BXH v BXI: Setting Aside Arbitral Award - Existence & Validity of Arbitration Agreement

In BXH v BXI, the Singapore High Court addressed an application by BXH to set aside an arbitral award issued in favor of BXI. The primary legal issue was whether the arbitral tribunal had jurisdiction, considering the complex series of assignments and novations of contracts, including a Distributor Agreement, between BXH, BXI, and a Parent Company. BXH argued the arbitration agreement was invalid due to the Distributor Agreement's expiry and inconsistencies within the contractual framework. The court dismissed BXH's application, finding the tribunal had jurisdiction and the composition of the tribunal was in accordance with the agreement.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court dismisses application to set aside arbitral award. Key issue: jurisdiction based on assignment/novation of arbitration agreement.

1.7 Decision Date

2 September 2019

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
BXH	Plaintiff	Corporation	Application dismissed	Lost	Khoo Boo Teck Randolph of Drew & Napier LLC Liu Chenghan Aloysius of Drew & Napier LLC
BXI	Defendant	Corporation	Application dismissed	Won	Toh Chen Han of MPillay Chan Yong Neng of MPillay Rakesh Nelson of MPillay

3. Judges

Judge Name	Title	Delivered Judgment
Vinodh Coomaraswamy	Judge	Yes

4. Counsels

Counsel Name	Organization
Khoo Boo Teck Randolph	Drew & Napier LLC
Liu Chenghan Aloysius	Drew & Napier LLC
Toh Chen Han	MPillay
Chan Yong Neng	MPillay
Rakesh Nelson	MPillay

4. Facts

BXH and BXI are Hong Kong companies; BXH distributes BXI's consumer goods in Russia.
BXI lodged a notice of arbitration with the SIAC, alleging BXH owed US$36.4m for unpaid invoices.
BXH rejected the tribunal's jurisdiction, arguing the contract with the arbitration agreement was between BXH and the Parent Company.
BXI claimed its rights via assignments and novations from the Parent Company.
The Distributor Agreement contained an arbitration clause.
The Transition Agreement aimed to transfer the Parent Company’s assets and liabilities to BXI.
The Assignment and Novation Agreement novated the Parent Company’s legal relationship with BXH to BXI.

5. Formal Citations

BXH v BXI, Originating Summons No 1224 of 2017, [2019] SGHC 141

6. Timeline

Date	Event
2010-12-24	Distributor Agreement signed
2013-01-14	Transition Agreement signed
2013-01-25	Assignment and Novation Agreement signed
2013-10-02	Participation Agreement signed
2013-11-15	Gold Plan Agreement signed
2014-12-12	Debt Transfer Agreement signed
2014-12-01	Open Debt Agreement signed
2015-04-23	Buy Back Agreement signed
2015-10-01	Notice of Arbitration filed
2016-04-22	Tribunal constituted
2017-05-01	Evidential hearing held
2017-07-01	Final award issued
2017-10-28	Originating Summons filed
2018-06-28	Hearing commenced
2019-09-03	Judgment issued

7. Legal Issues

Jurisdiction of Arbitral Tribunal
- Outcome: The court held that the tribunal had jurisdiction to determine the dispute.
- Category: Jurisdictional
- Sub-Issues:
  - Existence of arbitration agreement
  - Assignment and novation of arbitration agreement
  - Invalidity of arbitration agreement
  - Inconsistency between arbitration agreement and jurisdiction clause
- Related Cases:
  - [2007] 4 All ER 951
  - [2017] 3 SLR 357
  - [2018] SGHC 126
  - [2015] 2 SLR 972
  - [2012] 4 SLR 201
  - (1993) 66 BLR 120
  - [1990] 2 Lloyd’s Rep 11
  - [2014] 1 SLR 372
  - [2019] 3 SLR 12
  - [2013] 4 SLR 193
  - [2008] 3 SLR(R) 1029
  - [2010] 3 SLR 48
  - [1968] 1 QB 607
  - [2009] 2 SLR(R) 769
  - [2003] 2 Lloyd’s Rep 430
  - [1997] 3 SLR(R) 829
  - [2001] SGHC 243
  - [2013] 1 All ER 1061
  - [2009] 3 SLR(R) 936
  - [1991] 2 Lloyd’s Rep 127
  - [2006] Lloyd’s Rep IR 683
  - [2009] SGHCR 13
  - [2015] 1 SLR 114
  - 10 F Supp 678 (SDNY, 1934)
Composition of Arbitral Tribunal
- Outcome: The court held that the composition of the tribunal was in accordance with the parties' agreement.
- Category: Procedural
- Sub-Issues:
  - Compliance with arbitration agreement
  - Procedural equality and impartiality
- Related Cases:
  - [2015] 1 SLR 114
  - 10 F Supp 678 (SDNY, 1934)

8. Remedies Sought

Setting aside of arbitral award

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Arbitration
International Arbitration
Commercial Litigation

11. Industries

Consumer Goods
Distribution

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Fiona Trust & Holding Corp v Privalov	House of Lords	Yes	[2007] 4 All ER 951	England and Wales	Cited for the principle of separability of arbitration agreements.
BCY v BCZ	High Court	No	[2017] 3 SLR 357	Singapore	Cited to clarify that separability does not insulate the arbitration agreement from the substantive contract for all purposes.
Nippon Catalyst Pte Ltd v PT Trans-Pacific Petrochemical Indotama and another	High Court	Yes	[2018] SGHC 126	Singapore	Cited for the principle that parties generally intend dispute resolution clauses to survive the substantive contract ceasing to have contractual force.
AQZ v ARA	High Court	Yes	[2015] 2 SLR 972	Singapore	Cited to support that an arbitration agreement in an oral contract satisfies the requirement of being 'in writing' under s 2A(3) of the IAA if its content is recorded.
OMG Holdings Pte Ltd v Pos Ad Sdn Bhd	High Court	No	[2012] 4 SLR 201	Singapore	Cited regarding contractual estoppel and recitals in agreements.
NBP Developments Ltd and anor v Buildko & Sons Ltd	Unknown	No	(1993) 66 BLR 120	England and Wales	Cited for the principle that an absolute assignment means the assignor no longer retains any right to arbitrate.
Montedipe SpA v JTP-RO Jugotanker (The Jordan Nicolov)	High Court	No	[1990] 2 Lloyd’s Rep 11	England and Wales	Cited for the principle that an award cannot be given to a person who has no cause of action against the respondent.
PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v Astro Nusantara International BV	Court of Appeal	Yes	[2014] 1 SLR 372	Singapore	Cited to distinguish between the existence and scope of an arbitration agreement.
Kingdom of Lesotho v Swissbourgh Diamond Mines (Pty) Ltd and ors	Court of Appeal	Yes	[2019] 3 SLR 12	Singapore	Cited to distinguish between the existence and scope of an arbitration agreement.
Sembcorp Marine Ltd v PPL Holdings Pte Ltd and another and another appeal	Court of Appeal	Yes	[2013] 4 SLR 193	Singapore	Cited for the contextual approach to contractual construction.
Zurich Insurance (Singapore) Pte Ltd v B-Gold Interior Design & Construction Pte Ltd	Court of Appeal	Yes	[2008] 3 SLR(R) 1029	Singapore	Cited for the contextual approach to contractual construction.
Cooperatieve Centrale Raiffeisen-Boerenleenbank BA (trading as Rabobank International), Singapore Branch v Motorola Electronics Pte Ltd	Court of Appeal	Yes	[2010] 3 SLR 48	Singapore	Cited for the requirements of a valid notice of assignment.
Van Lynn Developments v Pelias Construction Co Ltd (formerly Jason Construction Co Ltd)	Court of Appeal	Yes	[1968] 1 QB 607	England and Wales	Cited for the requirements of a valid notice of assignment.
Lanxess Pte Ltd v APP Chemicals International (Mau) Ltd	High Court	Yes	[2009] 2 SLR(R) 769	Singapore	Cited for the requirements of a valid notice of assignment.
Internaut Shipping GmbH and anor v Fercometal SARL (The “Elikon”)	Unknown	No	[2003] 2 Lloyd’s Rep 430	England and Wales	Cited regarding the identity of parties to an arbitration.
The Jarguh Sawit	Court of Appeal	Yes	[1997] 3 SLR(R) 829	Singapore	Cited regarding the assignment of a cause of action.
AL Stainless Industries Pte Ltd v Wei Sin Construction Pte Ltd	High Court	No	[2001] SGHC 243	Singapore	Cited regarding inconsistent clauses in a contract.
Société Générale, London Branch v Geys	Unknown	Yes	[2013] 1 All ER 1061	England and Wales	Cited regarding inconsistent clauses in a contract.
Insigma Technology v Alstom Technology	Court of Appeal	Yes	[2009] 3 SLR(R) 936	Singapore	Cited regarding the court's duty to give effect to the parties' intention to arbitrate.
Paul Smith Ltd v H&S International Holding Inc	Unknown	Yes	[1991] 2 Lloyd’s Rep 127	England and Wales	Cited regarding the construction of jurisdiction and arbitration clauses.
Axa Re v Ace Global Markets Ltd	Unknown	Yes	[2006] Lloyd’s Rep IR 683	England and Wales	Cited regarding the construction of jurisdiction and arbitration clauses.
PT Tri-MG Intra Asia Airlines v Norse Air Charter Limited	High Court	Yes	[2009] SGHCR 13	Singapore	Cited regarding the construction of jurisdiction and arbitration clauses.
Triulzi Cesare SRL v Xinyi Group (Glass) Co Ltd	High Court	Yes	[2015] 1 SLR 114	Singapore	Cited regarding the court's discretion to set aside an award.
Re Utility Oil Corporation	District Court	No	10 F Supp 678 (SDNY, 1934)	United States	Cited regarding the appointment of arbitrators.

13. Applicable Rules

Rule Name
SIAC Rules

14. Applicable Statutes

Statute Name	Jurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)	Singapore
Civil Law Act (Cap 43, 1999 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Arbitration agreement
Assignment
Novation
Jurisdiction
UNCITRAL Model Law
Distributor Agreement
SIAC Rules
Buy Back Agreement
Debt Transfer Agreement
Open Debt Agreement
Participation Agreement
Gold Plan Agreement

15.2 Keywords

arbitration
assignment
novation
jurisdiction
Singapore
contract law

17. Areas of Law

Area Name	Relevance Score
Arbitration	90
Setting Aside Arbitral Award	85
Contract Law	80
Assignment and novation of arbitration agreement	80
Breach of Contract	75
Existence of arbitration agreement	75
Inconsistency between arbitration agreement and jurisdiction clause	70
Recourse against award	70
Invalidity of arbitration agreement	65
Estoppel	60
Composition of tribunal not in accordance with agreement	60
Contractual estoppel	55
Estoppel by Convention	50
International Commercial Law	50
Implied contract	45

16. Subjects

Arbitration
Contract Law
International Trade