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Case 8: Determination of the validity of an arbitration agreement when the parties have willingly chosen arbitration
—An international trading company and an international metal company applied to determine the validity of their arbitration agreement

Updated: December 23, 2022

Arbitration is an important way to resolve international commercial disputes. The parties often fail to identify the arbitration institution precisely due to the wrong name of the arbitration institution in the arbitration agreement, which is called a pathological arbitration agreement. The court heals the "flaw" through judicial review, respects the willingness of the parties to resolve disputes through arbitration, and tries every means to make the arbitration agreement effective. This move complies with the original intention of the parties to choose arbitration to resolve disputes, promotes and supports the development of arbitration, and creates a sound legal environment for international commercial arbitration.

An international trading company and an international metal company signed a sales contract in March 2015. Article 17 of the contract stipulated that all disputes arising from the execution of, or in connection with the contract should be settled through friendly negotiation between both parties. In case no settlement could be reached through negotiation, the disputes would be submitted to the "Singapore International Trade Arbitration Commission" for arbitration in accordance with the arbitration rules of the United States. The arbitration award was to be final and binding upon both parties. The international metal company filed for arbitration with the Singapore International Arbitration Centre in August 2016 in accordance with that clause. The Singapore International Arbitration Centre accepted the case on September 22, 2016 and issued a notice of acceptance to both parties on September 28, 2016. On May 5, 2017, the international trading company filed an application for judicial review of arbitration with this court, arguing that "Singapore International Trade Arbitration Commission" is not the exact name of any arbitration institution in the Republic of Singapore, and requesting legal confirmation that the arbitration agreement involved in the case was invalid. After review, the court held that the parties explicitly expressed their intention to submit disputes to the "Singapore International Trade Arbitration Commission" in the sales contract. Although the "Singapore International Trade Arbitration Commission" is not the clear and specific name of any arbitration institution in Singapore so that the name agreed in the contract is wrong and the exact name of the arbitration institution intended is impossible to determine, according to the content of the contract, it can be ruled that the parties have clearly expressed their intention to choose arbitration within the legal framework of Singapore. According to the Law of the People's Republic of China on Choice of Law for Foreign-related Civil Relationships and relevant judicial interpretations and the content of the parties' arbitration clauses, the court held that the place of arbitration should be identified as Singapore. Under the ascertained laws of Singapore, the arbitration agreement can be deemed valid. From the analysis of the content of the New York Convention, the development trend of international commercial arbitration, and the provisions of judicial interpretations in China, arbitration agreements shall be made effective to the greatest extent possible, which respects the original intention of parties to choose arbitration as a means of resolving disputes, helps promote and support the development of arbitration, and creates a sound legal environment for international commercial arbitration. The court determined that the arbitration agreement involved in the case was valid and rejected the international trading company's application for invalidation of the arbitration agreement. 


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