Far Ocean Sea Products Pte Ltd v United Overseas Insurance Ltd [2026] SGHC 182

Over the past few decades, Singapore has acquired the reputation of a jurisdiction with a “pro-arbitration” stance: see, eg, Michael Hwang & Yin Wai Chan, “Case Law of the Supreme Court of Singapore in the Field of Arbitration” (2019) 1(2) Belgian Review of Arbitration 629 at 629–631. This reputation rests on, among other things, the policy of minimal curial intervention, the principle that when parties choose to arbitrate their disputes arbitration clauses should be interpreted as far as possible to give effect to that choice and the rebuttable presumption that commercial parties intend to have all the disputes between them decided in the same forum. Nonetheless, parties sometimes agree to refer only parts of their disputes to arbitration, splitting up modes of resolution for sound reasons. In the insurance context, one may find clauses that refer disputes to an arbitrator only if liability has been agreed. Coupled with contractual time bars that are also not uncommon in the insurance context, such clauses can be tricky for the insured, including because a lay perception that the insurance company has more or less agreed to pay up on a claim may not align with a strict interpretation of what is required for a binding admission of liability.

The application before me concerns the interpretation of one such arbitration agreement. It is an application to extend time beyond a contractual time bar under s 10(1) of the Arbitration Act 2001 (2020 Rev Ed) (“AA”) for Far Ocean Sea Products Pte Ltd (“Applicant”) to commence arbitration proceedings against United Overseas Insurance Limited (“Respondent”). Parties agreed to refer to arbitration only differences concerning the amount to be paid under the insurance policy “liability being otherwise admitted”. Accordingly, central to this application is the threshold question of whether parties’ dispute was indeed one where liability had been “otherwise admitted” within the meaning of the arbitration agreement, such that reference to arbitration had become available. If not, then there would be no operative arbitration agreement in respect of which time to commence arbitration could be extended under the relevant statutory power. In urging me to adopt an interpretation of this phrase that would permit disputes to go to arbitration so long as some liability had been admitted, the Applicant prayed in aid the so-called pro-arbitration stance of our jurisdiction.

Before going on to the issues, I briefly outline the facts.

Facts

The parties

The Applicant is a frozen seafood products supplier, and the Respondent is an insurance provider. Since March 2011, the Applicant had leased and carried out its operations on an industrial property (“Premises”) comprising several processing rooms and cold rooms designed to store its core inventory of frozen seafood products (“Cold Rooms”).

On 31 March 2024, parties renewed a fire insurance policy (“Policy”), under which the Respondent agreed to insure the Applicant’s Premises for a year, up to 30 March 2025 for a sum of S$12,580,000. Embedded within the Policy were two key clauses:

(a) first, a time bar clause which provided that:

(b) second, an arbitration clause which provided that:

Background to the dispute

Shortly after the Policy was renewed, on 28 June 2024, a fire caused by an electrical fault caused severe damage to the Premises. Several areas within the Premises suffered heat damage or water damage from fire-fighting operations. In particular, such damage was caused to the building’s electrical systems which resulted in power failures to the Applicant’s Cold Rooms. Neither party disputes that the fire gravely disrupted the Applicant’s business operations – including millions of dollars’ worth of losses to its inventory, which had a “knock-on impact” on the Applicant’s other businesses downstream.

Parties’ negotiations on the Applicant’s insurance claims

I note as an aside that in their submissions, parties vigorously dispute when the Applicant was first notified of the contractual time bar or of the Respondent’s intention to rely on it. Parties’ submissions examined these negotiations over the course of those many months. I do not consider it necessary to make any findings on when the Applicant received such notice nor reproduce those negotiations at length. This is because I accept the Respondent’s position that the Applicant, having signed the Policy and been advised by insurance professionals throughout the negotiations, is precluded from disclaiming knowledge of its provisions. Moreover, the Applicant did not contend for the purpose of this application that the Respondent was estopped from relying on the contractual time bar. Indeed, applying for an extension of time presumed that there was an operative time bar which needed to be lifted. Nonetheless, the conduct of parties would be relevant to the exercise of the power to extend time, if the threshold question is crossed.

Without trawling through the details of parties’ correspondence, it was at least clear by May 2025 that while the Respondent disputed several of the Applicant’s reinstatement claims, it was willing to allow the Applicant to commence some of its reinstatement works. In emails sent by the Respondent’s representative to the Applicant on 30 April and 5 May 2025, the Respondent agreed that the Applicant may proceed to commence reinstatement works for only two of the Applicant’s seven claim items. Moreover, the Respondent particularly disputed the Applicant’s claim items pertaining to reinstating its Cold Rooms and other temporary works, stating that “[b]ased on the policy wording and the sum insured”, these items were “not covered under the policy”. As regards the rest of the Applicant’s reinstatement claims items, the Respondent maintained that the scope of its coverage of these claims would be subject to the Respondent’s approval pending the Applicant’s commencement and completion of its reinstatement works. From that point onwards, the Respondent maintained its position as detailed above, including at a physical meeting between parties’ representatives on 23 June 2025. The time bar then came into effect just five days later on 28 June 2025.

Nonetheless, parties continued in discussions for months after. This included discussing whether the Applicant’s claims pertaining to its Cold Rooms were covered under the Policy. The Applicant appointed its first set of solicitors to negotiate its reinstatement claims and the Cold Rooms’ inclusion in September 2025, but no progress was made. During this period up until early December 2025, the Respondent’s representatives continued negotiations, only saying that the Respondent “require[d] more time to assess” the Applicant’s reinstatement claims (pending the Applicant’s commencement and completion of all its reinstatement works) and claims for the Cold Room.

Ultimately, it was only in mid-December 2025, nearly five months after the time bar had come into effect, that the Respondent formally invoked the time bar clause under the Policy to disclaim its liability in its entirety. Shortly thereafter, the Applicant appointed new solicitors. It issued a notice of arbitration against the Respondent in January 2026 and made this application to extend the time for it to pursue its claims in arbitration, in view of the time bar.

The Applicant’s sale of the Premises

The Applicant, on the other hand, informed the Respondent that it had sold the Premises on a forced sale basis after the fire had severely disrupted its business operations. The Applicant had suffered significant financial losses following the damage to its inventory, but it had not received any insurance payout necessary for it to undertake the reinstatement works. The consequence was that the Applicant was ultimately put into receivership. This resulted in the forced sale of the Premises for S$8million just below its valuation on a forced sale basis of S$8.4million, and S$4 million below its free market valuation of S$12million. The Applicant contends that loss of value is a viable alternative basis for its insurance claim.

The parties’ cases

The Applicant’s application rests on s 10(1) of the AA which empowers the court to extend time for a party to pursue a claim in arbitration beyond a contractual time bar when “a dispute to which the [arbitration] agreement applies has arisen” if the court considers that “undue hardship would otherwise be caused” to parties.

It is common ground between parties that the threshold question of whether the court has the power to extend time for arbitration under s 10(1) of the AA turns on whether the dispute the Applicant intends to bring to arbitration falls within the scope of parties’ arbitration agreement. What parties contest is whether the arbitration agreement has come into effect by virtue of liability being otherwise admitted, specifically:

(a) whether this requires that liability has been fully admitted by the insurer, such that the only differences left to be arbitrated are questions of mere quantum; or

(b) whether it would suffice that some liability has been admitted by the insurer (for example, that the fire was an insured event within the policy) even though whether the insured loss extended to all items claimed (for example, the Cold Rooms) had not been admitted.

In answering the broad issue above, parties advanced their submissions as follows.

The Applicant’s case

In the Applicant’s submission, the court should find that so long as some liability has been admitted by the insurer, parties may bring their dispute within the scope of the arbitration clause.

First, while the court has yet to set out the applicable standard of review when determining whether a dispute falls within the scope of an arbitration agreement under s 10 of the AA, the court should adopt a prima facie standard of review – consistent with how the court determines all jurisdictional issues in arbitration, be it the existence or applicability of an arbitration clause: Beltran, Julian Moreno v Terraform Labs Pte Ltd [2024] 4 SLR 674 (“Terraform Labs”) at [122]. The Applicant relies on [5] of the Court of Appeal’s decision in Sim Chay Koon v NTUC Income Insurance Co-operative Ltd [2016] 2 SLR 871 (“Sim Chay Koon”) to submit that a prima facie standard of review in determining whether to stay court proceedings in favour of arbitration under s 6 of the AA. An arbitration clause must be “clearly invalid or inapplicable” to fall short of this prima facie standard: Tomolugen Holdings Ltd v Silica Investors Ltd [2016] 1 SLR 373 (“Tomolugen”) at [68]. In so doing, the court should undertake a “restrained review of the facts and circumstances”, and on these facts, refrain from applying an exacting standard to determining whether liability had been admitted by the Respondent in order for the Applicant to enforce its right to arbitrate: Sim Chay Koon at [5].

Second, the Applicant acknowledges that the English courts have held that a similar arbitration clause which contained the phrase “liability being otherwise admitted” applied only to claims of “mere quantum” where liability had been fully admitted. Nevertheless, the Applicant seeks to distinguish those cases, and further persuade me to instead rely on case law from the United States (“US”) and India which have held the contrary in relation to similarly worded arbitration clauses in insurance policies. The Applicant argues that these decisions rightly show a “pro-arbitration stance”, as well as a general reluctance to require parties to litigate substantially connected and intertwined claims before separate forums. Consequently, so long as the insurer has admitted liability to some portions of the same claim, that is sufficient because any remaining disagreements still go towards the question of how much the insurers must pay, not whether the insurers need to pay anything at all.

Third, and flowing from the above, it was clear enough from parties’ correspondence that the Respondent had admitted liability for at least two of the seven reinstatement claim items. The Respondent had never disclaimed liability entirely. Rather, parties had proceeded on the basis that the Respondent was liable for at least some of the Applicant’s claims. Parties’ disagreement thus centred solely on how much the Respondent would be liable for. Further, even if the possibility of the Applicant obtaining its reinstatement claims in the arbitration is now hampered by its sale of the Premises, it remains open for the Applicant to mount an alternative claim for loss of value at the arbitration: Sartex Quilts & Textiles Ltd v Endurance Corporate Capital Ltd [2020] 2 All ER (Comm) 1050 at [69].

The Respondent’s case

In the Respondent’s submission, the court should instead find that parties’ dispute could only be referred to arbitration once liability had been fully admitted by the insurer.

With respect to the applicable standard of review for determining whether a dispute falls within the scope of an arbitration clause, it is common ground between parties that this is a novel question in the context of an application under s 10(1) of the AA. The Respondent argues for a “full merits” standard of review. The standard of review the court undertakes in determining stay applications under s 6 of the AA is not immediately transposable to determining applications under s 10(1) of the AA. An application under s 10(1) of the AA seeks the court’s indulgence to extend time for an arbitration to be brought. Whether parties’ dispute falls within the scope of parties’ arbitration agreement is a necessary pre-requisite for the exercise of discretion to extend time and should therefore be fully determined on its merits.

Concerning the scope of the arbitration clause, the Respondent relies on decisions of the English courts. These conclude that where parties have agreed to refer disputes to arbitration only once liability has been otherwise admitted by the insurer, the arbitration agreement only covers disputes on quantum. Relying on the decision in Bath Racecourse Company Ltd v Liberty Mutual Insurance Europe Se [2025] EWHC 1870 (Comm) (“Bath Racecourse”), the Respondent submits that such agreements to arbitrate come into effect only if the “precondition” – that the insurer has admitted full liability to the claims and left only issues of quantum to be decided – has been fulfilled. In the Respondent’s submission, such a precondition to arbitration is not satisfied so long as the claim the insured intends to bring to arbitration engages “a point of law or construction rather than a mere dispute on quantum”. Nor would it be satisfied even where an insurer has admitted that an event is prima facie covered, if the amount payable is still subject to other conditions which similarly turn on matters of construction. Barring a full admission of liability and fulfilment of this precondition, there would exist “no operative agreement to arbitrate” between the parties and it would be for the Applicant to commence court proceedings to litigate parties’ dispute on liability.

In addition to its view that a valid admission of liability must be with respect to all the Applicant’s claims to come within the scope of parties’ arbitration agreement, the Respondent submits that admissions of liability must also be clear and unequivocal (citing the Court of Appeal’s decision in Tjong Very Sumito v Antig Investments Pte Ltd [2009] 4 SLR(R) 732 at [61]–[62]). It was insufficient for the Applicant to rely purely on the fact that the Respondent had never expressly denied liability for all its claims, to submit that liability had been impliedly admitted.

On the facts, the Respondent submits that parties’ correspondence reveals that it had never expressly accepted liability for any of the Applicant’s reinstatement claims, let alone unequivocally admitted liability for all the claims brought against it.

(a) As regards the two reinstatement claims that the Applicant submits were admitted, it was clear from the emails sent by the Respondent’s loss adjustor that though the Respondent had allowed the Applicant to commence works on, parties were aware that the Respondent’s liability for those claims was “still subject to [the Respondent’s] approval”, pending completion of those reinstatement works.

(b) As regards the few emails the Applicant characterised as admissions of liability by the Respondent’s loss adjustor, the Respondent submits that, in any event, the loss adjustor had no authority to admit liability on behalf of the Respondent.

(c) Even if the court were to accept that the Respondent via its loss adjustor had validly admitted to some liability, these were at best, only partial admissions of liability. It was consistent throughout parties’ correspondence that the Respondent had expressly denied liability in respect of the Applicant’s remaining reinstatement claims, particularly those pertaining to the Cold Rooms as those claims fell outside the scope of coverage in the Policy.

Accordingly, to the extent that any dispute the Applicant intends to bring to arbitration now would necessarily engage questions such as (a) whether the Cold Rooms were covered under the Policy; and (b) given that the Applicant has since sold the Premises, whether the Applicant is entitled to substitute its reinstatement claims by a loss of value claim at the arbitration, any arbitral tribunal constituted would be tasked with interpreting the Policy and deciding questions of law. This, in the Respondent’s submission, would clearly bring this dispute well beyond mere questions of quantum and place it far outside the scope of parties’ arbitration agreement.

Issues to be determined

I will proceed to consider the following issues in order to decide whether the arbitration agreement has become operative, such that I should then proceed to consider whether this is an appropriate case to extend time:

(a) the applicable standard of review for determining whether a dispute falls within an arbitration agreement under s 10(1) of the AA;

(b) the proper interpretation of this arbitration agreement in particular the condition for its coming into operation, namely “liability being otherwise admitted”; and

(c) whether, on that proper interpretation, liability has been admitted.

Issue 1: The applicable standard of review under s 10(1) of the AA

In my judgment, a party seeking to rely on s 10(1) of the AA to extend time to commence arbitration proceedings and so relax the contractual time bar must satisfy the court on a “full merits” basis that the arbitration it intends to commence falls within the arbitration agreement.

The Applicant frames its submission that only a prima facie standard of review ought to suffice under s 10(1) of the AA primarily as a matter of consistency. The Applicant submits, and the Respondent does not deny, that while the court has determined that a prima facie standard of review applies in respect of other applications brought under the AA, the court has yet to set out an applicable standard of review specific to s 10(1). In the only other reported decision applying s 10(1) of the AA, Lee Hui Chin v Chubb Insurance Singapore Ltd [2024] SGHC 69 (“Chubb”), parties did not dispute that the underlying dispute fell within the scope of the arbitration clause such that the court had the power extend time. The question, instead, was solely whether that power should be exercised in light of whether any undue hardship would be otherwise caused to the applicant: see Chubb at [21]–[27].

In the absence of a settled position on how the court should determine the question, the Applicant invites the court to transpose wholesale and “adopt the settled principles applicable to the stay of court proceedings in relation to disputes that are subject to arbitration”. To the extent that the court has consistently held that only a prima facie standard of review applies to determining whether to stay court proceedings in favour of enforcing an arbitration clause, the same standard should necessarily apply to determining whether time should be extended for a party to enforce an arbitration clause.

The Applicant further submits that adopting the prima facie standard of review for applications under s 10(1) of the AA would not only be consistent with the approach taken under s 6 of the AA but would also be principled. In the Applicant’s view, the court has “every reason” to adopt the same prima facie standard of review across applications under ss 6 and 10(1) of the AA as the “underlying rationale” supporting the lower standard in stay applications in s 6 “applies with equal force” to extension of time applications under s 10(1).

The Applicant correctly identifies that underlying the court’s earlier decisions to adopt a prima facie standard of review for applications under s 6 was a need to protect the policy of minimal curial intervention and give effect to the doctrine of kompetenz-kompetenz: Terraform Labs at [121]–[123] citing Tomolugen at [63]–[68]. Where I disagree with the Applicant, however, is on whether those principles apply similarly to an application to extend time under s 10(1) of the AA.

When the court considers whether to stay court proceedings in favour of an arbitration in a s 6 application, the question concerns the regulation of proceedings before the court. Whether and on what terms proceedings are to be stayed is a matter for the court, and there is no difficulty of principle in the court giving effect to party autonomy and the doctrine of kompetenz-kompetenz by adopting only a prima facie standard of review before exercising the power to stay proceedings before it.

But s 10(1) of the AA is different. It is a statutory power conferred on the court to extend time for the commencement of an arbitration in respect of a dispute to which the arbitration agreement applies. The court may only exercise the statutory power when the dispute is one to which the arbitration agreement applies. Thus, the court must first be satisfied that the dispute is indeed one to which the arbitration agreement applies. It is a condition to the exercise of a positive power (here, to extend time). This coheres with how the English courts approach similar extension of time applications under s 12 of the Arbitration Act 1996 (c 23) (UK). In Grimaldi Compagnia Di Navigazione SpA v Sekihyo Lines Ltd [1999] 1 WLR 708 (“Grimaldi”), Mance J (as he then was), sitting in the High Court of England and Wales, recognised two points. The first is that an extension of time provision set out in legislation is one which would qualify parties’ prior agreement to a contractual time bar, in the court’s words at 717:

The second point, which flows from this, is that because such extension of time provisions are a “mechanism for relieving a claimant, in limited cases, from the effects of a time bar”, such provisions “should be capable of operation in a manner which is consistent with the full deployment, by both parties, of all arguments on substance available to each” [emphasis added]: Grimaldi at 716.

For these reasons, I consider that a court determining an application under s 10(1) of the AA should be satisfied that the arbitration agreement is operative and applies to the dispute in question before considering whether to extend time, rather than considering whether to extend time if there is, only on a prima facie basis, a valid and operative arbitration agreement applicable to the dispute.

I should add that as it happens, the question of which standard to adopt may not make much if any practical difference to my task in this case. Neither party contends that there is evidence beyond what parties have already adduced that would be relevant to this issue. Further, both parties also submit that its case is sufficiently made out on either standard of review:

(a) the Applicant submits that even if the court were to undertake a full determination of the dispute, there is enough evidence on record to support its submission that the Respondent had effectively admitted liability to at the very least two of its seven reinstatement claims; and

(b) the Respondent submits that even on a prima facie standard of review, there is no evidence on record to suggest that the Respondent had admitted liability in full to all the claims made against it.

This being the case, I turn now to consider the second issue of interpretation.

Issue 2: The proper interpretation of this arbitration agreement

I begin by setting out the terms of parties’ arbitration agreement.

The question then is how the phrase “liability being otherwise admitted” should be interpreted. Does the phrase require that liability has been wholly admitted by the insurer such that only mere questions of quantum remain? Or is the phrase broad enough to allow an insured to refer both questions of liability and quantum to arbitration, so long as some liability has been admitted?

At the opening of parties’ oral submissions, counsel for both the Applicant and Respondent helpfully framed their submissions by reference to two key points. The first is that this arbitration clause is not bespoke or novel. Rather, the key phrase of “liability being otherwise admitted” has been used in insurance policies for decades across the global industry. The second and related point is that the decisions of courts in other jurisdictions on the interpretation of this phrase will be helpful and persuasive.

Unfortunately, those decisions do not speak with one voice:

(a) The Applicant cites in its favour recent decisions of the US and Indian courts that so long as the insurer has admitted liability to some portions of the same claim, the dispute would fall within the scope of near-identically worded arbitration clauses.

(b) The Respondent instead relies on English case law to support the opposite proposition that only disputes of mere quantum, where liability has been fully admitted by the insurer, can be referred to arbitration.

I ultimately agree with the Respondent’s submission and interpret the phrase “liability being otherwise admitted” as requiring all questions or aspects of liability to have been admitted, leaving only mere questions of quantum for the arbitrator. To explain my conclusion, I now set out my review of the cases cited.

The approach in the US and Indian courts

The Applicant first relies on the US decision of Keller North America, Inc v Certain Underwriters at Lloyd's of London 687 F Supp 3d 712 (ED Va, 2023) (“Keller”) where Davis J (sitting in the US District Court for the Eastern District of Virginia) considered a materially similar arbitration clause in an insurance policy, which read:

In Keller, the insured’s submissions largely mirrored what the Respondent in the present dispute contends, namely that the phrase “liability being otherwise admitted” (at 719):

The court, however, preferred the alternative interpretation proffered by the insured that liability need only be partially admitted, as “it is also a reasonable interpretation to describe the remaining insurance dispute as a dispute about how much [the insurer] will be required to pay, rather than whether they will be required to pay …” [emphasis in original]: at 720. The court took the view that it was bound by a “heavy presumption of arbitrability” such that the court “must resolve a dispute about the scope of an arbitration agreement in favour of arbitration unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute”: at 719. This being the case, the court at 719–720 considered that “nothing in [the arbitration clause] specifically requires that all liability ([ie], coverage) issues be resolved prior to compelling arbitration” [emphasis in original] and that neither party had cited any precedent in support of that proposition; and accordingly, agreed that the insured may bring its dispute to arbitration.

A similar interpretation also prevailed in the Madras High Court in Tagros Chemicals India Private Limited v United India Insurance Company Limited [2025] 1 MLJ 133 (“Tagros”), albeit for one additional reason. The court came to this conclusion despite two key facts. The first is that in addition to the presence of the phrase “liability being otherwise admitted” in the arbitration clause in Tagros, the clause also explicitly identified the disputes it applied to as differences “as to quantum” as opposed to the broader term of “amount”. Specifically, the arbitration agreement in parties’ insurance clause read:

The second was that the court in Tagros departed from two earlier decisions in the Indian Supreme Court (at [14]–[15]) which held that such arbitration clauses ought to be “interpreted strictly” to only include disputes on matters of mere quantum on account of two reasons.

(a) The court also considered itself bound by more recent decisions of the Indian Supreme Court which found in favour of adopting the same presumption of arbitrability: Tagros at [24].

(b) However, in addition to this, allowing an arbitral tribunal to determine parties’ whole dispute on all its insurance claims even where parties have only partially admitted liability made sense where the claims are so intertwined and inseparable that it would be unreasonable to require parties to separately pursue these claims in litigation and arbitration: Tagros at [26].

The first reason adopted by the court in Tagros and Keller is, in the Applicant’s submission, identical to the “pro-arbitration stance” adopted by the Singapore courts including the principle of interpreting arbitration agreements generously to give effect to parties’ intention to have their disputes resolved via arbitration. The second reason is, in essence, what is known as the “one stop shop presumption” or the Fiona Trust principle laid down by Lord Hoffmann in Fiona Trust & Holding Corporation v Privalov [2007] 4 All ER 951 at [13], which has been affirmed in Singapore by the Court of Appeal in Tomolugen at [124].

These principles are definitely important. However, presumed intentions must give way to the actual intentions manifested objectively by the words of an arbitration agreement read purposively in context. Thus, one may start with “the presumed intentions of the parties as rational commercial parties” [emphasis added]; parties are presumed to have intended that their arbitration agreements have effect and for their disputes to be decided by a single forum: Tomolugen at [124]. But this is readily displaced by language which indicates parties’ intention to limit the scope of their arbitration agreement to a subset of disputes.

Davis J in Keller (at 719–720) noted that the arbitration clause does not expressly state that all liability must be otherwise admitted. But the phrase “liability being otherwise admitted” itself connotes that liability as a whole must be admitted: that is the import of the word “otherwise”. Thus, an admission of a breach of duty without an admission of causation is not of itself an admission of liability for the loss.

I now turn to the decisions from England.

The approach in the English courts

As both parties recognised at the hearing, arbitration clauses of this nature have been used in the insurance industry for decades in England. In fact, in some of the earliest English cases considering whether arbitration clauses were invalid agreements to oust the jurisdiction of the courts to deal with parties’ contractual rights, the House of Lords dealt with arbitration agreements in insurance policies that were the other way around, ie, they had to first refer disputes to an arbitral tribunal: see Scott v Avery [1843-60] All ER Rep 1 (“Scott v Avery”); Caledonian Insurance Company v Andrew Gilmour [1893] AC 85 (“Caledonian”).

Subsequently, the English courts have adopted a fairly consistent position.

The English approach where arbitration agreements exclude language that requires prior admissions of liability

Where parties opt not to include language that requires liability to have been admitted in their arbitration agreements, the English courts have accepted that such clauses are broad enough to “embrac[e] not only the assessment of damages, the computation of quantum, but also any dispute that might arise between the under writers and the insured respecting the liability of the insurers as well as the amount to be paid”: Scott v Avery at 6 (per Lord Campbell).

Such was also the position taken by the English Court of Appeal more recently in Sulamérica Cia Nacional de Seguros SA v Enesa Engenharia SA [2013] 1 WLR 102 (“Sulamérica”), which affirmed Cooke J’s decision below that “[a]s a matter of language, a failure to agree ‘as to the amount to be paid under this policy’ includes a dispute about whether any sum is due under the policy at all, and thus includes matters of liability and coverage” [emphasis added]: see Sulamérica at [40] and [49] affirming Sulamérica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWHC 42 (Comm) at [44]. Crucially, the language of the arbitration agreement in Sulamérica effectively mirrored that in the present case, minus the inclusion of the phrase “liability being otherwise admitted”. The clause read:

Accordingly, where parties opt to exclude language that requires liability to have been admitted in their arbitration agreements, the English courts will readily allow parties to have both disputes as to liability and quantum brought before an arbitral tribunal, much for the same reasons that the courts in Keller and Tagros have.

In Scott v Avery, Lord Campbell considered it a mere matter of giving effect to a “just construction” of parties’ agreement, such that even if parties’ dispute may encompass questions of law such as the alleged commission of a breach, such questions would rightly lie within the remit of an arbitral tribunal: Scott v Avery at 7.

Likewise, in Sulamérica, Moore-Bick LJ considered that barring any express language to the contrary, it would be “unusual” to find that “parties to a contract of this kind [would] establish separate and distinct procedures for resolving what in many cases are likely to be different aspects of the same dispute”: at [40]. In this, Moore-Bick LJ particularly noted at [40] that:

I place particular emphasis on the closing line of the above excerpt, that such an intention may be “easily provided for” because indeed, it is sometimes so provided in arbitration clauses; and when this is done, the courts have consistently granted such clauses their intended effect.

The English approach where arbitration agreements include language that requires prior admissions of liability

This brings me to the English cases relied on by the Respondent in these proceedings, which show that the English courts have interpreted the phrase “liability being otherwise admitted” to limit the claims referrable to arbitration to pure questions of quantum.

In Bath Racecourse, Mr Sean O’Sullivan KC (sitting as a Deputy Judge of the High Court of England and Wales) described arbitration clauses in insurance policies which include the phrase “liability being otherwise admitted” as “familiar territory for the English court”: at [240], see also [226]. In interpreting the inclusion of such language in an arbitration clause, the court in Bath Racecourse referred to the decision of Sir Nigel Teare J (also sitting in the High Court of England and Wales) in DC Bars Ltd v QIC Europe Ltd [2023] EWHC 245 (Comm) (“DC Bars”) who held at [30] that:

In both Bath Racecourse and DC Bars, the court considered arbitration clauses identical to that present before me, namely clauses which essentially read:

In arriving at their respective decisions, both courts referred to the earlier decision of Potter J (sitting in the High Court of England and Wales) in New Hampshire Insurance Co v Strabag Bau AG [1990] 2 Lloyd’s Rep 61 (“New Hampshire”). There, again faced with an in pari materia clause, Potter J accepted at 64 that the words “differences … as to the amount paid under this policy (liability being otherwise admitted)” are “plain in their meaning and intention”. Namely, they restrict parties’ agreement to arbitrate to only disputes about quantum once the insurers have admitted liability: New Hampshire at 64.

Dissecting the phrase “liability being otherwise admitted”, Potter J considered at 64 that:

Potter J’s decision on this point was not appealed. In fact, Teare J in DC Bars further notes that on appeal, Lloyd LJ described that point as “almost unarguable”: DC Bars at [28] citing Strabag Bau AG v New Hampshire Insurance Company [1991] ILP 478 at [11]. In this vein, Teare J makes a point at [29] with which I particularly agree, that where a pronouncement on how a clause ought to be interpreted has “stood for over 30 years”, any subsequent court called to interpret such clauses ought to be slow to depart from that interpretation:

Recognising an established definition of such clauses is a forceful and cogent point, because certainty is important for persons engaged in commerce.

Indeed, this is reinforced by the analysis of the House of Lords in Caledonian, which identified at least three decisions arising out of Scots law from the 1800s that entitled parties to refer technical but limited questions of valuation to arbitration: Caledonian at 94–100.

Other foreign jurisdictions

It is also helpful to refer to two further decisions, one from Hong Kong and one from Malaysia.

Maurellet J (sitting in the Hong Kong Court of First Instance) considered in Cheung Shing Hong Ltd v China Ping An Insurance (Hong Kong) Co Ltd [2020] HKCU 3051 (“Cheung Shing”) a clause which likewise mirrors that in the present case, except for the absence of the phrase “liability being otherwise admitted”.

Maurellet J held at [35] that such clauses are “apt to cover both issues of liability and quantum” [emphasis added]. In so deciding, Maurellet J distinguished between how arbitration clauses which include the phrase “liability being otherwise admitted” should be interpreted from those which excluded such language. In doing so, he recognised that the presence of this phrase would limit disputes referrable to arbitration to disputes which “[go] to the quantification of the insurance claim not to the insured’s primary liability in principle”: Cheung Shing at [26]–[29].

In similar vein, the High Court in Kuala Lumpur held in Allianz General Insurance Company (M) Bhd v Kapar Energy Ventures Sdn Bhd [2016] MLJU 1515 (“Allianz”), in relation to a clause which is materially identical to the one in the present case, that such clauses “provide that only the issue of quantum is arbitrable”: Allianz at [144] and [174]. Accordingly, the court considered that to the extent that “[t]he dispute here is obviously not confined to quantum, but it involves [a] question of liability” then “[t]here can never be any prejudice on the part of the [insured] when in the first place it is not entitled to arbitrate where issue[s] of liability arose”: Allianz at [174].

In arriving at the decision in Allianz, Badaruddin JC (as she then was) further considered the “one stop shop presumption” (at [145]) that the Applicant had alluded to when it sought to rely on the proposition in Tagros. While Badaruddin JC accepted that interpreting the arbitration agreement in this manner would result in parties having the same claims heard partly in court and partly in arbitration, she considers that this is merely the natural effect and most likely even the intention of parties when they had entered into such an agreement: [145] and [172]. In her view, it was “clear and unambiguous that parties did not intend [for] a ‘one-stop’ adjudication before an [a]rbitrator”: at [145]. The court in Allianz (at [146]) drew particular attention to Barclays Bank PLC v Nylon Capital LLP [2012] 1 All ER (Comm) 912 at [28] which states that:

This, in Badaruddin JC’s view, ought to apply likewise in the case of arbitrators being tasked to determine mere matters of quantum in insurance disputes: see Allianz at [147] and [173]. Relying on an earlier Kuala Lumpur High Court decision in Standard Chartered Bank Malaysia Bhd v City Properties Sdn Bhd [2008] 1 MLJ 233 at [24], Badaruddin JC considered that to read such arbitration agreements in a manner which unduly expands the scope of disputes to which they would apply would be tantamount to the court “re-writ[ing] the contract or ‘audit[ing] the bargain made between the parties’”: Allianz at [160]–[161]. Accordingly, regardless of the sensibility or commerciality of the agreement parties have arrived at, the court ought to “hold [parties] to the contract they have made by giving effect to the clear and unequivocal words of the contract”: see Allianz at [161] and [170].

In closing the decision, Badaruddin JC adopted at [170] the well-known principle set out by Lord Hoffmann (sitting in the Privy Council) in Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988 at [16].

Such a view is also in keeping with the widely accepted position here in Singapore, which I consider aptly expressed by Chong JA, delivering the grounds of decision of the Court of Appeal in BNA v BNB [2020] 1 SLR 456 at [104]:

My decision

Summarising my analysis above, there are three principal reasons for my interpretation of the phrase “liability being otherwise admitted” as limiting the arbitration agreement to disputes of mere quantum:

(a) This interpretation comports with the language of the arbitration agreement. The word “all” is not needed to give the clause the meaning I consider it holds. Rather, one would need to qualify the word “liability” by a word like “some” or “partial” to give it a different effect.

(b) This interpretation fits with a reasonable commercial purpose, namely that legal questions could be decided by judges, while technical questions of quantum could be decided by a person qualified in a technical discipline.

(c) This interpretation has acquired a degree of consistency over decades as reflected by my survey of the English decisions. This is especially important in the context of the insurance industry.

Issue 3: Whether liability has been otherwise admitted

On the proper interpretation of the arbitration agreement, I find that liability has not been otherwise admitted and so the arbitration agreement has not become operative. I explain.

It is common ground between parties that even if the Respondent may be taken to have admitted liability for some of the Applicant’s reinstatement claims, at least one claim remains in clear dispute, ie, parties’ dispute on whether the Cold Rooms fell within the Policy. Further, following the Applicant’s sale of the Premises, parties now also dispute whether the Applicant’s reinstatement claims may now be converted to claims for a loss in value under the Policy. Thus, it is not the case that liability has been otherwise admitted. Accordingly, the agreement to arbitrate is not operative.

This being the case, I do not have any power to extend time for the Applicant to commence arbitration.

Any perception that this interpretation bears harshly against the Applicant is mitigated by the fact that it is not difficult for an insured to file a protective claim in court within the contractual time bar, if the insurer is dragging its feet on the question of liability.

Conclusion

For these reasons, I dismiss the application for extension of time to pursue the matter in arbitration.

I began with the invocation by the Applicant of the jurisdiction’s perceived pro-arbitration stance. My decision has gone against the Applicant, but this should not be perceived as “anti-arbitration”. Rather, my approach has been to interpret the arbitration agreement in context and purposively, and having done so, it is clear that the Applicant cannot bring its claims, which still include matters for which liability has not been admitted, within the scope of the arbitration agreement.