Substantive Validity Agreement

This case is a welcome confirmation of the application of the jurisdictional principle in cases where the existence of the arbitration agreement is contentious. It is now clear that parties challenging the existence of an arbitration agreement in Singapore should do so before the Arbitration Tribunal itself, unless there is very strong evidence that there is no arbitration agreement. With its decision, the Singapore court strengthened its pro-arbiter attitude and the policy of primacy over the arbitral tribunal. In a recent English trade negotiation process, Habas Sinai, an agent (in violation of the client`s instructions) entered into a contract without legislation and a compromise clause for LCC Schieds in London. In the absence of an explicit legal provision in the material contract, the applicable right of the arbitration agreement would normally be the right of headquarters, that is, English law. It was argued that in this case the seat should be ignored because it was agreed without real authority. The current law would then be that, with the closest connection with the material contract, would be Turkish law (which was the intention of the principal obliged). The court has considered whether the existence of an arbitration agreement is at issue, it is a matter of the court of arbitration or the court. The Court considered the legal situation and the decision of the English High Court on the same issue in the case of Nigel Peter Albon (trade of N A Carriage Co) against Naza Motor Trading Sdn Bhd and anor [2007] 2 All ER 1075.

In that case, the English High Court found that the wording of the English equivalent of s.6 IAA (section 9, paragraph 1, of the Arbitration Act 1996) meant that the Tribunal had to decide whether or not there was sufficient evidence to enter into an arbitration agreement. If, at the time of the application, it was not possible to resolve this issue on the available evidence, the court could not grant a mandatory stay under section 9 (1) of the Arbitration Act (but, separately, it was open to exercise its inherent jurisdiction over the stay of proceedings). The Supreme Court again stressed London`s pro-leader arbitration status, confirming that English courts are not deterred from giving the anti-suit relief by arguments, that an arbitration agreement is governed by foreign law or that the scope of the arbitration agreement is determined in foreign proceedings. The first was the election of an English seat. The choice of a court other than the seat of arbitration suggests that the law of that country will apply to the procedure with respect to the conduct and control of arbitration. This indicates that the parties intended to regulate English law on all aspects of the arbitration agreement, including matters relating to the formal validity of the agreement and the jurisdiction of arbitrators.