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Nature of Matter

Re arbitrability of disputes

Case Summary

1. People Interactive (India) Pvt. Ltd. (“the Company”), the owner of Shaadi.com, a Mumbai based online matchmaking website, was founded by Anupam Mittal and his cousins, who served as shareholders.
2. Westbridge Ventures II Investment Holdings (“Westbridge”), a private equity fund held 44.38% of the shares in the Company whilst Anupam Mittal held 30.26% of the shares. Westbridge and Anupam Mittal and his cousins entered into a Shareholders’ Agreement (“SHA”).
3. Clause 20.1 of the SHA stated that 

"SHA and its performance shall be governed by and construed in all respects in accordance with the laws of the Republic of India".

    Further, Clause 20.2 provided that

"all such disputes that have not been satisfactorily resolved under Clause 20.1 above shall be referred to arbitration...and the place of the arbitration shall be Singapore."

4. SHA also dictated that if an Initial Public Offering (“IPO”) was not completed within five years from the closing date, then Westbridge could redeem all its shares and, if necessary, “drag along” all other shareholders to sell their shares to a third-party. After completion of the five year period, no IPO was completed. Also, the relationship between the parties soured when Westbridge sought to exit the Company.
5. Westbridge sought to divest its interest in the Company by selling its shares to an alleged competitor of Shaadi. In addition, Westbridge refused to consent to the re-appointment of Anupam Mittal and Anand Mittal as the managing and founding directors of the company, respectively. Hence, the manifestation of a dispute.
6. Anupam Mittal filed a petition before the National Company Law Tribunal (“NCLT”) in Mumbai, India to injunct Westbridge from interfering in the management of the company on the grounds of corporate oppression.
7. In response, Westbridge applied for a permanent anti-suit injunction in the Singapore High Court, based on Singapore seated arbitration clause within the SHA, to restrain the Company from pursing its claim in the NCLT in India.
8. Singapore High Court granted Westbridge permanent anti-suit injunction citing that the Company breached the arbitration agreement by initiating the NCLT proceedings. The High Court took that stance because under Singapore law, disputes involving corporate oppression are arbitrable.
9. Anupam Mittal filed an appeal in the Singapore Court of Appeal (“SGCA”) against this judgement stating that this issue should be decided according to the law governing the arbitration agreement and not the law of the seat.

Proceedings before the Singapore Court of Appeal

1. Anupam Mittal argued that the law of the arbitration agreement is the law that governs subject-matter arbitrability. As the law in this matter was Indian law, the case of corporate oppression and mismanagement was non-arbitrable and NCLT would have exclusive jurisdiction over such disputes.
2. Westbridge argued that the law of the seat governs the question of arbitrability. Considering the law of the seat is Singapore in this matter, the Singapore High Court was correct in imposing the anti-suit injunction since disputes of corporate oppression and mismanagement are arbitrable pursuant to Singapore law.
3. SGCA adopted a "composite approach" where:

-   From the public interest point of view, States have the incentive to bar certain disputes from arbitration. SGCA differentiated between Sections 11 and 31 of the International Arbitration Act, 1994 to hold that at a pre-award stage, the courts in Singapore may consider the public policy of other countries (and not just Singapore law) to decide if a dispute is arbitrable. 

-   The source of the tribunal's jurisdiction comes from the agreement of the parties. The arbitration agreement determines what disputes the parties have agreed to arbitrate, what powers the tribunal hold while adjudicating the dispute, and what rules are applicable to the procedure. The law of seat comes into play after the tribunal renders its award. However, at the time of enforceability or setting aside of the award, the court will apply the law of seat to determine the arbitrability of the subject matter. 

To bridge the gap between these different considerations, the court found a middle ground.

4. The SGCA examined here what law governed the arbitration agreement. In doing so, it applied the three-stage test set out in BCY v BCZ [2017] 3 SLR 357 (which followed the approach in the English case of Sulamerica), which looks at:

5. The SGCA found that the reference to Indian law found at Clause 20.1 of the SHA does not constitute as an express choice of law. The Court considered whether the parties impliedly chose Indian law as the governing law of the arbitration agreement, in light of their choice of Indian law as the law of the contract. However, the Court found sufficient indication to displace this presumed choice of Indian law. As the Court reasoned, the parties, which are of Indian nationality, must have known that corporate management disputes are generally not arbitrable in India, yet they specifically chose to arbitrate them under Singapore law and in Singapore. An implied choice of Indian law would negate the parties' intention to arbitrate those disputes.

Finally, SGCA, concluded that because the seat of arbitration is Singapore, Singapore law had the most real and substantial connection with the arbitration agreement.

6. Based on the above, the SGCA held that the claims at hand were arbitrable, and that Anupam Mittal’s commencement of legal proceedings in India breached the arbitration agreement in the SHA. The Court thus maintained the anti-suit injunction against the Company’s pursuit of the Indian proceedings.