Contracting State."*: [[https://www.newyorkconvention.org/countries]](https://www.newyorkconvention.org/countries)[↩](#fnref5){.footnote-back} ::: 6. ::: {#fn6} [[]{#bookmark5.anchor} *DHL Project & Chartering Ltd v Gemini Ocean Shi*]*p[ping Co Ltd]* [\[2022\] EWCA 1555.][↩](#fnref6){.footnote-back} ::: :::