CNA v CNB: Upholding ICC Arbitration Clause Despite SHIAC Agreement in Software Licensing Dispute
In CNA v CNB, the Court of Appeal of Singapore dismissed CNA's appeal against the SICC's decision, which upheld the jurisdiction of an ICC Tribunal in an arbitration concerning a software licensing agreement. The court found that CNA breached its fiduciary duty to CNB by entering into a subsequent agreement with CND and CNE that contained a SHIAC arbitration clause, attempting to supersede the original ICC clause. The court held that the ICC clause remained operative and the tribunal had jurisdiction over the disputes. The appeal was dismissed with costs awarded to the respondents.
1. Case Overview
1.1 Court
Court of Appeal 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 upholds ICC arbitration clause in a software licensing dispute, finding a breach of fiduciary duty in a subsequent SHIAC agreement. Appeal dismissed.
1.7 Decision Date
2. Parties and Outcomes
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | No |
| Steven Chong | Justice of the Court of Appeal | No |
| Robert French | International Judge | Yes |
4. Counsels
4. Facts
- CNA and CNB entered into a Software Licensing Agreement (SLA) in 2001.
- The SLA contained an ICC arbitration clause.
- A subsequent Extension Agreement in 2017 contained a SHIAC arbitration clause.
- CNB commenced arbitration against CND and CNE in 2017, alleging breaches of the SLA.
- CNA entered into the 2017 Extension Agreement without consulting CNB.
- The 2017 ICC Tribunal found that CNA breached its fiduciary duties to CNB.
- The SICC dismissed applications to set aside the First and Second Partial Awards.
5. Formal Citations
- CNA v CNB and another, Civil Appeal No 7 of 2023, [2024] SGCA(I) 2
- CNA v CNB and another and other matters, , [2023] SGHC(I) 6
6. Timeline
| Date | Event |
|---|---|
| Basic Agreement between CNA and CNB executed | |
| Domestic Agreement between CNA and CNB executed | |
| Overseas Agreement between CNA and CNB executed | |
| Agreement between CNA and CNB executed regarding cooperative relationship | |
| Software Licensing Agreement (SLA) executed | |
| Agreement between CNA and CNB executed clarifying overseas sales revenues | |
| Technical issues arose with the game | |
| 2002 Supplementary Agreement executed | |
| CNE commenced arbitration proceedings against CNA and CNB | |
| 2003 Settlement Agreement between CNA and CNE executed | |
| CNE informed the ICC that it had settled with CNA and was withdrawing the arbitration against CNA and CNB | |
| CNB filed its Answer with Counterclaim against CNE | |
| Settlement Agreement approved by the Seoul Central District Court | |
| CNE became the largest shareholder in CNA | |
| 2005 Interim Award issued | |
| CNB commenced arbitration against CND and CNE | |
| CNC succeeded to all of CNB’s rights and obligations in respect of [X2] | |
| Extension Agreement concluded between CNA, CND and CNE | |
| CND commenced an arbitration in the SHIAC | |
| CNB submitted a request for joinder to join CNA as an additional respondent in the 2017 ICC Arbitration | |
| ICC Tribunal constituted | |
| Tribunal in SHIAC arbitration delivered an Award confirming the validity of the 2017 Extension Agreement | |
| 2017 ICC Tribunal issued its First Partial Award on liability | |
| 2017 ICC Tribunal issued a Second Partial Award | |
| Appeal heard | |
| Appeal dismissed |
7. Legal Issues
- Jurisdiction of Arbitral Tribunal
- Outcome: The court held that the ICC Clause remained operative and the Tribunal did not cease to have jurisdiction over the disputes referred to it.
- Category: Jurisdictional
- Sub-Issues:
- Superseding arbitration clause
- Validity of extension agreement
- Breach of Fiduciary Duty
- Outcome: The court found that CNA was in breach of its fiduciary duty to CNB in entering into the 2017 Extension Agreement.
- Category: Substantive
- Sub-Issues:
- Duty to consult
- Acting in the joint interests
8. Remedies Sought
- Setting aside of First Partial Award
- Setting aside of Second Partial Award
9. Cause of Actions
- Breach of Contract
- Breach of Fiduciary Duty
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Software
- Gaming
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| CNA v CNB and another and other matters | Singapore International Commercial Court | Yes | [2023] SGHC(I) 6 | Singapore | The SICC judgment which was appealed against in this case. The Court of Appeal upheld the SICC's decision. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act 1994 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Software Licensing Agreement
- ICC Arbitration Clause
- SHIAC Arbitration Clause
- Extension Agreement
- Fiduciary Duty
- Entrustment
- Jurisdictional Objection
15.2 Keywords
- arbitration
- software licensing
- fiduciary duty
- ICC
- SHIAC
- Singapore
- contract law
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Arbitration | 90 |
| Fiduciary Duties | 85 |
| Commercial Disputes | 75 |
| International Commercial Arbitration | 70 |
| Breach of Contract | 60 |
| Corporate Law | 50 |
| Civil Procedure | 40 |
16. Subjects
- Arbitration
- Contract Law
- Intellectual Property
- Fiduciary Duty