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This article was originally published in Practical Law Arbitration. Reproduced with permission. This article is co-written by Reed Smith Pte Ltd and Resource law LLC who together form the Reed Smith Resource Law Alliance in Singapore. Reed Smith LLP is licensed to operate as a foreign law practice in Singapore under the name and style, Reed Smith Pte Ltd (hereafter collectively, “Reed Smith”). Where advice on Singapore law is required, we will refer the matter to and work with Reed Smith’s Formal Law Alliance partner in Singapore, Resource Law LLC, where necessary.

In Gulf Hibiscus Ltd v Rex International Holding Ltd and another [2019] SGHC 15, the Singapore High Court confirmed its power to lift a stay of proceedings in favour of arbitration, pursuant to its inherent case management powers. The court found that it can exercise its discretion, even where the stay was ordered subject to conditions, and regardless of whether those conditions were met.

Autoren: Kohe Hasan Justine Barthe-Dejean

* Kohe Hasan is a Partner in Reed Smith's Singapore office and a Director of Resource Law LLC.  Justine Barthe-Dejean is an Associate in Reed Smith's Singapore office.

Speedread:

The Singapore High Court has confirmed its power to lift a stay of proceedings in favour of arbitration, pursuant to its inherent case management powers. In a previous decision, the court had granted a stay of court proceedings in favour of arbitration. The plaintiff had commenced proceedings against the shareholders of a party with which it had entered into an arbitration agreement. The stay was granted pursuant to the court’s case management powers and to “ensure the efficient and fair resolution of disputes". The stay was subject to several conditions which, if not satisfied, would entitle either party to apply for the stay to be lifted.

The plaintiff subsequently applied to lift the stay, on the basis that certain conditions were no longer satisfied. The court found that in “exceptional circumstances", as was the case here, it would lift the stay, regardless of whether the conditions were satisfied. Conscious that the stay should not continue indefinitely, the court’s discretion was grounded in its need to ensure the fair and efficient resolution of disputes.

This decision clarifies the Singapore courts’ case management powers in the context of stays of litigation in favour of arbitration. In particular, it illustrates that where the court can exercise its discretion to order a stay, it has a ‘mirror’ discretion to lift that stay. Further, in exceptional cases such as this one, the court can do so even where a number of conditions were associated with the stay, and regardless of whether those conditions were satisfied. The defendants have obtained leave to appeal to the Singapore Court of Appeal. (Gulf Hibiscus Ltd v Rex International Holding Ltd and another [2019] SGHC 15 (24 January 2019).)