Doshion Ltd v Sembawang Engineers and Constructors Ptd Ltd [2011] SGHC 46

Background

Section 3 of the International Arbitration Act (“IAA”) provides that the UNCITRAL Model Law has force of law in Singapore, subject to contrary provisions of the IAA.

Article 16 of the Model Law provides that an arbitral tribunal may rule on its own jurisdiction.

Facts

The plaintiff, Doshion Limited, was an Indian company, and a sub-contractor of the defendant, a Singaporean company. A dispute arose under two sub-contracts between the parties. The sub-contracts contained an arbitration agreement, and an arbitration was commenced.

Before the hearing, the plaintiff applied to the High Court by way of Originating Summons for a declaration that the parties had reached a binding settlement agreement and that the arbitration was therefore terminated, and for an injunction restraining the defendant from continuing with the arbitration.

The defendant did not admit the existence of the settlement agreement (which the plaintiff stated was an oral agreement between the parties’ solicitors) and argued that the plaintiff’s application amounted to a claim that the arbitral tribunal had become functus officio by reason of the settlement agreement.

Decision

The court referred to the decision of the House of Lords in Fiona Trust & Holding Corp v Privalov [2007] UKHL 40, in which the House of Lords held that an arbitration agreement should be construed expansively. The House of Lords also stated that the construction of an arbitration agreement should start from the assumption that the parties to the agreement are likely to have intended any dispute arising out of the relationship between them to be decided by the same tribunal.

The court stated that the question of whether or not there was a valid settlement agreement in this case was a dispute arising out of the relationship between the parties. Accordingly, unless the wording of the arbitration agreement clearly stated otherwise, the question of whether there was a settlement agreement in place was a question for the arbitral tribunal and should not be “stolen” from it by an application to the court for an injunction. Article 16 of the Model Law made it clear that the tribunal had the power to rule on its own jurisdiction.

The court therefore dismissed the plaintiff’s application.