27 February 2023

Anupam Mittal v Westbridge Ventures II Investment Holdings [2023] SGCA 1

In Anupam Mittal v Westbridge Ventures II Investment Holdings, the Singapore Court of Appeal laid down the approach for determining the arbitrability of a dispute at the pre-award stage, and provided guidance to determine the proper law of an arbitration agreement where no express choice has been made.

The appellant was a founder of a company incorporated in India which owned and operated a matrimonial service (“Company”). The respondent was a private equity fund which had invested in the Company. In 2006, the appellant and the respondent entered into a share purchase agreement which regulated the parties’ rights and responsibilities as shareholders (“SHA”). The SHA provided for the laws of India to be the governing law, and also provided that any dispute relating to the management of the Company or relating to any of the matters set out in the SHA was to be referred to arbitration in Singapore under the rules of the International Chamber of Commerce.

The parties’ relationship soured in 2017 when the respondent expressed an interest in exiting from the Company. In 2021, the appellant filed a petition in India’s National Company Law Tribunal (“NCLT”) seeking remedies for corporate oppression (“NCLT Proceedings”). The respondent, placing reliance on the arbitration agreement, reacted to the filing of the NCLT Proceedings by seeking an anti-suit injunction in the Singapore High Court. The High Court Judge (“Judge”) found that the arbitration agreement was breached by the commencement of the NCLT Proceedings and granted the anti-suit injunction. Dissatisfied, the appellant appealed.

Decision of the Court of Appeal

The Court of Appeal dismissed the appeal and maintained the anti-suit injunction.

Arbitrability of a dispute at the pre-award stage

While the Court of Appeal reached the same outcome as the Judge, it disagreed with the Judge’s finding that the law of the seat of arbitration applied to determine the issue of subject-matter arbitrability at the pre-award stage, observing that such an approach did not place enough weight on the importance of public policy in relation to issues of arbitrability.

Section 11 of the International Arbitration Act 1994 (“IAA”) provides that any dispute which parties have agreed to submit to arbitration under an arbitration agreement may be determined by arbitration “unless it is contrary to public policy to do so”. The Court of Appeal found that the public policy referred to in section 11 of the IAA is not limited to the public policy of Singapore but extends to foreign public policy where this arises in connection with essential elements of an arbitration agreement.

Thus, if it is contrary to local or relevant foreign public policy to determine a dispute arising under an arbitration agreement by arbitration, that dispute cannot proceed to arbitration in Singapore. In the case of a foreign arbitration agreement, that would be the result even if Singapore law might hold the dispute in question to be capable of resolution by arbitration. This does not mean that the law of the seat is irrelevant to the arbitrability issue. On the contrary, if the arbitration concerns an issue that happens to be non-arbitrable by the law of the seat, that would be an additional obstacle by reason of article 34(2)(b)(i) of the UNCITRAL Model Law on International Commercial Arbitration, which authorises the court to set aside an arbitral award if it finds that the subject matter of the dispute is not capable of settlement by arbitration under Singapore law.

The Court of Appeal thus adopted a “composite” approach in determining the arbitrability of a dispute at the pre-award stage:

  • In the first instance, the arbitrability of a dispute is determined by the law that governs the arbitration agreement. If it is a foreign governing law and that law provides that the subject matter of the dispute cannot be arbitrated, the Singapore court will not allow the arbitration to proceed because it would be contrary to public policy (albeit foreign public policy), pursuant to section 11 of the IAA, to enforce such an arbitration agreement.
  • Further, because of the operation of section 11 of the IAA, where a dispute may be arbitrable under the law of the arbitration agreement but Singapore law as the law of the seat considers that dispute to be non-arbitrable, the arbitration would not be able to proceed.

In both cases, it would be contrary to public policy to permit such an arbitration to take place.

Proper law of the arbitration agreement

The Court of Appeal then proceeded to determine the proper law of the arbitration agreement. Applying the three-stage test in BCY v BCZ [2017] 3 SLR 357, the Court of Appeal found that:

  • The parties did not make an express choice of law for the arbitration agreement. The reference to Indian law being “in all respects” the governing law of “[the SHA] and its performance” is not to be construed as expressly choosing the law to govern the arbitration agreement as well even if that agreement is contained within the main contract.
  • The intention of the parties to settle their disputes by arbitration with the courts playing a supporting role by granting interim relief and enforcing any award in terms issued by the tribunal negated the implication that Indian law was intended to govern the arbitration agreement.
  • Singapore law had the most real and substantial connection with the arbitration agreement in the SHA. The SHA provided for arbitration to take place in Singapore. As the law of the seat of the arbitration, Singapore law would govern the procedure of the arbitration, including challenges to the tribunal or its jurisdiction and the award when the same is eventually issued.

Accordingly, the Court of Appeal found that Singapore law was the law of the arbitration agreement.

The Court of Appeal agreed with the Judge that the institution of the NCLT Proceedings was a breach of the arbitration agreement and concluded that there was no ground on which to discharge the anti-suit injunction granted by the Judge.

Reference materials

The Court of Appeal judgment is available on the Singapore Courts website www.judiciary.gov.sg.