In the case of Cheung Teck Cheong Richard and others v LVND Investments Pte Ltd  SGHC 28, the plaintiffs purchased the shop units developed by the defendant and claimed that the defendant had made fraudulent representations or negligent misrepresentations to the plaintiffs. The sale and purchase agreements between the parties contained the following clause:
‘20A. Mediation 20A.1 The Vendor and Purchase agree that before they refer any dispute or difference relating to this Agreement to arbitration or court proceedings, they shall consider resolving the dispute or difference through mediation at the Singapore Mediation Centre in accordance with its prevailing prescribed forms, rules and procedures.
20A.2 For the avoidance of doubt, this clause shall not amount to a legal obligation on the part of either the Vendor or Purchaser to attempt mediation as a means of resolving their dispute or difference.’
Prior to the commencement of the court proceedings, the plaintiffs had commenced two earlier arbitration proceedings, both of which were terminated. Subsequently, it was argued in the court proceedings that there was no valid arbitration agreement. In any event, any purported arbitration agreement was vitiated by mistake.
The SGHC found that the parties’ course of conduct gave rise to a valid arbitration agreement despite the finding that Clause 20A.1 did not show any intention by the parties to be bound to arbitrate, since it merely required parties to ‘consider mediation’ before referring their dispute ‘to arbitration or court proceedings’. Nevertheless, the court held that the parties had agreed to submit their disputes to Singapore-seated arbitration based on the following:
This judgment highlights the importance of a properly drafted multi-tiered dispute resolution clause to avoid unnecessary procedural litigation. It also emphasises that the threshold to refuse a stay under the Arbitration Act is a high one and will only be exercised sparingly.