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Stay of Court Proceedings on Case Management Grounds

In PUBG Corp v Garena International I Pte Ltd and others [2020] SGCA 51, the Singapore Court of Appeal deliberated that a stay of the parties’ ongoing Court proceedings should be granted on “case management” grounds, in favour of arbitration proceedings stemming from a settlement agreement that was entered into between the parties in the midst of the Court Proceedings.   A case management stay would generally be granted when the Court is of the opinion that the determination of the arbitrable issue would supersede or compromise the existing issues under the Court proceedings, even though the issues both proceedings are different. In this case, the issue in the arbitration proceedings was whether the settlement agreement is valid, while the issue in the Court proceedings was in relation to the infringement of intellectual property rights.   The Court held that the resolution of the validity issue of the settlement agreement would have the effect of dispensing and superseding the existing Court proceedings, if the arbitral Tribunal rules that there is a valid settlement agreement. Accordingly, a stay of the Court proceedings was granted on case management grounds.   Parties should be cautious of the effect of the arbitration clause contained in their settlement agreement as it may halt their original Court proceedings if it has the effect of superseding the parties’ issues in the original claims.

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