The Termination and Settlement Agreement (TSA) does not incorporate the arbitration clause from the Main Agreements, indicating the parties' intention to resolve disputes through litigation instead.

Lee Swee Seng JCA:

[1] This appeal raises interesting and intriguing questions on whether an arbitration agreement, said to have a life of its own under the doctrine of reparability, would still be applicable when two main agreements ("Main Agreements") that contain the arbitration agreement are followed by a Termination and Settlement Agreement ("TSA") which has no express reference to the arbitration agreement. Instead, it has the expression in cl 6 thereof of a party beat liberty "to take legal action to claim" the amount spelt out in the TSA. There was also a reference in the same Clause to recovering "court fee" from the party liable to pay under the TSA.

[2] The issue of whether the arbitration agreement in the Main Agreements had been incorporated by reference into the TSA such as to make that arbitration clause part of the TSA would have to be considered. In this case, the reference to the Main Agreements was merely in the recital to the TSA.

[3] Ancillary to that would be whether the Main Agreements had been superseded by the TSA such that the latter is a stand-alone entire agreement. Would references "to take legal action to claim" amount to agreed to be outstanding and "court fee" indicate a departure of the parties to forgo arbitration in favour of court proceedings?

At The High court

[4] When the plaintiff, Gise Kam Kwan International Trade Ltd ("Gise International") commenced a court action to recover the amount outstanding under the TSA, the defendant, Antara Steel Mills Sdn Bhd ("Antara Steel") duly filed its s 10 Arbitration Act 2005 [Act 646] (" AA 2005") for stay of the court proceedings and for a reference of the dispute to arbitration.

[5] The High court was conscious of the fact that there was no express arbitration agreement in the TSA but was satisfied that there was a reference to the Main Agreements that did contain an arbitration clause such that the arbitration clause had been incorporated into the TSA.

[6] The High court was further fortified in its conclusion having regard to the fact that the TSA does not contain a clause on the specific mode of dispute resolution (para 31 of the GOJ) and that "legal action" in cl 6 of the TSA includes arbitration proceedings. Further, there was no indication from the TSA that the parties wanted to resolve their disputes other than through arbitration (para 3 of the GOJ).

[7] The High court also considered the link between the TSA and the 2013 Main Agreement and that as the arbitration clause is present in both the Main Agreements of 2009 and 2013, parties must have intended, in the absence of clear agreement to the contrary, to want to resolve their disputes via arbitration, as a one-stop centre for all adjudications.

[8] Having concluded that there was a valid and enforceable arbitration agreement which is not null and void, inoperative, or incapable of being performed and the defendant not having taken any other steps in the proceedings, the High court granted a stay of the court proceedings under s 10 AA 2005 pending reference to arbitration.

[9] The plaintiff, a company incorporated in China, being dissatisfied with the decision of the High court, had appealed to the court of Appeal.

Before The court of Appeal

[10] The issues before the court of Appeal may be stated as follows:

(i) Whether the arbitration agreement in the Main Agreements had been incorporated by reference such as to make that arbitration clause part of the TSA;

(ii) Whether the TSA is a stand-alone entire agreement independent of the Main Agreements and superseding the Main Agreements;

(iii) Whether the references to "take legal action to claim the amount" and "court fee" indicate a clear intention of the parties to resolve all disputes arising from the TSA via court proceedings;

(iv) Whether the doctrine of separability and kompetenz-kompetenz apply such that matter is to be referred to arbitration.

Whether The Arbitration Agreement In The Main Agreements Had Been Incorporated By Reference Such