SGP Court of Appeal: BXH v BXI [2020] SGCA 28 / setting aside of an award

Date: 19.05.2020

In the case of BXH v BXI [2020] SGCA 28, (https://www.supremecourt.gov.sg/docs/default-source/module-document/judgement/-2020-sgca-28-pdf.pdf) the Singapore Court of Appeal allowed an appeal to set aside a substantial part of an arbitral award under Article 34(2)(a)(i) of the UNCITRAL Model Law on International Commercial Arbitration (“Model Law”). In coming to its decision, the Court of Appeal considered a number of novel issues arising from the assignment, novation and reassignment of the legal right to arbitrate over to certain debts.

The Court of Appeal (“the Court”) pronounced that where parties demonstrate a real intention to resolve matters by arbitration, the court ought to give effect to that intention.

The Court also explained that an arbitration agreement does not have a purpose or a life independent of the substantive obligations that it attaches to. The right to arbitrate must necessarily attach to a specific right. As such, the assignment of a debt from one party to another also results in an assignment of the right to arbitrate a dispute in respect of that debt.

In essence, the Court adjudicated that an arbitrator does not have jurisdiction over a dispute if the right of suit was only obtained by the claimant after the commencement of arbitration.

Additionally, the Court held that a dispute relating to the right to arbitrate a claim, following an assignment of the right, falls under Article 34(2)(a)(i) of the Model Law which concerns the existence of an arbitration agreement, instead of Article 34(2)(a)(iii) which relates to the scope of an arbitration agreement.