Case Details
- Citation: [2021] SGCA 77
- Case Number: Civil Appeal No 204 of 2020
- Decision Date: 10 August 2021
- Court: Court of Appeal of the Republic of Singapore
- Coram: Sundaresh Menon CJ; Judith Prakash JCA; Steven Chong JCA
- Judgment Author: Steven Chong JCA (delivering the judgment of the court)
- Plaintiff/Applicant (Appellants): Cheung Teck Cheong Richard and others
- Defendant/Respondent: LVND Investments Pte Ltd
- Legal Area: Arbitration — Agreement
- Statutes Referenced: Arbitration Act (Cap 10, 2002 Rev Ed) (“AA”); Australian Act; Singapore Arbitration Act
- Lower Court Decision: Appeal from [2021] SGHC 28
- Judgment Length: 36 pages, 22,953 words
- Counsel for Appellants: Chan Wah Teck Jeffrey SC, Hannah Alysha binte Mohamed Ashiq and Uday Duggal (TSMP Law Corporation)
- Counsel for Respondent: Lee Eng Beng Beng SC, Sim Chee Siong and Koh En Da Matthew (Rajah & Tann Singapore LLP)
- Parties (as described in metadata): Richard Cheung Teck Cheong — Shan Ming Airconditioning (S) Pte Ltd — Sim Solutions Pte Ltd — Ramachandran Ananthanarayanan — Tan Kay Kerng — Sun Xihua — A Wen Mianshi Pte. Ltd. — Achi501 Pte. Ltd. — M2L Holding Investment Pte. Ltd. — Chew Chai Har — Andrew Yeo Seng Thean — Lim Hui Hung Luanne — Chiam Chye Hong — LVND Investments Pte. Ltd.
- Cases Cited (as provided): [2021] SGCA 77; [2021] SGHC 28
Summary
In Cheung Teck Cheong Richard and others v LVND Investments Pte Ltd [2021] SGCA 77, the Court of Appeal considered whether an arbitration agreement could be “deemed” to exist under s 4(6) of Singapore’s Arbitration Act (Cap 10, 2002 Rev Ed) (“AA”) even where the court had found, as a matter of fact, that no arbitration agreement existed. The dispute arose from multiple sale and purchase agreements (SPAs) for shop units in Macpherson Mall, where purchasers alleged fraudulent misrepresentations and suppression of material facts.
The High Court had stayed court proceedings in favour of arbitration, finding both that (i) the parties had concluded an ad hoc arbitration agreement independent of the SPA clause, and (ii) alternatively, s 4(6) could deem an effective arbitration agreement. On appeal, the Court of Appeal held that the High Court’s finding of an ad hoc arbitration agreement could not be upheld. More importantly, the Court of Appeal answered the central legal question in the negative: s 4(6) cannot be used to create or form a new arbitration agreement through its deeming effect. Instead, for parties who have not denied the existence of an arbitration agreement, s 4(6) serves a limited function—precluding reliance on the absence of an agreement in writing to challenge validity for the purposes of the AA.
What Were the Facts of This Case?
The respondent, LVND Investments Pte Ltd (“the Developer”), developed Macpherson Mall. The appellants (“the Purchasers”) had purchased shop units under separate SPAs executed between 2013 and 2016. In total, 16 purchasers were originally involved in the suit, but the appeal ultimately comprised 13 purchasers who were parties to the appeal and collectively purchased nine units under nine SPAs.
The Purchasers’ claims against the Developer were rooted in allegations of fraudulent misrepresentation and suppression of material facts. In particular, they alleged that the sizes of their units were smaller than what they believed they were buying. These allegations formed the basis of their suit in the High Court, where they sought rescission of the SPAs or damages in lieu of rescission, together with damages for losses, costs, and expenses incurred as a result of entering into the SPAs.
When the disputes arose, the Purchasers engaged a law firm (“Former Solicitors”) which advised that cl 20A.1 of the SPAs constituted an arbitration agreement. On 6 May 2019, the Former Solicitors issued a Notice of Arbitration (“1st NOA”) against the Developer to commence arbitration under the auspices of the Singapore International Arbitration Centre (“SIAC”). The Developer’s solicitors (Rajah & Tann Singapore LLP, “R&T”) responded by objecting to multiple aspects of the proposed arbitration, including SIAC administration, application of SIAC Rules, and consolidation into a single arbitration. The SIAC Court of Arbitration later found that it was not prima facie satisfied that the parties had agreed that SIAC would administer the arbitrations or that the SIAC Rules would apply. The SIAC accordingly terminated the arbitrations commenced by the 1st NOA.
Undeterred, the Purchasers issued a second Notice of Arbitration (“2nd NOA”) on 28 June 2019, requesting that the disputes be referred to an ad hoc arbitration in Singapore and nominating a sole arbitrator. R&T objected, characterising the Purchasers’ approach as an attempt to consolidate different arbitrations in a single ad hoc arbitration. Further correspondence followed, including communications with the SIAC President and R&T’s position that no valid ad hoc arbitration had been commenced because the attempt was defective, and that if each purchaser wished to arbitrate, multiple separate ad hoc arbitrations and arbitrators would be required. In September 2019, the Purchasers discharged the Former Solicitors and engaged new counsel. On 3 February 2020, the Purchasers notified SIAC that they did not wish to proceed with the arbitration purportedly commenced by the 2nd NOA, and that attempt was discontinued.
On 4 March 2020, the Purchasers filed the High Court suit. On 25 March 2020, the Developer applied for a stay of proceedings under s 6 of the AA, arguing that the parties were bound by an arbitration agreement in cl 20A.1 of the SPAs, or alternatively that an arbitration agreement had been concluded by conduct.
What Were the Key Legal Issues?
The appeal required the Court of Appeal to address several interrelated issues concerning the existence and enforceability of an arbitration agreement. First, the High Court had found that cl 20A.1 was not an arbitration clause within the meaning of s 4(1) of the AA. That aspect was not in issue on appeal. The focus therefore shifted to whether there was nonetheless a valid arbitration agreement independent of cl 20A.1.
Second, the Court of Appeal had to consider whether s 4(6) of the AA could operate to deem an effective arbitration agreement in circumstances where the court’s factual findings were that no arbitration agreement existed. This was the “interesting point of law” highlighted by the Court of Appeal: whether the deeming provision could be relied upon to create an arbitration agreement notwithstanding the absence of a pre-existing agreement as a matter of fact.
Third, the High Court had also dealt with other issues (including mistake, estoppel, and whether the court should exercise discretion not to order a stay). However, the Court of Appeal’s reasoning turned primarily on the threshold question of whether an arbitration agreement existed, and if so, whether s 4(6) could supply what was missing.
How Did the Court Analyse the Issues?
The Court of Appeal began by emphasising the broader context: the correspondence and conduct of the parties showed that they were “at loggerheads on just about everything” concerning the terms of the intended arbitration reference. Against that backdrop, the Court of Appeal found it “intuitively questionable” to conclude that the parties nonetheless made an ad hoc arbitration agreement independent of the SPA clause.
On the first issue, the Court of Appeal held that the High Court’s finding that an ad hoc arbitration agreement existed could not be upheld. The Court of Appeal’s approach reflects a careful distinction between (i) unilateral steps taken by one party to commence arbitration and (ii) the mutual assent required to form an arbitration agreement. The record showed repeated objections by the Developer to the structure and administration of the arbitrations, including objections to SIAC administration and to the consolidation of multiple disputes into a single arbitration. The Court of Appeal therefore did not accept that the parties had reached the necessary agreement to arbitrate on an ad hoc basis.
The central legal analysis concerned s 4(6) of the AA. The High Court had expressed a tentative view that s 4(6) could be used to deem the existence of an arbitration agreement, describing it as creating a legal fiction of an existing arbitration agreement through assertion and non-denial in arbitral or legal proceedings. The Court of Appeal rejected that construction. It held that s 4(6) cannot be construed to permit the creation or formation of a new arbitration agreement through the operation of its deeming effect.
In reaching this conclusion, the Court of Appeal articulated the limited purpose of s 4(6). For parties who have not denied the existence of an arbitration agreement, s 4(6) precludes them from relying on the absence of an agreement in writing to challenge the validity of the arbitration agreement for the purposes of the AA. Put differently, s 4(6) is not a mechanism to manufacture consent where none exists. It does not convert a non-existent arbitration agreement into an enforceable one. The deeming provision operates within the framework of an arbitration agreement that exists in substance, rather than supplying the missing element of agreement.
The Court of Appeal’s reasoning also implicitly underscores the policy rationale behind arbitration legislation: arbitration depends on party consent. While the AA contains provisions that facilitate arbitration and reduce technical obstacles, those provisions cannot be read to override the fundamental requirement that there must be an arbitration agreement. Accordingly, where the court finds that no arbitration agreement existed as a matter of fact, s 4(6) cannot be invoked to deem one into existence.
Finally, the Court of Appeal’s analysis addressed the relationship between the “assertion and reply” structure of s 4(6) and the factual matrix of the case. The parties’ conduct—particularly the Developer’s objections—was inconsistent with the notion that the Developer had not denied the existence of an arbitration agreement. Even if the statutory language is engaged, the Court of Appeal’s interpretive conclusion remained that the deeming effect cannot be used to create a new arbitration agreement where none exists.
What Was the Outcome?
The Court of Appeal allowed the appeal. It set aside the High Court’s decision to stay the suit in favour of arbitration. The practical effect is that the Purchasers’ High Court proceedings could not be stayed on the basis that an arbitration agreement existed either through an ad hoc agreement or through the deeming operation of s 4(6).
More broadly, the decision clarifies that s 4(6) does not operate as a substitute for party consent. It reinforces that courts must first determine whether an arbitration agreement exists as a matter of fact and law; only then can the deeming provision (within its limited scope) be considered for issues relating to the written form requirement.
Why Does This Case Matter?
This decision is significant for arbitration practitioners because it draws a clear boundary around the operation of s 4(6) of the AA. Many disputes arise where one party asserts that arbitration has been agreed, while the other party denies it or challenges formal requirements. Cheung Teck Cheong Richard establishes that s 4(6) is not a broad remedial tool that can be used to “fill the gap” where no arbitration agreement exists at all. Instead, it is a targeted provision that prevents reliance on the absence of an agreement in writing to challenge validity, assuming the arbitration agreement’s existence is otherwise not denied.
For lawyers advising clients on arbitration strategy, the case highlights the importance of correspondence and objections. Here, the Developer’s repeated objections to the proposed arbitration framework were central to the Court of Appeal’s conclusion that an ad hoc arbitration agreement was not formed and that s 4(6) could not be used to create one. Parties who wish to avoid being deemed to have accepted arbitration should ensure that they clearly deny the existence of an arbitration agreement and object to the proposed reference in a timely and consistent manner.
From a precedent perspective, the Court of Appeal’s interpretation provides guidance on how Singapore courts will construe deeming provisions in arbitration statutes. It also promotes doctrinal coherence: arbitration is grounded in consent, and statutory deeming cannot be read to override that foundational principle. The case therefore serves as a useful authority when litigating stay applications under s 6 of the AA, particularly where one party seeks to rely on s 4(6) to overcome deficiencies in the formation or documentation of an arbitration agreement.
Legislation Referenced
- Arbitration Act (Cap 10, 2002 Rev Ed) — in particular ss 4(1), 4(3), 4(4), 4(6), and s 6
- Australian Act (as referenced in the judgment’s comparative analysis)
- Singapore Arbitration Act (as referenced in the judgment’s comparative analysis)
Cases Cited
Source Documents
This article analyses [2021] SGCA 77 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.