Jiang Haiying v Tan Lim Hui: Stay of Proceedings for Non-Parties to Arbitration Clause

In Jiang Haiying v Tan Lim Hui, the Singapore High Court addressed two appeals regarding the Assistant Registrar's decision to refuse a stay of proceedings in favor of arbitration. Jiang Haiying, the plaintiff, sued Tan Lim Hui and Sim Poh Ping, the defendants, over a dispute involving shares of Dehai Marine Shipping (Singapore) Pte Ltd. The defendants sought a stay of proceedings based on an arbitration clause in a sale and purchase agreement (SPA) to which they were not parties. The High Court dismissed the appeals, holding that non-parties to an arbitration agreement cannot compel arbitration.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeals dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court addressed whether non-parties to an arbitration clause could seek a stay of court proceedings in favor of arbitration. The court dismissed the appeal.

1.7 Decision Date

18 February 2009

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Jiang Haiying	Plaintiff	Individual	Appeal Dismissed	Lost	N Sreenivasan of Straits Law Practice LLC Collin Choo of Straits Law Practice LLC
Tan Lim Hui	Defendant, Appellant	Individual	Appeal Dismissed	Lost	Wendell Wong of Drew & Napier LLC Sophine Chin of Drew & Napier LLC
Sim Poh Ping	Defendant, Appellant	Individual	Appeal Dismissed	Lost	Wendell Wong of Drew & Napier LLC Sophine Chin of Drew & Napier LLC

3. Judges

Judge Name	Title	Delivered Judgment
Andrew Ang	Judge	Yes

4. Counsels

Counsel Name	Organization
N Sreenivasan	Straits Law Practice LLC
Collin Choo	Straits Law Practice LLC
Wendell Wong	Drew & Napier LLC
Sophine Chin	Drew & Napier LLC

4. Facts

Plaintiff transferred shares in Dehai Singapore to defendants.
Defendants allegedly held shares in trust for the plaintiff.
SPP sold shares to SPH without plaintiff's consent.
Plaintiff, Tan, and SPH transferred shares to Vita as part of a listing process.
Plaintiff entered into a sale and purchase agreement (SPA) to sell Kingley shares.
Plaintiff claimed the share distribution was inequitable.
Defendants sought a stay of proceedings based on the arbitration clause in the SPA.

5. Formal Citations

Jiang Haiying v Tan Lim Hui, Suit 531/2007, 530/2007, RA 74/2008, 75/2008, [2009] SGHC 42

6. Timeline

Date	Event
2001-08-01	Plaintiff transferred shares in Dehai Singapore to Tan and SPP.
2001-11-19	Tan and SPP acknowledged holding Dehai Singapore shares under their names for the plaintiff.
2003-03-01	SPP sold Dehai Singapore shares to SPH.
2004-06-30	Plaintiff, Tan, and SPH transferred Dehai Singapore shares to Vita.
2004-11-30	Vita shares held by Kingley were subdivided.
2006-03-31	Plaintiff entered into a sale and purchase agreement (SPA) to sell Kingley shares to SPH and others.
2007-01-01	Plaintiff commenced three actions, including Suit 530/2007 and Suit 531/2007.
2008-01-01	Registrar's Appeal No 74 of 2008 and Registrar's Appeal No 75 of 2008 were brought by the appellants/defendants.
2009-02-19	High Court dismissed the appeals.

7. Legal Issues

Stay of Court Proceedings
- Outcome: The court disallowed the application for a stay of proceedings in favor of arbitration.
- Category: Procedural
- Sub-Issues:
  - Application of equitable estoppel
  - Intended beneficiaries of the SPA
  - Collateral contract
  - Risk of inconsistent results
- Related Cases:
  - [2008] 1 SLR 161
  - [2008] 4 SLR 460
  - [2003] 3 SLR 130
  - [1999] 1 Lloyd’s Rep 225
  - 10 F.3d 753 (11th Cir. 1993)
  - 271 F 3d 403 (2nd Cir. 2001)
  - [1999] 4 MLJ 545
  - 910 So. 2d 1247; 2005 Ala. Lexis 55
  - [2002] 4 SLR 439
  - [1951] 2 KB 854
  - [1975] AC 154
  - 372 F.3d 339; (5th Cir. 2004
Privity of Contract
- Outcome: The court affirmed the principle that non-parties to an arbitration agreement cannot participate in arbitration conducted pursuant to the agreement.
- Category: Substantive

8. Remedies Sought

Declaration of Trust
Monetary Damages

9. Cause of Actions

Breach of Trust
Conversion

10. Practice Areas

Arbitration
Commercial Litigation

11. Industries

Shipping

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Go Go Delicacy Pte Ltd v Carona Holdings Pte Ltd	High Court	Yes	[2008] 1 SLR 161	Singapore	Cited for the principle that a court cannot compel non-parties to an agreement containing an arbitration clause to arbitrate their dispute.
Carona Holdings Pte Ltd v Go Go Delicacy Pte Ltd	Court of Appeal	Yes	[2008] 4 SLR 460	Singapore	Cited for approving the High Court's statement that entities cannot be compelled to arbitrate pursuant to an arbitration agreement to which they were not parties.
Kiyue Co Ltd v Aquagen International Pte Ltd	High Court	Yes	[2003] 3 SLR 130	Singapore	Cited to support the principle that only parties to an arbitration agreement may participate in it.
The Smaro	English Court	Yes	[1999] 1 Lloyd’s Rep 225	England	Cited as authority for the operation of estoppel in an arbitration context.
Sunkist Soft Drinks, Inc. v Sunkist Growers, Inc.	United States Court of Appeal for the Eleventh Circuit	Yes	10 F.3d 753 (11th Cir. 1993)	United States	Cited as authority for the expansion of the equitable estoppel doctrine.
Choctaw Generation Limited Partnership v American Home Assurance Company	United States Court of Appeal for the Second Circuit	Yes	271 F 3d 403 (2nd Cir. 2001)	United States	Cited as authority for the expansion of the equitable estoppel doctrine.
Bauer (M) Sdn Bhd v Daewoo Corp	Malaysian Court	Yes	[1999] 4 MLJ 545	Malaysia	Cited as authority for the proposition that third party beneficiaries can pursue claims against a promissor in arbitration.
Wesley Locke v Ozark City Board of Education	Supreme Court of Alabama	Yes	910 So. 2d 1247; 2005 Ala. Lexis 55	United States	Cited as authority for the proposition that third party beneficiaries can pursue claims against a promissor in arbitration.
Lemon Grass Pte Ltd v Peranakan Place Complex Pte Ltd	High Court	Yes	[2002] 4 SLR 439	Singapore	Cited for the nature and legal requirements of a collateral contract.
Shanklin Pier Ld v Detel Products Ld	English Court	Yes	[1951] 2 KB 854	England	Cited as a case in which a collateral contract was successfully pleaded.
New Zealand Shipping Co Ltd v A M Satterthwaite & Co Ltd	Privy Council	Yes	[1975] AC 154	England	Cited as an example of a collateral contract.
Waste Management, Inc. v Residuos Industriales Multiquim, S.A. de C.V.	United States Court of Appeals for the Fifth Circuit	Yes	372 F.3d 339; (5th Cir. 2004	United States	Cited as authority for the argument that not allowing the application could result in inconsistent rulings.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed)	Singapore
International Arbitration Act (Cap. 143A)	Singapore
Contracts (Rights of Third Parties) Act (Cap 53B, 2002 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Arbitration Clause
Stay of Proceedings
Privity Rule
Equitable Estoppel
Sale and Purchase Agreement
Trust
Dehai Singapore Shares
Kingley Shares

15.2 Keywords

arbitration
stay of proceedings
non-parties
arbitration clause
contract law
trust
shares

17. Areas of Law

Area Name	Relevance Score
Arbitration	90
Contract Law	60
Estoppel	50
Breach of Contract	40
Trust Law	40
Company Law	30

16. Subjects

Arbitration
Contract Law
Trust Law
Civil Procedure