Singapore Court Of Appeal Rules That The Law Of The Arbitration Agreement Determines Arbitrability At The Pre-Award Stage

• Law Firm: Morrison & Foerster LLP
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Contracts and Commercial Law, Arbitration & Dispute Resolution
• Author: Ms Sarah Thomas, Yi-Jun Kang and Lingeng Zhuang
• Published date: 23 January 2023

In Anupam Mittal v Westbridge Ventures II Investment Holdings [2023] SGCA 1, the Singapore Court of Appeal ("SGCA") held that the law governing the arbitration agreement governs arbitrability at the pre-award stage, and provided some guidance regarding the application of the three-stage test laid down in BCY v BCZ [2017] 3 SLR 357 for determining the law of the arbitration agreement where the parties have not made an express choice of law. This decision highlights that parties should pay careful attention to the drafting of arbitration clauses and expressly specify a governing law for their arbitration agreement to avoid protracted disputes regarding the proper law of the arbitration agreement and/or unintended consequences on the scope of the arbitration agreement.

Background

Instead of having their disputes decided by national courts, parties can enter into an arbitration agreement to submit disputes between them to arbitration. Arbitration agreements, and their existence and validity, however, are treated as separate from the underlying agreements in which they are contained. While parties often give careful thought to the governing law of their substantive agreements, they rarely specify the law governing their arbitration agreement. This often gives rise to protracted disputes on the proper law of the arbitration agreement, especially in circumstances where the substantive governing law is different from the law of the seat of arbitration.

In addition to a valid arbitration agreement, for an arbitration to proceed, the dispute referred to arbitration must also be arbitrable, that is, the type of dispute must not have been reserved to be resolved exclusively by domestic courts. There is broad consensus internationally, grounded in the UNCITRAL Model Law on International Commercial Arbitration (the "Model Law") that, at the post-award stage, the law of the forum, which is usually the law of the seat of an arbitration, governs arbitrability. The Model Law does not address, however, the law governing arbitrability at the pre-award stage. Presumably in order to avoid the anomalous result that the same court may come to different conclusions on arbitrability depending on the stage of the arbitration, courts in both Model Law and non-Model Law jurisdictions (including England, the United States and France) have held that the law of the forum also governs issues of arbitrability at the pre-award stage. In Anupam v Westbridge, the SGCA had the opportunity to consider the question of which law should govern arbitrability at the pre-award stage. Diverging from the position taken...