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Case 4: Ascertainment of Singapore International Arbitration Act through previous cases determines the validity of arbitration agreement
—A sales contract dispute between a technology company in Israel and a technology company in Beijing

Updated: December 23, 2022

When dealing with foreign-related cases, the court should first conduct a proactive review of competence and jurisdiction, and review the validity of any arbitration clause. If there is a valid arbitration agreement, the plaintiff's lawsuit should be dismissed. If the parties do not agree on the applicable law for the validity of the arbitration agreement, the law of the place of arbitration shall be applied as the applicable law. Ascertainment of foreign laws can adopt the foreign law that has been ascertained in previous cases, to save the time of ascertainment and improve efficiency.

An Israeli technology company signed an exclusive agency agreement with a technology company in Beijing in June 2014. The dispute resolution clause in the agreement stipulated that contract disputes shall be submitted to the Singapore International Economic and Trade Arbitration Commission for arbitration. After that, the two parties signed three supplementary agreements, none of which contained a new dispute resolution clause. Since the technology company in Beijing failed to fulfill the agreed payment obligations, the Israeli technology company lodged a lawsuit requesting the payment.

After review, the court held that since the two parties did not explicitly agree on the dispute resolution method in the three supplementary agreements, the dispute resolution clauses agreed by the two parties in the main agreement, the exclusive agency agreement should be applied. Both sides agree that the validity of the foreign-related arbitration agreement in this case shall be governed by the provisions of Singapore laws ascertained in the (2017) Jing 04 Civil No. 24 case, and no further ascertainment needed to be made. According to the provisions of Article 6 of the Singapore International Arbitration Act, "unless the arbitration agreement is null and void, inoperative or incapable of being performed, the Singapore court must recognize the validity of the arbitration agreement and stay the proceedings so far as the proceedings relate to the matter”, as long as the intention of the parties to arbitrate is clear in the arbitration agreement. An arbitration agreement including a non-existent or ambiguous arbitration institution can also be valid and supported. Although the exclusive agency agreement stipulated a non-existent arbitration institution, the intention of both parties to submit the dispute to an arbitration institution for arbitration was clear. Accordingly, the lawsuit filed by the Israeli technology company was dismissed.


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