Navigator Investment Services Ltd v Acclaim Insurance Brokers: Arbitration Stay & Pre-Action Discovery

Navigator Investment Services Ltd appealed against the High Court's decision to refuse a stay of Acclaim Insurance Brokers Pte Ltd's application for pre-action discovery and interrogatories. The Court of Appeal held that the International Arbitration Act (IAA) applied due to the arbitration clause referencing the Singapore International Arbitration Centre (SIAC) Rules. However, the court dismissed the stay application because a substantive claim had not yet crystallized, emphasizing the need to balance the promotion of arbitration with ensuring access to justice. The court allowed the appeal against the decision in Summons 5059 but dismissed the appeal against the decision in Registrar’s Appeal 383.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal against the decision in Summons 5059 allowed, but appeal against the decision in Registrar’s Appeal 383 dismissed.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding stay of pre-action discovery. Court held IAA applies; stay denied as substantive claim not crystallized, balancing arbitration & justice.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Navigator Investment Services LtdAppellantCorporationAppeal against the decision in Summons 5059 allowed, Appeal against the decision in Registrar’s Appeal 383 dismissedPartial, LostKronenburg Edmund Jerome, Jacqueline Teo Lin, Loh Hui-Qi Vicki
Acclaim Insurance Brokers Pte LtdRespondentCorporationAppeal against the decision in Summons 5059 lost, Appeal against the decision in Registrar’s Appeal 383 wonPartial, PartialOommen Mathew, John Thomas

3. Judges

Judge NameTitleDelivered Judgment
Chao Hick TinJustice of the Court of AppealNo
Andrew Phang Boon LeongJustice of the Court of AppealYes

4. Counsels

Counsel NameOrganization
Kronenburg Edmund JeromeTan Peng Chin LLC
Jacqueline Teo LinTan Peng Chin LLC
Loh Hui-Qi VickiTan Peng Chin LLC
Oommen MathewHaq and Selvam
John ThomasDavid Nayar and Vardan

4. Facts

  1. Navigator and Acclaim entered into a Distributorship Agreement in 2004.
  2. The Distributorship Agreement contained an arbitration clause referencing SIAC rules.
  3. Acclaim sought pre-action discovery from Navigator regarding the transfer of funds.
  4. Navigator applied for a stay of the pre-action discovery application in favor of arbitration.
  5. The High Court refused to grant the stay.
  6. The arbitration clause stated that any arbitration would be resolved in accordance with the Arbitration Rules of the SIAC for the time being in force.
  7. Acclaim filed Originating Summons No 1830 of 2007 to seek pre-action discovery of certain documents as well as pre-action interrogatories of certain information from Navigator.

5. Formal Citations

  1. Navigator Investment Services Ltd v Acclaim Insurance Brokers Pte Ltd, CA 5/2009, [2009] SGCA 45

6. Timeline

DateEvent
Distributorship Agreement signed between Navigator and Acclaim.
Acclaim entered into a Financial Adviser Manager Agreement with Edward Wong Leong Wei.
Wong and his FARs went on a staff retreat to Phuket, Thailand.
Wong allegedly instructed his FARs to sign pre-prepared letters of resignation backdated to 2007-06-14.
$26 million worth of Funds Under Administration transferred from Acclaim’s account with Navigator to Leadenhall.
Wong’s services with Acclaim were terminated.
Wong forwarded the resignation letters of the FARs to Acclaim and demanded unpaid commissions.
Wong and Stralos commenced Suit No 781 of 2007 against Acclaim.
Acclaim filed Originating Summons No 1830 of 2007 to seek pre-action discovery from Navigator.
Acclaim filed its Defence and Counterclaim in Suit 781.
Navigator commenced Originating Summons No 53 of 2008 against Acclaim.
Navigator filed Summons No 130 of 2008 to stay OS 1830 in favour of arbitration.
Navigator filed Summons No 148 of 2008 to restrain Acclaim from commencing any action.
Summons 148 was heard; court ordered sealing of court files.
OS 53 was heard; interim order and undertakings ordered to stand until disposal of OS 1830.
Navigator commenced Arbitration No 21 of 2008 at the SIAC.
Assistant registrar dismissed SUM 130.
Navigator filed Summons No 5059 of 2008 to amend SUM 130 to seek a stay of OS 1830 under s 6 of the IAA.
Judgment reserved.

7. Legal Issues

  1. Stay of Proceedings
    • Outcome: The court held that the IAA was applicable but dismissed the stay application because a substantive claim had not yet crystallized.
    • Category: Procedural
    • Sub-Issues:
      • Applicability of Arbitration Act versus International Arbitration Act
      • Interpretation of 'appearance' in Section 6 of the IAA
  2. Pre-Action Discovery
    • Outcome: The court held that applications for pre-action discovery and/or pre-action interrogatories ought to be available to a party notwithstanding the provisions of s 6 of the IAA.
    • Category: Procedural
    • Sub-Issues:
      • Availability of pre-action discovery in the context of an arbitration agreement
      • Balancing the need for discovery with the policy of promoting arbitration
  3. Applicability of International Arbitration Act
    • Outcome: The court held that the parties had agreed that the IAA was to apply.
    • Category: Substantive
    • Sub-Issues:
      • Interpretation of arbitration clause referencing SIAC rules
      • Whether adoption of SIAC rules constitutes agreement to apply IAA

8. Remedies Sought

  1. Stay of proceedings
  2. Pre-action discovery of documents
  3. Pre-action interrogatories

9. Cause of Actions

  • Breach of Contract
  • Conspiracy to injure
  • Breach of fiduciary duties

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Financial Services
  • Insurance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Acclaim Insurance Brokers Pte Ltd v Navigator Investment Services LtdHigh CourtYes[2009] SGHC 12SingaporeThe judgment under appeal; the Court of Appeal is reviewing the High Court's decision to refuse a stay of pre-action discovery.
Jurong Town Corp v Wishing Star LtdCourt of AppealYes[2004] 2 SLR 427SingaporeCited for the principle that the court has discretion to admit documents for the purposes of an appeal when no trial or hearing on the merits has taken place.
NCC International AB v Alliance Concrete Singapore Pte LtdCourt of AppealYes[2008] 2 SLR 565SingaporeCited for the principle that parties can expressly opt to have the IAA apply by adopting institutional rules which expressly stipulate that the IAA shall apply, such as Rule 32 of the SIAC Rules 2007.
Sembawang Engineers and Constructors Pte Ltd v Covec (Singapore) Pte LtdHigh CourtYes[2008] SGHC 229SingaporeCited for the principle that an agreement for the application of the IAA as the law of the arbitration through the adoption of the SIAC Rules 2007 is sufficient to make s 5(1) of the IAA operative.
Black & Veatch Singapore Pte Ltd v Jurong Engineering LtdCourt of AppealYes[2004] 4 SLR 19SingaporeCited for the principle that the rules for the time being are applicable where the contract provides that disputes are to be decided in accordance with the rules of a particular tribunal.
Carona Holdings Pte Ltd v Go Go Delicacy Pte LtdCourt of AppealYes[2008] 4 SLR 460SingaporeCited as an example of a case considering whether it is too late for an applicant to apply for a stay pursuant to s 6 of the IAA because it has taken a step in the proceedings.
Woh Hup (Pte) Ltd v Lian Teck Construction Pte LtdCourt of AppealYes[2005] SGCA 26SingaporeCited for the principle that the court has the power to grant an application for pre-action discovery, notwithstanding the fact that the respondent concerned was a party to an arbitration agreement, but that such power should be exercised cautiously to prevent abuse of process.
Eagle Star Insurance Co Ltd v Yuval Insurance Co LtdEnglish Court of AppealYes[1978] 1 Lloyd’s Rep 357England and WalesCited for the principle that courts welcome arbitrations in commercial disputes and do not lightly interfere with their awards.
Tjong Very Sumito v Antig Investments Pte LtdCourt of AppealYes[2009] SGCA 41SingaporeCited for the principle that an unequivocal judicial policy of facilitating and promoting arbitration has firmly taken root in Singapore.
Lian Teck Construction Pte Ltd v Woh Hup (Pte) LtdHigh CourtYes[2005] 1 SLR 266SingaporeCited for the argument that the court does not have the power, under s 18 of the Supreme Court of Judicature Act, read together with para 12 of the First Schedule thereof, to grant pre-arbitral discovery.
Ali Shipping Corporation v Shipyard TrogirEnglish Court of AppealYes[1999] 1 WLR 314England and WalesCited for the principle that one established exception to the duty of confidentiality in arbitration is where it is reasonably necessary to protect the legitimate interests of a party to the arbitration.
United Overseas Bank Ltd v Ng Huat Foundations Pte LtdHigh CourtYes[2005] 2 SLR 425SingaporeCited for the principle that court procedures aim at achieving both procedural as well as substantive justice.

13. Applicable Rules

Rule Name
SIAC Rules (3rd Ed, 1 July 2007)
Rules of Court (Cap 322, R 5, 2006 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Arbitration Act (Cap 10, 2002 Rev Ed)Singapore
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore
Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Stay of proceedings
  • Pre-action discovery
  • International Arbitration Act
  • Singapore International Arbitration Centre
  • SIAC Rules
  • Appearance
  • Distributorship Agreement
  • Funds Under Administration

15.2 Keywords

  • arbitration
  • stay of proceedings
  • pre-action discovery
  • international arbitration act
  • SIAC
  • Singapore

16. Subjects

  • Arbitration
  • Civil Procedure
  • Commercial Law

17. Areas of Law

  • Arbitration Law
  • Civil Procedure
  • Contract Law