The court held that claims against non-parties to an arbitration agreement must proceed in court when intertwined with serious allegations of fraud.

[1] These appeals arise as a consequence of the decision of the High Court to grant a stay of proceedings to the respective respondents in these appeals, pending arbitration of a dispute between the appellant and one PT Anglo Slavic Utama (PT ASU).

[2] In the Court below, the appellant who is the plaintiff (Protasco) had brought a claim against the said PT ASU as the 1st defendant, Tey Por Yee (Tey) as the 2nd defendant and Ooi Kock Aun (Ooi) as the 3rd defendant.

[3] The dispute between Protasco and PT ASU was governed by an arbitration clause in the sale and purchase agreement executed? Between them, giving rise to an agreement to arbitrate in the event of any difference or dispute arising between them. As such, PT ASU was entitled to, and did obtain a stay of the Court proceedings between Protasco and itself vide an order of this Court dated 25 February 2016, pursuant to s 10 of the Arbitration Act 2005 ( AA ).

[4] Subsequent to this, Tey and Ooi filed applications for a stay of the Court proceedings on 25 March 2016 pending the disposal of the arbitration proceedings between Protasco and PT ASU. These applications were allowed by the High Court. It is this decision that comprises the subject matter of these appeals.

[5] Primarily, the basis for the learned judges decision is that the issues and factual matrix of Protascos claim against the three defendants are inter-related, inter-connected and inextricably intertwined.

[6] The crux of these appeals turns on the law governing a stay of proceedings in relation to non-parties to an arbitration agreement. In the instant case, only Protasco and PT ASU are bound by the arbitration agreement. The other two defendants are not so bound. They fall outside the scope of the agreement. Section 10 of the AA is inapplicable in their context. So, should the Court proceedings in relation to the claims made against them be stayed pending the arbitration between Protasco and PT ASU or should Protasco be allowed to proceed with the claim against the parties notwithstanding the arbitration proceedings?

[7] The answer to this question turns primarily on the factual matrix of the case coupled with a balancing of the relevant factors and interests of the parties, so as to achieve a result which is manifestly just in all the circumstances of the case. The latter aspect is governed by a consideration of the law in relation to this issue. To that end, we shall first consider the factual premise of the case in relation to the defendants prior to the law.

Factual Matrix Relating To The Claim By Protasco Against The Defendants

[8] The claim relates how Tey, in early November 2012, brought a proposal for investment to Protasco. Tey was at the time the principal of a private equity management firm known as Global Capital Limited.

[9] The proposal related to the acquisition of 76% of the total issued share capital of one PT Anglo Slavic Indonesia (PT ASI) from PT ASU. PT ASI controlled 49% of another company known as PT FAS which in turn owned and controlled PT Hase Bumou Aceh (PT Haseba). This latter entity, PT Haseba had entered into a production management partnership with PT Pertamina (Pertamina), under which it was granted rights to develop and produce oil and gas in an oilfield in Aceh, Indonesia. The proposal therefore envisaged that Protasco could control and benefit in a new venture in Aceh, Indonesia for the development and production of oil and gas from this oilfield.

[10] In late November 2012 (26 December 2012) Te