JUDGMENT

Ravinthran Paramaguru JCA:

Introduction

[1] The appellant appeals against the decision of the High Court which overturned the decision of the Senior Assistant Registrar to stay proceedings under s 10 of the Arbitration Act 2005. The principal issue in this appeal is whether the appellant may invoke the benefit of an arbitration agreement contained in a main contract to which it is not a party, merely by reference to the said main contract in a separate agreement to which it is a party.

Background Facts

[2] The dispute arises out of a contract entered into between VME Process Asia Pacific Pte Ltd ("VME"), the respondent, and Sandakan Offshore (M) Sdn Bhd ("SOM"), a subsidiary of the appellant, MTC Engineering Sdn Bhd ("MTC"). For convenience, we shall refer to the parties by their abbreviated names.

[3] VME is a company incorporated in Singapore specialising in the supply of oil and gas topside processing modules for production facilities. MTC, a Malaysian company based in Shah Alam, Selangor, provides engineering and technical consultancy services within the oil and gas sector. Its subsidiary, SOM, is similarly engaged in project development and engineering works in the same industry.

[4] On 16 January 2018, VME entered into an engineering, procurement, construction, and pre-commissioning contract with SOM for the supply of topside process modules for the MDA-MBH field development project. This contract shall hereinafter be referred to as the VME/SOM Contract. Clause 44.2 of the VME/SOM Contract provides for arbitration in Singapore in the following terms:

"Any dispute or difference of any kind whatsoever arising out of the Contract or any interpretation thereof which cannot be resolved by agreement between the Parties hereto shall be settled by binding arbitration in accordance with the rules Singapore International Arbitration Centre ("SIAC Rules"), which are deemed incorporated by reference into this cl 44. The seat of arbitration shall be in Singapore. The language to be used in the arbitral proceedings shall be English."

[5] On the same day, MTC issued a Letter of Undertaking ("LOU") in favour of VME, whereby it assumed all payment obligations under the VME/SOM Contract. Consequently, MTC's obligations to VME mirrored those of SOM under that contract. The LOU contains no arbitration clause but was attached to the VME/SOM Contract as Appendix J. Both documents are dated 16 January 2018. Clause 1.1 of the VME/SOM Contract defines "Contract" as follows:

"Contract": this contract, its appendices, schedules, exhibits and attachments expressly made an integral part of this contract for the performance or supply of any part of the Work by the Contractor.

[6] Clause 1.11 of the VME/SOM Contract further stipulates that the appendices referred to in cl 1.1 shall be read and construed as integral components of the contract.

[7] In June of 2022, VME commenced proceedings against MTC, seeking to recover USD 25,000,000.00 in respect of two unpaid invoices owed by SOM. The claim was founded upon the LOU. On 13 July 2022, MTC applied for a stay of proceedings under s 10(1) of the Arbitration Act 2005. The Senior Assistant Registrar granted the stay, but the learned High Court Judge subsequently set it aside, prompting the present appeal.

Issues in the appeal

[8] In the High Court and before us, counsel for MTC contended that the arbitration clause contained in the main VME/SOM Contract was incorporated by reference into the LOU, as the main VME/SOM Contract designated the LOU as an integral part of it. The learned Judge, however, held that there was no express reference in the LOU to the arbitration clause and therefore no incorporation by reference occurred. His Lordship further observed that MTC was not a party to the VME/SOM Contract, which existed solely between VME and SOM.

[9] The instant claim by VME is not based on the VME/SOM Contract. It is based on the LOU issued by MTC. Thus, the main issue before this Court is whether the