Status as on- 15/03/2023
In its recent decision Mittal v Westbridge Ventures, the Singapore Court of Appeal reviewed several fundamental arbitration law issues, including the proper law of arbitration agreements and determining whether law determines whether a particular case is arbitrable. The case is likely to be of particular importance to Indian practitioners since it demonstrates why, in reality, determining the right law of the arbitration agreement is important, particularly when one of the possibilities is Indian law.
The matter developed from a disagreement between the shareholders of People Interactive (India) Pvt. Ltd. This corporation owns and runs the popular matrimony website shaadi.com. Westbridge invested in the company in 2006 and signed a Shareholders’ Agreement with the entrepreneurs (including Mr. Mittal, the appellant in the Singapore Court of Appeal). The SHA stated in clause 20.2 that “this Agreement and its performance shall be governed by and construed in all respects in accordance with the laws of the Republic of India,” but it also included an ICC arbitration clause that provided for arbitration in Singapore.
In 2017, disagreements emerged as a result of Westbridge’s hint that it wished to sell its shares to an entity that the promoters perceived to be a competitor of the Company. The promoters filed a complaint with the National Company Law Tribunal (NCLT) seeking remedy for what they claimed was tyranny and mismanagement. In response, Westbridge filed an anti-suit injunction in Singapore, preventing the promoters from pursuing the NCLT proceedings because the matter was covered by the arbitration agreement in article 20.
Although on entirely different grounds, the Singapore Court of Appeal reached the same judgment. The UK Supreme Court had previously noted in Enka v. Chubb that it would be anomalous if the same question as arbitrability were to be decided by reference to one law at the pre-award stage but a different law at the post-award stage. Judith Prakash JA made the same point in her conclusion. If an award is contested after it has been made on the grounds that one or more of the claims were not arbitrable, the dispute will be resolved in accordance with the law that governs the arbitration agreement.
Conclusion:
Three factors make this instance noteworthy. First, it draws attention to the possibility that a dispute may not be arbitrable unless it is so in accordance with both the law of the seat and the legislation that governs the arbitration agreement (and therefore the importance of choosing with care both a seat and the proper law of the arbitration agreement). It further underlines that contrary to the UK Supreme Court, the Singapore Court of Appeal normally does not treat an express choice of law clause in a contract as an express choice of law for the arbitration agreement contained in that contract (it can, at the most, amount an implied choice of law). Third and most importantly, it illustrates clearly why the “validation exception” was found.
Disclaimer: The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us at rera@centrik.in & ibc@centrik.in
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