By Daniel Seligman, Columbia Research Corp
Nature of the Case
Summary of Ruling
The High Court upheld the AR’s decision not to strike out the Plaintiff’s claim. But the High Court granted the stay of the court litigation pending the outcome of the arbitration.
Reasoning
On the issue of striking out the Plaintiff’s claims, the High Court cited Order 18 Rule 19(1) of the Rules of Court, which state that a court may strike out a pleading if it discloses no reasonable cause of action or is scandalous, frivolous or vexatious or is otherwise an abuse of the process of the court. The power to strike should be invoked where it is plain and obvious that the plaintiff does not have a cause of action. But the high threshold was not met in this case. On the facts, the Court was of the view that the Plaintiff was acting to preserve its own rights, out of concerns relating to the limitation periods of its claims and stated that it can hardly be said that a party abuses the process of the court simply by acting in a manner that preserves its rights.
The High Court then analyzed the Defendant’s request for a stay of the court proceedings. The primary issue was whether the court’s inherent jurisdiction extended to granting a stay of court proceedings in favour of arbitration. “In my view, such a jurisdiction does exist and is consistent with the court’s inherent jurisdiction to grant a case management stay.” The starting point of the analysis is the Court of Appeal’s decision in Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2016] 1 SLR 373 (“Tomolugen”), which held that the plaintiff’s right to sue whoever he wants and where he wants is a fundamental but not an absolute right. It can be restrained to a modest extent when the plaintiff’s claim is stayed temporarily pending the resolution of a related arbitration.
Granting the stay, the Court was of the view that the Plaintiff had previously demonstrated its willingness to proceed via arbitration and had only turned to the courts due to the position taken by the Defendant in the arbitration and legitimate concerns regarding the limitation period. A stay of the court proceedings will not prejudice the Plaintiff as it can fully avail itself of those rights should the stay be lifted. Furthermore, the Plaintiff itself has been willing to arbitrate and consistently recognized its obligation to do so. This was particularly clear in this case at the early stages of this dispute, and even in the face of persistent jurisdictional objections from the Defendant. Third, the parties to the arbitration and court proceedings are identical, as are the factual bases and claims raised in both proceedings; hence there was a risk of inconsistent findings between the court proceedings and arbitration if the court proceedings were not stayed. Finally, because there are pertinent questions about jurisdiction, the tribunal can deal with those itself. That course of action was still available in the case because the Plaintiff had only written to the SIAC to hold the pending case in abeyance and had not discontinued the proceedings.
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