Section 6 of the Arbitration Act provides that a party to an arbitration agreement may apply to the court for a stay of any proceedings brought by the other party to the arbitration agreement relating to the subject matter of the agreement.

Section 11 of the International Arbitration Act provides that any dispute which the parties have agreed to submit to arbitration under an arbitration agreement may be determined by arbitration, unless it is contrary to public policy to do so.

In the main action, the claimant sought to avoid a number of payments made to the defendant on the basis that they amounted to unfair preferences or transactions at an undervalue under the Bankruptcy Act and Companies Act, and that other payments were made with the intent to defraud it as a creditor under the Conveyancing and Law of Property Act.

The defendant applied for a stay pursuant to section 6 of the Arbitration Act, which governs domestic arbitration proceedings. The claimant argued that the issues that required determination were not arbitrable, in the sense that they related to a type of dispute that could only be resolved by the courts.

The court dismissed the application for a stay of proceedings in favour of arbitration. The court noted that section 11 of the International Arbitration Act, which governs international arbitration proceedings, recognises the concept of arbitrability and provides that any dispute which the parties have agreed to submit to arbitration may be determined by arbitration unless it is contrary to public policy to do so. In contrast, the Arbitration Act does not explicitly refer to arbitrability. The court stated, however, that the concept should be taken into account when considering whether a stay should be granted.

The court found that the avoidance provisions in the Bankruptcy Act and Companies Act exist for the benefit of the general body of creditors in an insolvency-related context. Accordingly, the policy underlying the provisions would be compromised if they were subject to private arrangements, including arbitration.

The case is notable for being the first time the Singapore courts have had to consider an attempt to refer claims related to avoiding transactions made in an insolvency situation to arbitration. The decision emphasises that, while the Singapore courts are consistently pro-arbitration, there are spheres of law where the wider public interest must take precedence over the parties' agreement to arbitrate.