When There Is No Arbitration Agreement

`The court seised of an action in a case which is the subject of an arbitration agreement shall, at the request of a party, at the latest at the time of its first statement on the merits of the dispute, refer the parties to the arbitration, unless it finds that the agreement is void, ineffective or unenforceable.` This claim arises from the sIAC arbitration initiated by the defendants against the plaintiff. The plaintiff allegedly entered into a guarantee (the “guarantee”) for a third party`s loan. The guarantee contained an arbitration agreement that provided for SIAC arbitration for each matter raised “including any question relating to its existence, validity or termination.” The third-party borrower defaulted and the defendants invoked the guarantee, which was not respected. The defendants initiated SIAC arbitration against the plaintiff for non-payment. After Company A had materially breached its obligations under the Agreement, Company B applied to the Arbitration Board for arbitration. Company A participated in the arbitration hearing and submitted its defence and evidence. After the Arbitration Commission announced its award, Company A asked the Fushun Intermediate People`s Court to set aside the award, claiming that the arbitration clause contained in the agreement was invalid because it stipulated that the dispute could be submitted to the Arbitration Commission or a people`s court. After an analysis by the main authorities, the tribunal was satisfied that there is a presumption that if the parties include an arbitration clause, it is assumed that they intend to determine all their substantive disputes by arbitration. The tribunal noted that the arbitration clause provides that “any dispute” shall be submitted to arbitration and that it is broad enough to cover all issues raised between the parties to the proceedings in their current form. If the parties had wanted some disputes to be submitted to arbitration, but others had been subject to legal proceedings, they would have stated so in the contract. The respondents argued that, in order to comply with the fact that Article 6(2) applied, the High Court of Singapore had to be satisfied only on an apparent basis that an arbitration agreement existed to grant a stay. For this reason, the defendant`s position was that the Singapore High Court had no choice but to refer the matter back to court for decision, since the guarantee appeared to have been signed by the plaintiff.

The arbitral tribunal had jurisdiction despite the absence of an express arbitration clause. The plaintiff`s lawyer threatened to initiate legal proceedings if payment was not made immediately. As a result of this correspondence, counsel for the parties conducted a series of telephone conversations in which it was alleged that counsel for the defendant had made statements of an “extraordinarily derogatory nature” against the plaintiff and “was dismissed when asked to substantiate the allegation that [the plaintiff] was not trustworthy.” Arbitration through a submission agreement is, in fact, the apotheosis of consensualism, as the parties accept arbitration with full knowledge of the scope of an existing dispute. The case highlights the English Court`s pragmatic and pro-arbitration approach, but also recalls the importance of always including explicit dispute settlement provisions in settlement agreements and other additional contractual documents. (b) correspondence, telex, telegrams or other means of telecommunication containing a record of the agreement; or (c) an exchange of defence and defence responses alleging the existence of the agreement by one party and not contested by the other […].