Law of Seat Ruling by Singapore High Court
A landmark decision by Singapore’s High Court that the ‘law of the seat’ applies when determining whether a dispute is arbitrable “carries the potential for substantial commercial and legal consequences for contracting parties,” according to an expert.
It comes after the court ruled in favour of Westbridge Ventures II Investment Holdings granting an anti-suit injunction against Mr Anupam Mittal, who had launched legal proceedings in India over alleged minority oppression and mismanagement of the Mumbai-based company People Interactive.
Both parties were shareholders in People Interactive and had previously entered into a shareholders’ agreement under Indian law, which contained a clause stating that any dispute “relating to the management of The Company or relating to any of the matters set out in this Agreement… shall be referred to arbitration”.
The agreement also specified that Singapore was the seat of arbitration – a designation that would typically give Singapore courts broad supervisory jurisdiction over any proceedings.
Westbridge applied to the courts in Singapore seeking an anti-suit injunction against the Mumbai proceedings.
It argued that the dispute should be dealt with through arbitration on the ground that it fell within the arbitration clause in their shareholders’ agreement.
Mittal opposed the injunction and argued that the law governing the shareholders’ agreement was Indian law and that, under Indian law, disputes relating to oppression and mismanagement are not arbitrable.
The High Court decided that the law of the seat – rather than the law of the arbitration agreement – was applicable for determining whether the parties’ dispute was arbitrable at the pre-award stage. read more