Silverlink Resorts v MS First Capital: Scope of Arbitration Agreement & Stay of Proceedings
Silverlink Resorts Limited, the plaintiff, sought a declaration against MS First Capital Insurance Limited, the defendant, regarding a claim under an Industrial All Risks Policy. The defendant applied for a stay of proceedings in favor of arbitration, which was dismissed by the Assistant Registrar. Chua Lee Ming J of the High Court of Singapore heard and dismissed the defendant's appeal, holding that the jurisdiction clause in the insurance policy carved out disputes regarding the interpretation or application of the policy from the scope of the arbitration clause. The court determined that the dispute, concerning whether a claim under Section I of the policy was necessary for a claim under Section II, fell within the jurisdiction clause, thus arbitration was not required.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Appeal Dismissed
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court addresses whether an arbitration clause or jurisdiction clause applies to a dispute over policy interpretation, concerning a COVID-19 related claim.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Silverlink Resorts Limited | Plaintiff, Respondent | Corporation | Appeal Dismissed | Won | Nair Suresh Sukumara, Yeow Guan Wei, Joel |
| MS First Capital Insurance Limited | Defendant, Appellant | Corporation | Appeal Dismissed | Lost | Lok Vi Ming SC, Lee Sien Liang, Joseph, Pak Waltan, Qabir Singh Sandhu |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Chua Lee Ming | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Nair Suresh Sukumara | PK Wong & Nair LLC |
| Yeow Guan Wei, Joel | PK Wong & Nair LLC |
| Lok Vi Ming SC | LVM Law Chambers LLC |
| Lee Sien Liang, Joseph | LVM Law Chambers LLC |
| Pak Waltan | LVM Law Chambers LLC |
| Qabir Singh Sandhu | LVM Law Chambers LLC |
4. Facts
- Silverlink Resorts Limited is an insured party under an Industrial All Risks Policy issued by MS First Capital Insurance Limited.
- The policy covered various properties under the Aman Group, including the Amanpuri resort in Phuket, Thailand.
- The Governor of Phuket ordered the closure of all hotels in Phuket due to the COVID-19 pandemic.
- The Civil Aviation Authority of Thailand banned all international flights to Thailand.
- Silverlink made a claim under the policy based on the hotel closure order and the airport closure.
- MS First Capital rejected the claim, stating that a claim must be made and accepted under Section I of the policy for material damage loss for a claim to be admitted under Section II.
- Silverlink commenced proceedings seeking a declaration that a Section I claim is not necessary for a Section II claim.
5. Formal Citations
- Silverlink Resorts Ltd v MS First Capital Insurance Ltd, Originating Summons No 496 of 2020(Summons No 2633 of 2020)(Registrar’s Appeal No 185 of 2020), [2020] SGHC 251
6. Timeline
| Date | Event |
|---|---|
| Policy coverage period begins | |
| Governor of Phuket orders closure of all hotels | |
| Plaintiff commences proceedings | |
| Defendant files SUM 2633 seeking stay of proceedings | |
| Hearing date | |
| Judgment date |
7. Legal Issues
- Scope of Arbitration Agreement
- Outcome: The court held that the jurisdiction clause carved out disputes regarding the interpretation or application of the policy from the scope of the arbitration clause.
- Category: Substantive
- Sub-Issues:
- Interpretation of arbitration clause
- Carve outs from arbitration clause
- Related Cases:
- [2016] 1 SLR 373
- [2007] 2 Lloyd’s Rep 267
- [2008] 1 Lloyd’s Rep 254
- [2016] 5 SLR 455
- [1991] 2 Lloyd’s Rep 127
- [2020] 1 SLR 1043
- [2010] SLR 821
- [2008] FCA 29
- [2006] NZHC 1228
- Stay of Court Proceedings
- Outcome: The court dismissed the defendant's appeal for a stay of proceedings, finding that the dispute fell within the jurisdiction clause and not the arbitration clause.
- Category: Procedural
- Sub-Issues:
- Mandatory stay under International Arbitration Act
- Related Cases:
- [2016] 1 SLR 373
8. Remedies Sought
- Declaration that a claim under Section I of the policy is not necessary for a claim under Section II
- Declaration that the Plaintiff has a valid claim under the Policy for business interruption suffered in respect of the Amanpuri
9. Cause of Actions
- Breach of Contract
- Declaration
10. Practice Areas
- Commercial Litigation
- Arbitration
- Insurance Coverage
11. Industries
- Insurance
- Hospitality
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals | Court of Appeal | Yes | [2016] 1 SLR 373 | Singapore | Cited for the principle that a court hearing a stay application should grant a stay in favor of arbitration if certain conditions are met. |
| Fiona Trust & Holding Corporation v Privalov | N/A | Yes | [2007] 2 Lloyd’s Rep 267 | N/A | Cited for the principle that in construing an arbitration clause, the court construes it based on the presumed intentions of the parties as rational commercial parties. |
| Premium Nafta Products Ltd v Fili Shipping Co Ltd | House of Lords | Yes | [2008] 1 Lloyd’s Rep 254 | United Kingdom | Cited for the principle that in construing an arbitration clause, the court construes it based on the presumed intentions of the parties as rational commercial parties. |
| Rals International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpA | Court of Appeal | Yes | [2016] 5 SLR 455 | Singapore | Cited for the principle that all disputes between parties are assumed to fall within the scope of the arbitration clause unless shown otherwise. |
| Paul Smith Ltd v H&S International Holding Inc | N/A | Yes | [1991] 2 Lloyd’s Rep 127 | N/A | Cited for the 'Paul Smith approach' of interpreting jurisdiction clauses as applying to the arbitration itself. |
| BXH v BXI | High Court | Yes | [2020] 1 SLR 1043 | Singapore | Cited for the application of the 'Paul Smith approach' in Singapore. |
| Transocean Offshore International Ventures Ltd v Burgundy Global Exploration Corp | High Court | Yes | [2010] SLR 821 | Singapore | Cited for the principle that a jurisdiction clause can carve out specific disputes from the scope of an arbitration clause. |
| Seeley International Pty Ltd v Electra Air Conditioning BV | Federal Court of Australia | Yes | [2008] FCA 29 | Australia | Cited for the principle that a jurisdiction clause can carve out specific disputes from the scope of an arbitration clause. |
| Hi-Tech Investments Ltd v World Aviation Systems (Australia) Pty Ltd | High Court of New Zealand | Yes | [2006] NZHC 1228 | New Zealand | Cited for the principle that a jurisdiction clause can carve out specific disputes from the scope of an arbitration clause. |
| Grains and Industrial Products Trading Pte Ltd and another v State Bank of India and others | High Court | Yes | [2019] SGHC 292 | Singapore | Cited for the principle that the court should strive to give effect to all clauses in a contract. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration Clause
- Jurisdiction Clause
- Industrial All Risks Policy
- Business Interruption
- COVID-19
- Stay of Proceedings
- Carve Out
- Interpretation of Policy
- Application of Policy
- Mediation Clause
15.2 Keywords
- arbitration agreement
- stay of proceedings
- insurance policy
- jurisdiction clause
- COVID-19
- business interruption
16. Subjects
- Arbitration
- Insurance
- Contract Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- Contract Law
- Insurance Law
- Civil Procedure