R1 International v Lonstroff: Anti-Suit Injunction & Arbitration Agreement in Rubber Trade

R1 International Pte Ltd, a Singaporean company, appealed against the decision to set aside an interim anti-suit injunction and dismiss its application for a permanent anti-suit injunction against Lonstroff AG, a Swiss company. The dispute arose from a contract for the supply of rubber, where R1 sought to enforce an arbitration agreement in Singapore. The Court of Appeal allowed the appeal, finding that the arbitration agreement was incorporated into the contract.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Allowed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Appeal regarding an anti-suit injunction. The court examined whether an arbitration agreement was incorporated into a rubber supply contract.

1.7 Decision Date

20 November 2014

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
R1 International Pte Ltd	Appellant	Corporation	Appeal Allowed	Won	Paul Tan of Rajah & Tann Singapore LLP Matthew Koh of Rajah & Tann Singapore LLP Mohammed Ibrahim of Achievers LLC
Lonstroff AG	Respondent	Corporation	Appeal Dismissed	Lost	Boey Swee Siang of ATMD Bird & Bird LLP Ow Sze Mun Cassandra Geraldine of ATMD Bird & Bird LLP

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	Yes
Andrew Phang Boon Leong	Justice of the Court of Appeal	No
Steven Chong	Judge	No

4. Counsels

Counsel Name	Organization
Paul Tan	Rajah & Tann Singapore LLP
Matthew Koh	Rajah & Tann Singapore LLP
Mohammed Ibrahim	Achievers LLC
Boey Swee Siang	ATMD Bird & Bird LLP
Ow Sze Mun Cassandra Geraldine	ATMD Bird & Bird LLP

4. Facts

R1 and Lonstroff engaged in five transactions for the sale and purchase of SVR between January and December 2012.
The dispute concerned the second transaction, where Lonstroff claimed the rubber emitted a foul smell.
R1 sent Lonstroff a Contract Note for each transaction, including a clause for arbitration in Singapore.
Lonstroff never countersigned the Contract Notes but accepted delivery and paid for the goods.
Lonstroff commenced proceedings against R1 in Switzerland, alleging breach of contract.
R1 sought an anti-suit injunction in Singapore to prevent the Swiss proceedings, based on the arbitration agreement.
Lonstroff attempted to introduce its own standard terms in the third, fourth, and fifth transactions.

5. Formal Citations

R1 International Pte Ltd v Lonstroff AG, Civil Appeal No 78 of 2014, [2014] SGCA 56
R1 International Pte Ltd v Lonstroff AG, , [2014] 3 SLR 166

6. Timeline

Date	Event
2012-01-01	Between January and December, Lonstroff purchased SVR from R1 pursuant to five separate transactions.
2012-01-24	Negotiations for the first transaction were concluded; R1 sent Lonstroff the first Email Confirmation.
2012-01-25	Lonstroff sent R1 its Purchase Order for the first transaction.
2012-02-01	R1 emailed Lonstroff a Contract Note for the first transaction.
2012-05-22	Lonstroff took delivery from R1 of the SVR ordered for the first transaction.
2012-05-28	R1 issued Lonstroff with invoices for the SVR sold under the first transaction.
2012-06-01	Lonstroff took delivery from R1 of the SVR ordered for the first transaction.
2012-07-16	Lonstroff made payment in respect of both invoices for the first transaction.
2012-08-15	R1 sent an Email Confirmation to Lonstroff for the second transaction.
2012-08-22	R1 issued an invoice for the second transaction.
2012-08-27	Lonstroff took delivery from R1 of the SVR ordered for the second transaction.
2012-08-31	R1 emailed Lonstroff with a Contract Note for the second transaction.
2012-09-20	Lonstroff emailed R1 to complain that a foul smell was being emitted from the SVR delivered for the second transaction.
2012-10-05	Lonstroff paid the invoice for the second transaction.
2012-10-10	Lonstroff sent R1 a Purchase Order for the third transaction.
2012-10-11	R1 sent Lonstroff an Email Confirmation for the third transaction.
2012-10-11	R1 emailed Lonstroff the Contract Note for the third transaction.
2012-10-24	Lonstroff took delivery from R1 of the SVR for the third transaction.
2012-12-07	Lonstroff paid the invoice for the third transaction.
2013-03-01	Lonstroff commenced proceedings against R1 in Switzerland.
2014-11-21	Court of Appeal allowed the appeal and granted R1 International Pte Ltd the anti-suit injunction sought.

7. Legal Issues

Incorporation of Arbitration Agreement
- Outcome: The court held that the arbitration agreement was incorporated into the contract due to the parties' conduct and industry practice.
- Category: Substantive
- Sub-Issues:
  - Acceptance by Silence
  - Course of Dealing
  - Industry Custom
- Related Cases:
  - [2014] 3 SLR 166
  - [2009] 4 SLR(R) 111
  - [2011] EWHC 589 (Admlty)
  - [1969] 2 AC 31
  - [1987] 2 Lloyd’s Rep 601
  - [2004] 4 SLR(R) 258
  - [2010] 2 Lloyd’s Rep 152
  - [2009] 1 All ER (Comm) 1035
Anti-Suit Injunction
- Outcome: The court granted the anti-suit injunction to prevent Lonstroff from continuing proceedings in Switzerland.
- Category: Procedural

8. Remedies Sought

Anti-Suit Injunction

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation
Arbitration
International Trade Disputes

11. Industries

Commodities
Rubber Industry

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
R1 International Pte Ltd v Lonstroff AG	High Court	Yes	[2014] 3 SLR 166	Singapore	The judgment under appeal. The Court of Appeal overturned the High Court's decision.
ABB Holdings Pte Ltd and others v Sher Hock Guan Charles	Court of Appeal	Yes	[2009] 4 SLR(R) 111	Singapore	Cited for the principle that the law adopts an objective approach towards questions of contractual formation and the incorporation of terms.
Tryggingarfelagio Foroyar P/F v CPT Empresas Maritimas SA M/V “Athena”	English High Court	Yes	[2011] EWHC 589 (Admlty)	England and Wales	Cited for the principle that the question of when the Second Supply Contract came into being and whether the terms of the second Contract Note had been incorporated into the Second Supply Contract turned on ascertaining the parties’ objective intentions.
Henry Kendall & Sons (a firm) v William Lillico & Sons, Ltd	House of Lords	Yes	[1969] 2 AC 31	United Kingdom	Cited for the principle that the question of when the Second Supply Contract came into being and whether the terms of the second Contract Note had been incorporated into the Second Supply Contract turned on ascertaining the parties’ objective intentions.
Pagnan SpA v Feed Products Ltd	Court of Appeal	Yes	[1987] 2 Lloyd’s Rep 601	England and Wales	Cited for the principle that it is not uncommon for parties to first agree on a set of essential terms which the parties may be bound by as a matter of law and on the basis of which they may act, even while there may be ongoing discussions on the incorporation of other usually detailed terms.
Midlink Development Pte Ltd v The Stansfield Group Pte Ltd	High Court	Yes	[2004] 4 SLR(R) 258	Singapore	Cited for the principle that although silence by one party may not by itself constitute acceptance of the terms sent by the other party, it does not follow from this that silence is fatal to a finding that the terms sent have been accepted.
Papas Olio JSC v Grains & Fourrages SA and another	English Court of Appeal	Yes	[2010] 2 Lloyd’s Rep 152	England and Wales	Cited for the principle that a failure to object might in the circumstances be found to constitute assent to the incorporation of the other party’s terms.
Statoil ASA v Louis Dreyfus Energy Services LP	English High Court	Yes	[2009] 1 All ER (Comm) 1035	England and Wales	Cited for the principle that If one party makes a proposal for terms and the other does not object to it when asked if it has objections, that can, in appropriate circumstances, be taken as acceptance of that term.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
No applicable statutes

15. Key Terms and Keywords

15.1 Key Terms

SVR
Contract Note
Email Confirmation
IRAC terms
Arbitration Agreement
Anti-Suit Injunction
Trade Custom
Course of Dealing

15.2 Keywords

arbitration
anti-suit injunction
contract law
rubber trade
Singapore
Lonstroff
R1 International

17. Areas of Law

Area Name	Relevance Score
Anti-suit injunction	95
Arbitration	90
Contract Law	80
Breach of Contract	75
International Commercial Arbitration	60
Commercial Disputes	50
International Rubber Association Contract (IRAC)	40
Commodities Trading	30

16. Subjects

Contract Law
Arbitration
International Trade
Commodities Trading