Pitfalls of an ambiguous arbitration clause: Singapore Court of Appeal provides guidance

A dispute resolution clause provides that the main agreement is governed by PRC law, and that “any and all disputes shall be finally submitted to the Singapore International Arbitration Centre (“SIAC”) for arbitration in Shanghai, which will be conducted in accordance with its Arbitration Rules”. Is the arbitration agreement governed by Singapore or PRC law, and is the arbitration seated in Singapore, Shanghai, or elsewhere?

These questions arose in the context of a challenge to an arbitral tribunal’s jurisdiction (BNA v BNB and another [2019] SGCA 84 (“BNA”)). The seat of arbitration and the proper law of the arbitration agreement in turn determined whether the Tribunal had jurisdiction – the arbitration agreement was potentially invalid if PRC law applied and if the arbitration was seated in the PRC. Interestingly, the arbitration clause attracted a different interpretation from each of the Tribunal, the High Court, and the Court of Appeal – a salutary tale of the pitfalls of a vaguely-worded arbitration clause. 

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