Singapore Court of Appeal confirms the validity of “unilateral option to arbitrate” clauses

In the recent decision of Wilson Taylor Asia Pacific Pte Ltd v Dyna-Jet Pte Ltd [2017] SGCA 32, the Singapore Court of Appeal confirmed that the Singapore courts will enforce a dispute resolution clause which gives only one party the option to arbitrate. The court also clarified the requirements and threshold for a stay of proceedings to be granted under section 6 of the Singapore International Arbitration Act (“IAA”)

Background

The background to the dispute, as well as the decision of the court below, is set out in our previous report which can be accessed here. In summary, the decision revolved around a dispute resolution agreement which allowed only the Respondent (“Dyna-Jet”) to elect to refer any dispute to arbitration in Singapore (“Disputes Clause”). A dispute arose and Dyna-Jet elected to commence proceedings in the Singapore court. In response, the Appellant applied for a permanent stay of the Singapore court proceedings to compel Dyna-Jet to bring the dispute to arbitration (“Stay Application”).

The Stay Application was dismissed by the Singapore High Court, which upheld the decision of the assistant registrar below.

Source: Singapore Court of Appeal confirms the validity of “unilateral option to arbitrate” clauses – Lexology