A co and others v D and another
Jurisdiction | Singapore |
Judge | Tan Teck Ping Karen AR |
Judgment Date | 20 June 2018 |
Neutral Citation | [2018] SGHCR 9 |
Court | High Court (Singapore) |
Docket Number | Suit No 102 of 2018 (Summons No 1304 of 2018) |
Year | 2018 |
Published date | 21 August 2018 |
Hearing Date | 02 May 2018,23 May 2018,09 May 2018,31 May 2018 |
Plaintiff Counsel | Mr Niklas Wong See Keat and Ms Thara Gopalan (TSMP Law Corporation) |
Defendant Counsel | Mr Mahesh Rai, Mr Raeza Ibrahim and Ms Grace Morgan (Drew & Napier LLC) |
Subject Matter | Arbitration,Stay in favour of arbitration,Case management stay |
Citation | [2018] SGHCR 9 |
This application to stay proceedings in favour of arbitration is the latest salvo in the long string of court proceedings between the parties to the joint venture agreement which led to creation of the joint venture company, A co.
In Summons 1304/2018, D & E seek an order that the present suit be stayed in favour of arbitration pursuant to section 6 of the International Arbitration Act (Cap 143A) (“IAA”). Alternatively, D & E seek a case management stay pursuant to the Court’s inherent jurisdiction.
I decline to grant a stay of proceedings on both of the grounds advanced by D & E and give my reasons below.
Background facts The parties The relationship between parties are set out in the diagram below which was provided by D & E:
A co is incorporated in Singapore pursuant to a joint venture between F co and G co.
On 8 December 2009, A co, F co and G co, among others, entered into an investment agreement (“IA”) which governs the relationship of the parties to the joint venture.
The shares in A co are currently held by G co (55.35%) and F co (44.65%). A co is the investment holding company of,
Both H co and C co are incorporated in Singapore.
D has at all material times been the Executive Chairman and the Chief Executive officer of G co. He is also a director and the Chairman of A co.
E, is the son of D and is a director of A co. E was the managing director of C co and resigned from this position on or about 18 July 2016.
It is alleged that D & E were at all material times
On 26 January 2018, Pang Khang Chau JC (“Pang JC”) granted F co leave under Section 216A of the Companies Act (Cap. 50) in HC/OS XD/2016 (“OS XD”) to bring an action against D & E on behalf of A co, H co and C co (collectively the “Companies”). Appeals to the Court of Appeal against Pang JC’s decision have been filed.
In Suit 102, it is alleged that D & E, as directors of the Companies, are in breach of their fiduciary duties as they have placed themselves in a position of conflict, failed to make full and frank disclosure of their interest in related party transactions and have benefited from these related party transactions.
The legal proceedings between partiesTo date, the parties have been involved in numerous legal proceedings.
The 1st proceeding. HC/OS XE/2015 (“OS XE”) is an application filed pursuant to section 199 of the Companies Act by a director on the Board of A co for documents from A co. On 11 March 2016, the Court made an order that the director and his appointed public accountant, KordaMentha Pte Ltd (“KordaMentha”) have access to relevant documents from A co. On 15 July 2016, KordaMentha prepared a preliminary report (“KordaMentha Report”).
The 2nd proceeding. Based on the findings in the KordaMentha Report, F co commenced OS XD seeking leave under section 216A of the Companies Act to bring proceedings against D & E in the name of the A co, H co and C co for alleged breaches of fiduciary duties. On 26 January 2018, Pang JC granted leave to F co to bring a derivative action on behalf of A co, H co and C co against D & E. As mentioned above, both parties have filed notices of appeal against this decision.
3rd proceeding. On 14 June 2016, F co commenced arbitral proceedings against A co in SIAC/ARB XA/2018 (“ARB XA”) seeking a declaration that it is entitled to exercise its rights under clause 10.4 of the IA to,
4th proceeding. HC/OS XB/2017 (“OS XB”) is an application by F co for declarations that approval of the annual accounts of A co and its subsidiaries for the financial year ending 31 December 2015 (“2015 Accounts”) by A co’s board of directors and its shareholders are void and
5th proceeding. HC/OS XC/2018 (“OS XC”) is an application by A co for a declaration that the arbitral tribunal in ARB XA has no jurisdiction to hear the dispute placed before the tribunal in accordance with the expedited procedure (“Expedited Procedure”) under the SIAC Rules 2013 (“SIAC Rules”). Belinda Ang Saw Ean J (“Ang J”) heard OS XC and made no orders. A co has file an application for leave to appeal against Ang J’s decision which is pending.
Issues to be determined D & E are not signatories to the IA which contains the arbitration agreement. Therefore, the issues which arise in this application are:
Section 6 of the IAA provides as follows:
[Emphasis added]
The core issue is whether D & E, who are not signatories to the IA, are considered parties to the arbitration agreement contained in the IA.
D & E say they should be considered “parties” to the arbitration agreement on the following bases:
D & E acknowledge that they are not signatories to the IA and are not parties to the arbitration agreement. Nonetheless, D & E take the position that the signatories to the IA intended D & E to be entitled to invoke the arbitration agreement.
D & E argue that a non-signatory can be considered to be a party to an arbitration agreement if parties intended the non-signatory to be party to the arbitration agreement. They refer to
The touchstone should be whether the parties intended that a non-signatory be bound and benefitted by the arbitration clause . Answering that question cannot be achieved through abstract generalizations, butrequires considerations of the arbitration clause’s language and the relations and dealings among the parties in a specific factual setting .[Emphasis added]
Clause 1.1 of the IA provides as follows:
…
“
Affiliate ” means:…
…
“
Group ” (except where specifically defined otherwise) means [A co] and its subsidiaries for the time being (including, for the avoidance of doubt, [B co and … and C co] with effect from Completion) and any New Holding Company, and “Group Company ” shall be construed accordingly
D & E submit that as defined in the IA, D is an Affiliate and E, as the son of D, also falls under the definition of Affiliate. In addition, it is submitted that A co, H co (as the subsidiary of B co) and C co all fall under the definition of Group Company.
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