Singapore High Court decides that the issue of arbitrability should be determined by the law of the seat of arbitration; not the law governing the arbitration agreement 

In Westbridge Ventures II Investment Holdings v Anupam Mittal [2021] SGHC 244, the Singapore High Court held that the subject matter arbitrability should be determined by the law of the seat of arbitration. In this case, the defendant commenced action in the Indian courts alleging shareholder oppression and company mismanagement. The plaintiff sought for an anti-suit injunction in Singapore, on the grounds that the dispute ought to be arbitrated as the dispute fell within the arbitration clause in the Shareholders' Agreement. The defendant opposed and argued that minority oppression is not arbitrable under the governing law of the arbitration agreement, which is the law of India.

The Singapore Court had to deliberate whether, at this pre-award stage, the applicable law for determining subject matter arbitrability was: (a) the law of the arbitration agreement (i.e. Indian law); or (b) the law of the seat of arbitration (i.e. Singapore law).

Decision of the High Court
The Court held that it is the law of the seat that applies to determine the issue of subject matter arbitrability at the pre-award stage, rather than the law of the arbitration agreement. In arriving to its decision, the Court held inter alia the following:

1.              Issue of jurisdiction – The issue of arbitrability, when raised at the pre-award stage before
                 the seat Court, is essentially an issue of whether the arbitral tribunal has jurisdiction to
                 hear the dispute. As it is the law of the seat that limits party autonomy by prescribing what
                 type of disputes are arbitrable, it is the law of the seat that should apply to determine
                 subject matter arbitrability at the pre-award stage. 
2.              Consistency – Arbitrability is relevant at both the initial and terminal stages of an arbitration
                 (i.e. the enforcement of the arbitral award). It is trite that, at the terminal stage, the seat
                 Court applies the law of the seat when considering an application to set aside an award
                 on grounds of non-arbitrability of the dispute. Applying the same law to the issue of
                 arbitrability at the pre-award stage would thus avoid potential anomalies.

Takeaway
Singapore Courts have given broad effect to international arbitration agreements, and giving effect to foreign non-arbitrability rules would undermine Singapore's policy of supporting international commercial arbitration. This novel decision thus underscores the Singapore Court's pro-arbitration stance, giving commercial parties great confidence in choosing Singapore as the seat of any arbitration that they may be involved in.