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Singapore High Court confirms the application of Kompetence-Kompetence

In The Titan Unity, the Singapore High Court considered an application to stay court proceedings in favour of arbitration.

The claimant had commenced court proceedings in Singapore relating to the defendant’s failure to deliver a cargo under certain bills of lading.  The defendant applied for a stay of the proceedings in favour of arbitration under section 6 of the International Arbitration Act (“IAA“) on the basis that an arbitration clause in a separate time charter party between the parties had been incorporated into the bills of lading. The claimant denied the existence of an arbitration agreement between the parties.

In considering the defendant’s application the court held that, for the purposes of granting a stay under section 6 of the IAA, it need only be satisfied that an arbitration agreement existed on a prima facie level, a requirement which would be met in all but the most obvious cases. The dispute should then be referred to the arbitral tribunal to determine if the arbitration agreement is valid and binding. The court was not required to conduct a full review of the evidence and to determine conclusively whether an arbitration agreement existed.  The court found that the defendant had prima facie established the existence of an arbitration agreement and therefore granted the stay.

Although this is a decision of an Assistant Registrar (and is therefore not binding on the High Court), the judgment confirms the application of the principle of Kompetence-Kompetence by the Singapore courts and the courts’ support for international arbitration.  The case is also a reminder to would be claimants of the importance of ensuring that claims are brought in the correct forum in order to avoid unwanted costs and delays.

Case: The Titan Unity [2013] SGHCR 28

*A version of this article was originally published by Practical Law Arbitration