Hua Xin Innovation Incubator Pte Ltd v IPCO International Ltd
|Keith Han AR
|14 November 2012
| SGHCR 18
| SGHCR 18
|High Court (Singapore)
|13 December 2012
|Suit No 729 of 2012 (Summons 4865 of 2012)
|Low Chai Chong, Loh Kia Meng, Diyanah Baharudin and Patrick Wong (Rodyk & Davidson LLP)
|Imran Hamid Khwaja, Moiz Haider Sithawalla, Derek Low and Michelle Ong (Tan Rajah and Cheah)
|Arbitration,stay of court proceedings,court's discretion under Arbitration Act,Civil Procedure,Consolidation
|07 November 2012
This was an application by IPCO International Limited (“the defendant”) to stay the proceedings commenced by Hua Xin Innovation Incubator Pte Ltd (“the plaintiff”) in Suit No 729 of 2012 in favour of arbitration.The facts
The plaintiff is a limited exempt private company involved in incubator marketing and consultant services, as well as investment and business consultancy1. The defendant is a public company limited by shares and listed on the Singapore Stock Exchange2.
On 12 March 2012, the plaintiff and the defendant (collectively referred to as “the parties”) entered into an agreement to record their principles of agreement and certain commitments (“the Agreement”), which would form the basis for the negotiation of the Joint Development Agreement in relation to the Falling Water Land project (“the project”).3 The project relates to the development of certain parcels of land in Washington, United States of America. It was envisaged under the Agreement that the parties would subsequently enter into the Joint Development Agreement with certain other relevant parties for the purposes of implementing the project.4The advance amount
Under Clause 3.1 of the Agreement, the plaintiff made an advance payment of S$1,350,000.00 (“the advance amount”) to the defendant in exchange for the defendant granting the plaintiff the right to participate in the joint development of the project. Clause 3.2 of the Agreement further provided that if the Agreement were to lapse or terminate, the advance amount would be repaid by the defendant to the plaintiff immediately without interests. Specifically, Clause 6.1 stipulated that if the Joint Development Agreement was not executed within 2 months from the date of the Agreement, the Agreement would lapse and cease to have further effect. As a result of that, the defendant would come under an obligation to return the advance amount to the plaintiff within five (5) working days (see Clause 6.2 of the Agreement).The arbitration agreement
Clause 7, the dispute resolution clause, read as follows:
Any dispute arising out of or in connection with this Agreement including any question regarding its existence, validity or termination shall be referred to and finally resolved by arbitration in Singapore according to the Arbitration rules of the Singapore International Arbitration Centre for the time being in force which rules are deemed to be incorporated by reference into this Clause. The Tribunal shall consist of one (1) arbitrator. All arbitration proceedings shall be in the English language. The decision of the arbitrator shall be final and binding on all the Parties.
As it turned out, on or about 12 May 2012, the Agreement lapsed and ceased to have further effect as the Joint Development Agreement was not executed. On 31 August 2012, the plaintiff filed Suit 729 of 2012 (“the proceedings”) against the defendant to claim the advance amount. The defendant has not filed any defence or taken any step in the proceedings, save that it has filed the present application for a stay in favour of arbitration.Suit 630 of 2012/P (“Suit 630”) and the global settlement agreement
Earlier, on 29 July 2012, several plaintiffs commenced proceedings against a company, Sunmax Global Capital Fund 1 Pte Ltd (“Sunmax”) and one Li Hua in Suit 630. The plaintiff and the defendant were not parties to Suit 630. However, Ms Quah Su-Ling (“Ms Quah”), a director and CEO of the defendant who filed the affidavits in support of the present stay application, is one of the plaintiffs in Suit 630. At the same time, the 2
Central to the dispute in Suit 630 is a purported global settlement agreement (“the global settlement agreement”) reached by the parties at a meeting held on 24 July 2012.5 Under the global settlement agreement, the plaintiffs in Suit 630 were to repay various debts owed to Sunmax. In exchange, Sunmax would return certain shares which it held as security for the debts.
What is material for present purposes is that the defendant claims that the advance amount was included as part of the global settlement agreement.6 The plaintiff, however, disputes this.7The parties’ submissions The defendant’s arguments
In support of its application for a stay of the proceedings in favour of arbitration, the defendant relied on the following grounds8:
On the other hand, the plaintiff argued that the stay application should be dismissed for the following reasons. First, there was no dispute referable to arbitration as the defendant had admitted unequivocally that it owes the plaintiff the advance amount. The only dispute relied upon by the defendant
Second, the plaintiff submitted that a stay of the present proceedings in favour of arbitration would result in a multiplicity of proceedings as the existence of the global settlement agreement is the subject matter of Suit 630. Furthermore, the court has discretion to refuse to grant a stay of proceedings under s 6(2) of the AA, which the plaintiff argued applied instead of the IAA.Issues before the court
In light of the foregoing, the following issues arose for my determination:
Where the seat of arbitration is Singapore, the law of the arbitration under these Rules [ie, the SIAC Rules 2007] shall be the International Arbitration Act (Chapter 143A, 2002 Ed, Statutes of the Republic of Singapore) [ie, the IAA] or its modification or re-enactment thereof.
The Court of Appeal in
In our view, if the parties have agreed that the
lex arbitriis the IAA, it is difficult to see how the parties can be said not to have agreed that the IAA was to apply within the meaning of s 5(1) of the IAA.
In the present case, however, the reference to the “to the Arbitration rules of the Singapore International Arbitration Centre for the time being in force” is to the SIAC Rules 2010. Under the SIAC Rules 2010, the previous Rule 32 from the SIAC Rules 2007 has been deleted and under the new Rule 18, it is no longer provided that the IAA will automatically apply to the conduct of the arbitration proceedings where the seat of arbitration is Singapore (See Richard Tan, Daniel Lim & Mervyn Cheong, “
S 5(1) and (2) of the IAA reads as follows:
—(1) This Part and the Model Law shall not apply to an arbitration which is not an international arbitration unless the parties agree in writing that this Part or the Model Law shall apply to that arbitration.
(2) Notwithstanding Article 1(3) of the Model Law, an arbitration is international if —
a) at least one of the parties to an arbitration agreement, at the time of the conclusion of the agreement, has its place of business in any State other than Singapore; or
b) one of the following places is situated outside the State in which the parties have their places of business:
(i) the place of arbitration if determined in, or pursuant to, the arbitration agreement;
(ii) any place where a substantial part of the obligations of the commercial relationship is to be performed or the place with which the subject-matter of the dispute is most closely connected; or
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