Answer ... Consolidation of proceedings is permissible when the parties agree or when the rules of arbitration chosen by the parties permit consolidation (eg, Rule 8 of the Singapore International Arbitration Centre (SIAC) Arbitration Rules 2016).

The Arbitration Act specifically permits consolidation of proceedings on such terms as have been agreed by the parties; the parties may also agree upon concurrent hearings (Section 26(1) of the Arbitration Act). Unless the parties have agreed to confer the power on the tribunal to order consolidation or concurrent hearings, the tribunal has no such power (Section 26(2) of the Arbitration Act).

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Answer ... The Arbitration Act and the International Arbitration Act are silent on the issue of joinder of parties. However, a joinder of parties may be ordered where:

• the party sought to be joined is found to be a contracting party to the arbitration agreement; or
• the parties to the arbitration agreement have consented to extend the agreement to a person which was not a party to the agreement, but which consents to be bound by it, with such consent forming an agreement to arbitrate (The ‘Titan Unity’ [2014] SGHCR 4; A co v D [2018] SGHCR 9).

The Court of Appeal has observed that any forced joinder would impinge upon party autonomy and confidentiality (PT First Media TBK v Astro Nusantara International BV [2014] 1 SLR 372). Joinder of parties may also be permissible under the applicable rules of arbitration agreed upon by the parties (eg, Rule 7 of the SIAC Arbitration Rules 2016).

For more information about this answer please contact: Alvin Yeo and Koh Swee Yen from WongPartnership LLP

Answer ... The general rule is that third parties are not bound by an arbitration agreement. In Manuchar Steel Hong Kong Ltd v Star Pacific Line Pte Ltd [2014] 4 SLR 832, the Singapore High Court held that to permit enforcement of arbitral awards against a non-party to the arbitration agreement (which was also a non-party to the arbitration) would be anathema to the “internal logic of the consensual basis of an agreement to arbitrate” as stated by the Singapore Court of Appeal in PT First Media TBK v Astro Nusantara International BV [2014] 1 SLR 372. However, this general rule is subject to some exceptions.

For example, Section 9 of the Contracts (Rights of Third Parties) Act, read with Section 2 of the same act, provides that an arbitration agreement binds third parties if:

• the underlying contract expressly provides that the third party may enforce the terms of the contract in its own right; or
• the underlying contract purports to confer a benefit on the third party.

If, on a proper construction of the underlying contract, it appears that the parties did not intend the underlying contract to be enforceable by a third party, then the arbitration agreement will not bind that third party.

There are several other situations in which other non-signatory third parties may be bound by an arbitration agreement. Such situations may arise:

• by way of incorporation by reference of the arbitration;
• where the arbitration agreement was entered into by an agent;
• where the corporate veil is pierced on the basis of the alter ego principle; or
• where the claims alleged by the non-signatory against a party to the contract containing the arbitration clause are so intertwined with that contract that the doctrine of equitable estoppel applies to prevent the party to the contract from denying the non-signatory’s right to participate in the arbitration (Jiang Haiying v Tan Lim Hui and Another Suit [2009] 3 SLR(R) 13)

In general, arbitration agreements are capable of being assigned. However, the effect of the assignment – in particular, whether the assignee is entitled to invoke the arbitration agreement, whether the assignee is obliged to perform the arbitration agreement or both – is a matter that has not been finally decided by the Singapore courts. Under the applicable common law principles pertaining to assignments, assignments are legally capable of transferring rights, but not obligations; and it is an open question whether the assignment of an arbitration agreement transfers only the right to invoke the arbitration agreement, but not the obligation to perform the arbitration agreement (Rals International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpA [2016] 5 SLR 455). Pending clarification from the Singapore courts, parties to an assignment wishing for the assignee to be bound by the arbitration agreement in the underlying contract would be well advised either to expressly provide for this in the terms of the assignment or to enter into an agreement to novate the arbitration agreement.

For more information about this answer please contact: Alvin Yeo and Koh Swee Yen from WongPartnership LLP