Private Equity Firm Prevails Over Indian Promotor's Guerrilla Tactics, Making New Law On The Arbitrability Of Disputes In Singapore

• Author: Mr Tomas Furlong, Daniel Waldek and Mark Teo
• Law Firm: Herbert Smith Freehills
• Published date: 12 January 2023

In an ugly corporate divorce related to an online matrimonial website, the Singapore Court of Appeal decided that the arbitrability of a dispute will be determined at the pre-award stage by reference first to the law governing the arbitration agreement (Anupam Mittal v Westbridge Ventures II Investment Holdings [2022] SGCA, available here).

Claiming that a dispute is non-arbitrable is a classic "guerrilla tactic" deployed by parties seeking to avoid arbitration. This is often seen in disputes arising from Asian jurisdictions that take a wider or less bright-line policy view as to what disputes are incapable of being resolved by arbitration compared to safe arbitral seats such as Singapore or Hong Kong. The potentially non-arbitrable issues may overlap with contract issues, such as minority oppression claims that can overlap with contractual rights under an SPA or subscription agreement, creating practical problems for parties seeking to exercise their contractual rights.

This case involved minority oppression claims brought by the promotor/founder of an Indian Company against a private equity fund seeking to exit its investment. Minority oppression disputes are arbitrable under Singapore law (see our blog here) but may not be arbitrable under Indian law.

Whilst the Court of Appeal took a different approach to the High Court in identifying the law governing arbitrability, the Court of Appeal ultimately upheld the decision from the High Court that Singapore law applied to arbitrability, and therefore the dispute was arbitrable. This was because the law of the arbitration agreement and the law of the seat were both Singapore law, even though the contract was governed by Indian law.

The key practical takeaway for negotiating the governing law of a contract is...