While it might seem to a commercial negotiator to be a point of pedantic detail in drafting an arbitration clause, the recent decision of Anupam Mittal v. Westbridge Ventures  emphasises the importance for commercial parties to carefully consider an express choice of law for the arbitration agreement itself, to ensure the parties’ intention to arbitrate is preserved and not disrupted. If nothing else, lengthy disruption and the costs of litigating a satellite issue as to jurisdiction can be avoided by front end planning.
In this case, the Singapore Court of Appeal (“SCGA”) considered what law governs the arbitrability of a dispute. The arbitrability of a dispute is an important issue for parties considering arbitration as a method of dispute resolution, as claiming a dispute is non-arbitrable can be deployed by opponents seeking to avoid arbitration.
In considering whether to grant an anti-suit injunction restraining a breach of an agreement to arbitrate, the SCGA decided that the arbitrability of a dispute is determined first by reference to the law governing the arbitration agreement and then by reference to the law of the seat. In reaching this decision the SCGA provided guidance as to how to determine the law governing the arbitration agreement.
The dispute involved a disagreement between shareholders of the popular online and offline matrimonial service company Shaadi.com. Shaadi.com was co-founded by Anupam Mittal (“Mittal”) and his cousins, who entered into a shareholders’ agreement with Westbridge Ventures II Investment Holdings (“Westbridge”), a Mauritius incorporated private equity fund.
The shareholders’ agreement included a clause that any “dispute[s] relating to the management of the Company or relating to any of the matters set out in [the SHA]” should be referred to ICC arbitration. The arbitration clause provided for: (i) Indian law as the governing law of the shareholders’ agreement; and (ii) Singapore as the seat of arbitration,but was silent as to the law governing the arbitration agreement (the point being that many jurisdictions consider arbitration agreements as ‘contracts within contracts’ – several and separable from the main contract in which they live).
Despite the arbitration agreement, Mittal commenced proceedings before the Indian courts after a dispute arose relating to the shareholders’ agreement. In response, Westbridge brought an action before the Singapore courts seeking an anti-suit injunction to stop the Indian court proceedings.
Source: Lucy Preston, Sara Little, Karthik Kumar & Lynette Lim | Orrick Herrington & Sutcliffe LLP