Arbitrability: protection of minority shareholders

The vexed question of the arbitrability of shareholder disputes has recently been considered by the Singapore Court of Appeal in Tomolugen Holdings Ltd v Silica Investors Ltd [2015] SGCA 57. The Court of Appeal has rejected the complex reasoning at first instance of Quentin Loh J, in Silica Investors Ltd v Tomolugen Holdings Ltd [2014] SGHC 101, and has followed the approach of the English Court of Appeal in Fulham Football Club (1987) Ltd v Richards [2012] Ch 333.

The position is thus the same in both jurisdictions: where a shareholder dispute is subject to arbitration, the arbitrators have jurisdiction to determine that dispute even though one of the potential remedies for the claimant – the winding up of the company – can be granted only by a court and not by a tribunal. The judgment of the Singapore Court of Appeal – like many of its judgments – contains a huge amount of learning and complex legal analysis, not just on the shareholder dispute question but also on other matters of the interpretation of the court’s obligation to stay its proceedings in the face of an arbitration clause.