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Engedi

155 bytes removed, 18:23, 11 January 2011

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1. Section 6(1) of the IAA sets out the threshold requirements that must be met before the Court is bound to grant a stay of legal proceedings in favour of international arbitration. These are:

a) An international arbitration agreement must exist.

b) A party to that agreement must institute court proceedings against another party to the same agreement. c) The proceedings must be in respect of a matter which is the subject of the agreement. d) The party seeking a stay must have entered appearance in the court proceedings. e) The party seeking a stay must do so before delivering any pleading or taking any other step in the proceedings.

2. Once these requirements are met, the Court will be obliged to grant a stay unless the arbitration agreement is null and void, inoperative, or incapable of being performed. The stay may be granted subject to such terms or conditions as the Court thinks fit.

4. The Court upheld the traditional distinction between in rem and in personam claims. As the in rem claim could not be a matter that was a subject of the arbitration agreement between the Plaintiff and the Defendant, the threshold requirements of Section 6 were not met in this case and the Court was not obliged to grant a stay of proceedings.

a. While an action in personam and an action in rem may involve the same cause of action, the defendants of the respective actions are regarded as different parties.

b. The Singapore Court Appeal had, in Kuo Fen Ching v Dauphin Offshore Egineering & Trading Pte

Ltd (1999) rejected the proposition that the owner of the res, as opposed to the res itself, was the defendant to an action in rem. c. The Court was not obliged to grant a stay of proceedings because there was no arbitration agreement between the Plaintiff and the notional defendant of the in rem action, which was the res. d. The owner of the res was no longer the Defendant, but the Intervener. As such, the in rem claim was not identical to the in personam claim. Therefore, the in rem claim could not be a matter that was a subject of the arbitration agreement between the Plaintiff and the Defendant falling within the ambit of Section 6 of the IAA.

e. If the Plaintiff and Defendant were to proceed to arbitration, and the in rem action in

Singapore was to be stayed, the Intervener would not be able to protect its interest in the matter. The Intervener would not have any rights in the arbitral process except those voluntarily conferred on it by the Plaintiff and the Defendant as the parties to the arbitration agreement.

f. Even if the Plaintiff was prepared to allow the Intervener to participate in the

arbitration, the process of arbitration is a consensual one and a party may not be forced to arbitrate against its will. The Intervener had also indicated that it wanted to proceed with litigation in Singapore. The Intervener, as a party to the action in rem only, was not a party to any arbitration agreement with the Plaintiff and could not therefore be forced to litigate/arbitrate in another forum.

g. In any event, the arbitral tribunal would have no jurisdiction to hear the in rem claim.

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