Arbitration vs. Litigation in Singapore (hint: Arbitration wins)
Need to know:
s216 minority shareholder claims are arbitrable
General presumption that all claims within an arbitration clause are arbitrable (even if arising under statute)
If court proceedings are stayed for arbitration and the arbitration is slow, you might be able to go back to court
Further details:
Silica claimed the majority shareholders had the company issue shares in breach of the M&AA thus diluting Silica and leaving it out of management.
Lionsgate applied for stay in favour of arbitration under s6(1) of the International Arbitration Act which lets the court order a stay if it is “satisfied” that there is no “sufficient reason” why the matter should not be arbitrated.
High Court felt that the dispute was not arbitrable because (i) claim was under statute and not under SPA with arbitration clause; (ii) not all parties and aspects of the dispute caught by arbitration agreement; (iii) procedural complexity.
But Court of Appeal allowed arbitration because there was no public element in commercial disputes that required a court instead of an arbitrator.
CA also noted that only a prima facie review of the arbitration agreement was required, i.e. existence. Also declared that if there’s an arbitration agreement there’s a presumption that the subject matter is arbitrable unless Parliament had a different intention or against public policy.
CA rejected HC’s concerns of remedial inadequacy and procedural complexity - BUT said that the stay would be conditional upon the arbitration being administered expeditiously, undue delay would enable a party to apply to Court for the stay to be lifted.
Tomolugen v Silica Investors [2015] SGCA 57
Also see:
Titan Unity [2013] SGHC 28
Malini Ventura v Knight Capital [2015] SGHC 225