Car & Cars Pte Ltd v Volkswagen AG and Another

Andrew Ang J:

[1] The case before me is an appeal against the decision of assistant registrar Saqib Alam (“the AR”) in Summons No 261 of 2009 granting the second respondent’s application for an order that all further proceedings in the action brought by the appellant against the second respondent in Suit No 960 of 2008 be stayed in favour of arbitration.

[2] The appellant, Car & Cars Pte Ltd, is a company incorporated in Singapore. Between 1999 and 2004, it was the importer of Volkswagen passenger cars and commercial vehicles pursuant to an agreement made between itself and the first respondent (“the Importer Agreement”).

[3] The first respondent, which this present appeal does not concern, is a company incorporated in Germany, named Volkswagen Aktiengesellschaft. It is in the business of manufacturing Volkswagen vehicles. The first respondent was not represented at the hearings before me.

[4] The second respondent, Volkswagen Group Singapore Pte Ltd, is a company incorporated in Singapore. It is a subsidiary of the first respondent.

[5] The appellant and the first respondent entered into the Importer Agreement in 1999. By that agreement, the appellant was granted the right to import into Singapore, and to distribute, vehicles carrying the Volkswagen marque. These included passenger cars and commercial vehicles. Based on its understanding that the parties would work together on a long-term basis, the appellant made investments to build up the Volkswagen brand in Singapore.

[6] However, the respondents later became desirous of importing the Volkswagen vehicles directly on their own. The appellant was initially reluctant to terminate the Importer Agreement but eventually a Memorandum of Understanding (“MOU”) was entered into between the appellant and the first respondent on 2 November 2004. Clause 2 of the MOU provided that “conditional upon the signing of a definitive agreement … the parties [were] prepared to accept the following in principle:”

the second respondent would “officially take over the importer function and responsibilities for Volkswagen passenger cars” by 1 January 2005 and the Importer Agreement would be terminated by 31 December 2004;

the appellant would “remain as the Importer for After-Sales business (service and parts)” and would be “the single VW dealer with effect from 01/01/2005” and “get a standard VW dealer contract (varied as mutually agreed) with agreed sales quota”; and

in the event that the appellant could not “achieve the sales quota agreed jointly at any point in time” due to its own fault or if the appellant lacked “the resources to cope with market demand”, the respondents would have the right to appoint other dealers.

In addition, cl 3 of the MOU provided:

[7] The appellant’s understanding of the terms of the MOU was that it would give up the Importer Agreement in exchange for sole or exclusive dealership status. However, the latter never came to pass.

[8] The MOU expired in due course. Nevertheless, on 9 December 2004, the appellant and the first respondent entered into a formal written agreement that superseded the terms of the MOU (“the 2004 Agreement”). By cl 2 of the 2004 Agreement, the appellant and the first respondent agreed to terminate the Importer Agreement with regard to only the import of Volkswagen passenger cars. The termination took effect on 31 December 2004 and the second respondent became the Singapore importer for Volkswagen passenger cars. By cl 3 of the same 2004 Agreement, the appellant assumed the status of an authorised dealer of Volkswagen passenger cars for the second respondent from 1 January 2005 onwards. The eventual dealership arrangement between the appellant and the second respondent was made partly in writing and partly by conduct. Meanwhile, the appellant also continued to be the importer of Volkswagen commercial vehicles and products other than passenger cars.

[9] Despite these adjustments, the relationship between the appellant and the respondents was not to last. By way of a letter dated 16 November 2006, the second respondent purported to give the appellant 12 months’ notice of its intention to terminate the dealership agreement. The parties later mutually decided to terminate the dealership before the expiry of the notice period and to terminate, in addition, what was left of the Importer Agreement, ie, with regard to the importing of Volkswagen commercial vehicles and products other than passenger cars. In the terms used by the appellant, there was to be a “clean break” between the appellant and respondents.

[10] To facilitate the parting of ways, the parties entered into four written agreements:

an agreement dated 31 January 2007 made between the appellant and the first respondent in respect of the termination of the Importer Agreement (“the Termination of Importer Agreement”);

an agreement dated 31 January 2007 made between the appellant and the second respondent in respect of the termination of the Dealership Agreement (“the Termination of Dealership Agreement”);

a Sale of Assets and VW Parts Agreement dated 31 January 2007 made between the appellant, Group Exklusiv Pte Ltd (“GEPL”), and the second respondent (“the Sale of Assets and VW Parts Agreement”); and

an assignment of the lease (of certain units at 247 Alexandra Road (“the premises”) where the appellant carried on its business) dated 1 February 2007 made between GEPL and the second respondent (“the Assignment of Lease Agreement”).

[11] For a fuller understanding, it ought to be explained that the appellant is a subsidiary of GEPL, which was party to the Sale of Assets and VW Parts Agreement and the Assignment of Lease Agreement. However, GEPL is not a party to the present dispute. Also, it ought to be mentioned at this point that the appellant regarded these four agreements as a “global settlement”, ie, one single and indivisible arrangement, whereas the second respondent took the view that the four documents “were intended at law to be, standalone [sic] agreements each creating different legal rights and obligations as set out in the respective agreements”. I am inclined to agree with the second respondent for reasons which will be explained below (at [44]).

[12] By the terms of the Termination of Importer Agreement, the appellant was to receive a payment of $1.2m from the first respondent. Similarly, under the Termination of Dealership Agreement, the second respondent would pay the appellant $800,000. In each agreement, it was agreed that by the payment of the named sum, “neither Party shall have any claim against the other Party for any breach, default, contravention or other non-observance of any nature whatsoever of any term …”. Also, both agreements provided that the respective payments were to be made to Volkswagen Financial Services Singapore Pte Ltd (“VFS”) to be set off against an outstanding sum owed by the appellant to that entity. The payment of these sums was timed to take place on 1 February 2007.

[13] Unfortunately, the respondents did not make the requisite payments on the stipulated date. On 2 February 2007, despite not having been paid, the appellant made its own arrangements to settle the sum it owed to VFS. The second respondent later paid its dues on 6 February 2007. However, the first respondent did not give its cheque for the sum of $1.2m to the appellant until 20 March 2007. By that time, the appellant had elected to treat the failure to pay as repudiatory conduct and, as such, the appellant did not present the cheque for payment.

[14] In the main action, namely, Suit No 960 of 2008, the appellant alleges that the failure of the second respondent to pay the $1.2m in a timely fashion constituted a repudiation of not just the Termination of Dealership Agreement but all four agreements. The appellant alleged that its rights against both respondents before the agreements were concluded had been restored as a result of the second respondent’s repudiatory conduct. As such, it could once again make claims against both respondents because the terms of the four agreements were no longer effective. Accordingly, the appellant made a claim, inter alia, for loss and damages arising from the breach of the Importer Agreement and, in the alternative, loss and damages arising from the breach of an agreement to appoint the appellant as the exclusive or sole dealer of Volkswagen vehicles.

[15] Subsequent to the commencement of the suit, the second respondent came before the AR, in Summons No 261 of 2009, seeking a stay of the action brought by the appellant in favour of arbitration. The provision on which the second respondent based its application was contained in cl 6 of the Termination of Dealership Agreement, which reads as follows:

As already mentioned above, the AR granted the application. He took the position that by the wording of cl 6, the rules of the Singapore International Arbitration Centre (“SIAC”) in force at the time of the commencement of the arbitration (ie, SIAC Rules (3rd Ed, 2007) (“SIAC Rules 2007”) applied to the dispute rather than the rules in force at the time of the conclusion of the agreement (ie, the SIAC Domestic Arbitration Rules (2nd Ed, 2002) (“SIAC Domestic Arbitration Rules”) or the SIAC Rules (2nd Ed, 1997) (“SIAC Rules 1997”), both of which have since been repealed).

[16] Rule 32 of the SIAC Rules 2007 provides:

Accordingly, the AR found that that the International Arbitration Act (Cap 143A, 2002 Rev Ed) (“IAA”) applied and, by force of that statute, the grant of a stay was mandatory. In addition, the AR found that even if the Arbitration Act (Cap 10, 2002 Rev Ed) (“AA”) was the applicable statute, a stay ought not to be granted. He found that there was no good reason for him to exercise his discretion to deny the application for a stay because there was no real risk of multiplicity of proceedings and it would be an injustice if the appellant was released from its obligation to comply with the valid arbitration agreement it entered into with the second respondent.

[17] From the submissions of counsel before me, it emerged that the crux of the matter hinged on two related issues:

whether the disputed arbitration clause was governed by the AA or the IAA; and

assuming the clause was governed by the AA, whether judicial discretion should be exercised to deny the application for a stay of proceedings.

I will deal with each issue in turn.

[18] As already mentioned above (at [17]), the starting point of the inquiry is whether the disputed arbitration clause is governed by the AA or the IAA. The significance of this issue lies in the difference in the extent of judicial intervention which is permitted when the court is faced with an application to stay court proceedings in favour of arbitration.

[19] Section 6 of the IAA provides:

In other words, if the agreement is not null and void, inoperative or incapable of being performed, and if the proceedings are in respect of a matter which is the subject of the agreement, the grant of a stay will be mandatory.

[20] There has been no suggestion that the agreement is null and void, inoperative or incapable of being performed. Therefore, since the subject of the main dispute (ie, the non-payment of the $1.2m and the legal effect thereof) is clearly in respect of a matter falling within the ambit of the Termination of Dealership Agreement, if I find that the IAA applies, I will be obliged to grant the stay of proceedings.

[21] By contrast, s 6 of the AA provides:

In other words, the court has the discretion to grant or refuse a stay of proceedings within the ambit of s 6(2) of the AA should that regime apply. If I find that the AA applies, then there is room for me to exercise my discretion whether to refuse or grant the stay.

[22] The parties disputed whether the words “for the time being in force” in cl 6 of the Termination of Dealership Agreement referred to (a) the rules of the SIAC at the time of the conclusion of the contract (“Scenario 1”), or (b) to the rules of the SIAC at the time of the commencement of the arbitration (“Scenario 2”).

[23] If Scenario 1 is correct, then a further issue that would need to be answered is whether the parties have chosen the SIAC Domestic Arbitration Rules or the SIAC Rules 1997, both of which were in force at the time of the conclusion of the agreement. The use of the SIAC Domestic Arbitration Rules would lead to the AA being the generally applicable statute, whereas applying the SIAC Rules 1997 would lead to the IAA being the operative law.

[24] If Scenario 2 is correct, then the SIAC Rules 2007, which replaced both the SIAC Domestic Arbitration Rules and the SIAC Rules 1997, would apply. Rule 32 of the SIAC Rules 2007 provides:

Since cl 6 of the Termination of Dealership Agreement clearly chooses Singapore as the seat of arbitration, if Scenario 2 is correct, the IAA will apply to the dispute and I would be obliged to grant the stay.

[25] After considering the submissions made by counsel, I am persuaded that Scenario 2 is correct, ie, the rules that are applicable are those in force at the time of the commencement of the arbitration and the SIAC Rules 2007 apply. As a matter of construction, it may be fairly argued that the employment of general phraseology referring to rules “for the time being in force” points to rules that presently cannot be precisely identified. Were the intention to refer to rules existing at the date of the contract, there would not have been need for the general words. The particular set of rules could easily have been identified by name. A fortiori, in the present case where there were two sets of rules in force at the date of the contract, a choice between the two would have had to be made if the rules applicable at the date of the contract were applicable.

[26] In their recent decision in Navigator Investment Services Ltd v Acclaim Insurance Brokers Pte Ltd [2009] SGCA 45 (“Navigator Investment Services”), the Court of Appeal were of the view that (at [34]):

The dictum bolsters my view that the parties meant to refer to the rules in force at the time of the commencement of the arbitration, ie, the SIAC Rules 2007. Accordingly, pursuant to r 32, the IAA applies so that I am obliged, as explained earlier, to grant the stay.

[27] At least two English cases also support the interpretation that “rules for the time being in force” do not prima facie refer to the rules applicable at the time when the contract was made.

[28] In the first case of National Coal Board v Galley [1958] 1 WLR 16, the defendant entered into a written contract of service in 1949 with the National Coal Board. That document provided, inter alia, that his wages should be (at 19):

In 1952, the National Association of Colliery Overmen and Deputies and Shotfirers (“NACODS”) negotiated an agreement. Dispute arose between the defendant and his employers, pursuant to which an action was brought. One of the issues before the court was whether the defendant was bound by the NACODS agreement. Notwithstanding the fact that the agreement was negotiated in 1952, three years after the contract, the court held by the defendant’s personal contract, his wages were to be regulated by national agreements for the time being in force, and since the NACODS agreement was a national agreement, the defendant was bound by it (at 23). Pearce LJ, reading the judgment of the court, clearly interpreted the phrase “agreement for the time being in force” to mean the agreement in force at the time the dispute arose and not at the time of the conclusion of the contract.

[29] In the second case, Mayor, &c., of Westminster v The Army and Navy Auxiliary Co-Operative Supply, Limited [1902] 2 KB 125, the English court encountered a similar problem. Section 45 of the Valuation (Metropolis) Act 1869, provided (at 126, fn 1):

The issue at hand, which was whether the respondents were liable to pay the difference between the rateable sum of a valuation made under an old valuation list and a new list despite not being given notice of the change, turned on the question of how the phrase “the valuation list for the time being in force” might be interpreted. Channell J held (at 133):

In other words, the valid valuation list was the one that was in force at the time of the dispute arising, just as the NACODS agreement in National Coal Board v Galley ([28] supra) was binding as it was validly made and in force at the time that the dispute occurred.

[30] I am also fortified in my decision (that the applicable rules are those in force at the time of the commencement of the dispute) by the case of Black & Veatch Singapore Pte Ltd v Jurong Engineering Ltd [2004] 4 SLR 19 (“Black & Veatch”). At [19], the Court of Appeal approved of the position taken in Bunge SA v Kruse [1979] 1 Lloyd’s Rep 279 at 286 that there is:

The rationale for making such an inference is explained succinctly in the case of Peter Cremer v Granaria BV [1981] 2 Lloyd’s Rep 583, which was also cited by the Court of Appeal at [20]. At 592–593, Robert Goff J said:

On the basis that there was no suggestion by the appellant that the SIAC Rules contained mainly substantive provisions, the Court of Appeal held that the rules in force at the time of commencement of the arbitration were applicable. It ought to be noted that, in that case, one of the grounds on which the appellant sought to avoid the inference was by arguing that there were substantive differences in the restriction of appeals under the IAA and the AA. However, its submissions were rejected on the basis that the disputed arbitration clause did not refer directly to primary legislation but to the rules promulgated by the SIAC.

[31] The facts of the present case are similar to those of Black & Veatch. The appellant in the present case argues that there are substantive differences between the IAA and the AA regime and, but for the repeal of the SIAC Domestic Arbitration Rules, the parties would have had their arbitration governed by the AA. Its contention is that this is a substantive change which parties could not have intended. However, the disputed arbitration clause did not refer directly to either the IAA or the AA but to the rules of the SIAC, as was the case in Black & Veatch. The rules of the SIAC are clearly procedural in nature, even if they can eventually have substantive impact. They deal with matters such as the appointment of arbitrators, the conduct of proceedings and admissibility of evidence by experts and other witnesses. These are all procedural rather than substantive matters. As such, following the decision of Black & Veatch, the rules at the time of the commencement of the arbitration, ie, the SIAC Rules 2007 ought to apply. By virtue of r 32 of the SIAC Rules 2007, the statutory regime under the IAA applies.

[32] In Jurong Engineering Ltd v Black & Veatch Singapore Pte Ltd [2004] 1 SLR 333, the High Court laid down the rule that where parties agree to adopt SIAC’s rules generally, the SIAC Domestic Arbitration Rules would apply to domestic cases and the SIAC Rules 1997 would apply to international cases. In reliance on this authority, the appellant argues that since cl 6, which is the arbitration clause, is worded generally and the subject matter of the present dispute is domestic, the SIAC Domestic Arbitration Rules ought to apply and, consequently, the statutory regime under the AA applies.

[33] The appellant also argues for the same result based on r 1.1 (b) and (c) of the SIAC Domestic Arbitration Rules. I set out rule 1 below:

According to the appellant, the SIAC Domestic Arbitration Rules are applicable, and the AA applies because the present matter falls within the scope of sub-paragraphs 1.1(b) and (c).

[34] Both of the above points, however, are premised on the assumption that Scenario 1 is correct, ie, it is the rules at the time of the conclusion of the agreement that are relevant and a choice needs to be made between the SIAC Domestic Arbitration Rules and the SIAC Rules 1997. However, in the light of my finding that only the rules at the time of the commencement of the arbitration are applicable, ie, the SIAC Rules 2007 (at [25] above), I am unable to accept either point. Schedule 1, Article 1, of the SIAC Rules 2007 makes clear that the SIAC Domestic Arbitration Rules have since been repealed:

[35] The SIAC Rules 2007 does make special provision in the form of Schedule 1 for instances where the SIAC Domestic Arbitration Rules have been expressly referred to:

However, since the parties have not “expressly referred to arbitration under the SIAC Domestic Arbitration Rules” in cl 6 or anywhere else in the Termination of Dealership Agreement, Schedule 1 cannot aid the appellant and does not change my holding that the IAA applies.

[36] Counsel for the appellant also reasoned why the AA ought to apply based on the interaction between s 3 of the AA and s 5 of the IAA. For convenience, I set out the two provisions below. Section 3 of the AA reads:

Section 5 the IAA reads:

For a fuller understanding of s 5 of the IAA, I also set out Article 1(3) of the UNCITRAL Model Law on International Commercial Arbitration:

[37] Reading s 5 of the IAA with s 3 of the AA, it may be concluded that the AA will apply where the place of the arbitration, as in the present case, is Singapore, and:

all the parties to the arbitration agreement have their place of business in Singapore;

the place of arbitration is the State in which the parties have their places of business;

the place where a substantial part of the obligations of the commercial relationship is the State in which the parties have their places of business;

the place with which the subject-matter of the dispute is most closely connected is the State in which the parties have their places of business;

the parties have not expressly agreed that the subject-matter of the arbitration agreement relates to more than one country; and

the parties have not agreed in writing that Part II of the IAA, or the UNCITRAL Model Law on International Commercial Arbitration will apply.

[38] Counsel for the appellant essentially made the argument that all these factors have been met. I agree with counsel for the appellant with regard to the first five factors. First, the appellant and the second respondent have their respective places of business in Singapore. Second, the place of arbitration, as chosen in cl 6, is also Singapore. Third, the obligations under the Termination of Dealership Agreement were all to be performed in Singapore. Fourth, the subject-matter of the dispute is also most closely connected with Singapore for various reasons, which include the fact that the Termination of Dealership Agreement was concluded in Singapore, the parties are Singaporean entities, the seat of arbitration is in Singapore, and the governing law is Singapore. Fifth, there was no evidence before me that the parties expressly agreed that the subject-matter of the arbitration agreement relates to more than one country.

[39] However, while there was no suggestion made that the parties have agreed in writing to apply the UNCITRAL Model Law on International Commercial Arbitration, counsel for the second respondent argued strenuously that by the wording of cl 6 of the Termination of Dealership Agreement, the parties agreed in writing that Part II of the IAA will apply. The crux of the issue is therefore whether by the wording of cl 6 of the Termination of Dealership Agreement the parties agreed in writing that Part II of the IAA will apply.

[40] The Court of Appeal was confronted with a similar problem in Navigator Investment Services ([26] supra). In that case, the arbitration clause read as follows (see [28]):

The issue before the Court of Appeal was whether the parties had agreed that Part II of the IAA would apply. There was no dispute between the parties in that case that the phrase “for the time being in force” referred to the rules in force at the time of the commencement of the arbitration, ie, the SIAC Rules 2007 (see [34]). Accordingly, the appellant argued that the parties, by adopting the SIAC Rules 2007 which provided that the IAA was applicable (pursuant to Rule 32), had thereby opted for the IAA to apply (see [29]). The respondent, on the other hand, argued that the IAA was not applicable because there was no agreement that the IAA or the Model Law was to apply, and the requisite factors set out in s 5(2) of the IAA were also not satisfied (see [30]). The Court of Appeal held that the IAA was the applicable legislation.

[41] The decision of the Court of Appeal was based on the holding that s 5(1) of the IAA contemplates not only agreements which expressly state that the IAA is to apply (see [35]), but extends to agreements adopting institutional rules which in turn expressly stipulate that the IAA shall apply (see also NCC International AB v Alliance Concrete Singapore Pte Ltd [2008] 2 SLR 565 at [52]). Therefore, since the SIAC Rules 2007 were “deemed to be incorporated by reference” into the agreement, r 32 operated to make the IAA the governing law.

[42] The facts of the case before me bear some similarity to those of Navigator Investment Services ([26] supra). Like the arbitration clause in that case, cl 6 stipulates that disputes under the Termination of Dealership Agreement will be resolved in accordance with the rules of the SIAC “for the time being in force”, ie, SIAC Rules 2007. However, there are two distinguishing features that I ought to point out. First, whereas there is a dispute as to the applicable SIAC rules in the present case, in Navigator Investment Services, there was agreement that “the Arbitration Rules of the [SIAC] for the time being in force” referred to the SIAC Rules 2007. Second, the arbitration clause in Navigator Investment Services expressly provided that “the Arbitration Rules shall be deemed to be incorporated by reference” into that agreement, whereas cl 6 makes no similar mention. Neither of them prevents me from following the Court of Appeal’s holding that by adopting the SIAC Rules 2007 the parties agreed in writing that Part II of the IAA should apply. This is because although there was contention between the parties as to the applicable rules, I have decided, for reasons set out in [22] to [31] above, that by adopting the rules “for the time being in force” the parties in this case had chosen the rules in force at the time of the commencement of the arbitration, viz, the SIAC Rules 2007. As for the second distinguishing feature, it makes little difference, once the SIAC Rules 2007 are found to apply, whether one goes on to say that they are deemed incorporated within the agreement.

[43] It was also submitted before me, on behalf of the appellant, that the express choice to apply the AA in the Sale of Assets and VW Parts Agreement pointed to the intent of the parties to apply the AA to the Termination of Dealership Agreement. This argument was made on the basis that the two agreements were part of the same “global settlement” that comprised four agreements in all.

[44] The appellant’s arguments favouring a “global settlement” do have some intuitive appeal. However, the fact remains, that all four agreements had different dispute resolution clauses. As the learned AR pointed out, the parties chose to enter into that global settlement in the form of separate contracts, each with separate and distinct procedures for dispute resolution (Cars & Cars Pte Ltd v Volkswagen AG [2009] SGHC at 77 at [75]). For that reason, the dispute resolution clause in the Sale of Assets and VW Parts Agreement is of no assistance to the appellant. If at all, it only serves to highlight that the AA had not been chosen to apply in the Termination of Dealership Agreement.

[45] Having already found that the SIAC Rules 2007 apply and that, pursuant to r 32 thereof, the IAA applies, the learned AR was right to grant the stay. I would add that even if the AA applied, so that it was within his discretion to grant or refuse the stay, he had not incorrectly exercised that discretion.

[46] Under s 6 of the AA, the court has the discretion to grant a stay if it is satisfied that (a) there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement; and (b) the applicant remains ready to do all things necessary to the proper conduct of the arbitration.

[47] The appellant’s main argument against granting a stay of proceedings is that there would be a multiplicity of proceedings and a possibility that the court and the arbitration tribunal would reach inconsistent findings. The appellant’s argument was premised on the basis that the appellant and the respondents had entered into a “global settlement”, and that the first respondent’s failure to pay the $1.2m was a repudiation of all four agreements under the “global settlement” such that the appellant’s prior rights against both respondents before entering into the settlement were restored. The appellant’s position was that following the default of payment it could initiate claims against both respondents for breach of those prior rights.

[48] However, while multiplicity of proceedings is an important factor for refusing a stay of proceedings, it is not a wholly decisive ground. This principle has been reiterated in Mustill and Boyd, The Law and Practice of Commercial Arbitration in England (Butterworths, 2nd Ed, 1989) at 477–478:

[49] The question then is, what grounds could justify granting or refusing a stay where there is risk of multiplicity of proceedings. I would venture to suggest that one such ground is that parties should normally be held to their contractual agreements (see also Taunton-Collins v Cromie [1964] 1 WLR 633 at 637). A risk of multiplicity of proceedings alone will not automatically mean that a stay must be granted or denied, especially when parties have by contractual agreement deliberately arranged their dispute resolution procedures in such a fashion that almost inevitably such risks would materialise. Another ground on which a stay could be granted or denied despite the presence of risk of multiplicity of proceedings is when the needs of justice outweigh the risk of multiplicity. Therefore, in Yee Hong Pte Ltd v Tan Chye Hee Andrew [2005] 4 SLR 398 at [43], the learned judge stayed proceedings in favour of arbitration despite the risk of multiplicity of proceedings because the judge found that “justice would be best served if the three parties proceeded to determine their respective claims, defences and counterclaims if any”.

[50] In the present instance, even if the parties had entered into a “global settlement”, they had expressly chosen to enter into four separate agreements with significantly different dispute resolution clauses, each worded differently. It can be said that the parties could have foreseen that there would be a risk of multiplicity and inconsistent decisions should disputes arise out of these agreements. Therefore, as in the case of Bulk Oil (Zug) AG v Trans-Asiatic Oil Ltd SA [1973] 1 Lloyd’s Rep 129 (where the court found that the parties had expressly arranged their affairs in such a fashion despite such risk) the appellant and the second respondent ought to be held to their respective contractual bargains and should proceed to arbitration under the SIAC.

[51] I am bolstered in my decision by the Malaysian High Court case of Sunway Damansara Sdn Bhd v Malaysia National Insurance Bhd [2008] 3 MLJ 872 (“Sunway Damansara”). In that case, a stay of proceedings was granted in favour of arbitration because the court found that any risk of multiplicity had been brought about by the plaintiff’s own actions. The plaintiff was pursuing claims against two parties on two separate agreements in one action and, therefore, the perceived multiplicity was induced by the way the plaintiff had initiated its case.

[52] The present case is similar to Sunway Damansara in that the risk of multiplicity can be said to have been induced by the way the appellant had chosen to bring its claims. I agree with the analysis of the learned AR at [44]–[47] ([44] supra):

[53] In the light of the above considerations, it would be unjust if the appellant was released from the arbitration agreement that it freely entered into with the second respondent.