(Singapore) International Arbitration Act - Section 6 (2002 Ed)
(Singapore) Companies Act (Cap 50, 2006 Rev Ed)
Decided in: 2017
This was an appeal brought by a majority shareholder, L Capital against the Singapore High Court's decision refusing a stay of court proceedings in favour of arbitration on the ground that minority oppression claims were not arbitrable. Maniach, a minority shareholder in the Jones the Grocer group of companies resisted the appeal, arguing that his minority oppression claim against L Capital Jones was not arbitrable.
Maniach argued that while the Singapore case of Tomolugen had held that minority oppression claims were generally arbitrable, his case possessed features which raised the public policy exception to arbitrability. The gravamen of his argument was that L Capital had abused court process to place two subsidiaries owned by the group under administration in Singapore, and in Australia to transfer one of the subsidiaries' only asset, its shares, to a third party related to L Capital for no net consideration.
The Singapore Court of Appeal found Maniach's contention without merit and held that the question of an abuse of the judicial process was neither the essence of the present dispute nor a necessary step in proving Maniach's claim. The issue rather was whether there was unfairness in the majority shareholder procuring the transfer of all the shares in the subsidiary to a third party in exchange for extinguishing debts. Maniach had not sought any relief for the alleged abuse of judicial process. Even if the court or tribunal adjudicating the dispute were to find that there was an abuse of process, such a finding would only be incidental to its resolution of the minority oppression dispute. Hence L Capital had succeeded in showing that the dispute was arbitratable.
However, the Singapore Court of Appeal found that because L Capital's subsidiary had taken a step in the court proceedings by bringing an application to strike out the minority oppression claim brought by Maniach in Singapore Court of Appeal, the court therefore held that once such step is taken, it would be irrevocable, even if the striking out application was not eventually pursued. The Court concluded that L Capital and its subsidiary’s applications to stay the proceedings in favour of arbitration are therefore dismissed.
Member Since: 26 Jul 2020 | Total Articles Contributed:9
About Author : We provide legal advisory, transnational and litigation support on all aspects of Indian civil, corporate and commercial law. We are updated and in sync with the commercial and market realities.
The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author. Compliance Calendar LLP and the Author of this Article do not constitute any sort of professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove. Compliance Calendar LLP shall not be responsible for any loss or damage in any circumstances whatsoever.