ANUPAM MITTAL v WESTBRIDGE VENTURES II INVESTMENT HOLDINGS

Facts

Mr Anupam Mittal, an Indian resident, co-founded the matrimonial service Shaadi.com, run by People Interactive (India) Private Limited, and was its managing director until 30 November 2019. Westbridge Ventures II Investment Holdings, a Mauritius private equity fund, invested in the company in 2006. The shareholders' agreement (SHA) of 10 February 2006 was governed by Indian law, and cl 20 required disputes relating to the management of the company or to matters in the SHA to be referred to ICC arbitration seated in Singapore.

Relations soured from 2017 when Westbridge sought to exit, including through a possible sale to Info Edge (India) Limited, which Mr Mittal said was a Significant Competitor under the SHA. He complained that Westbridge and others colluded to oust him from management and that directors breached their fiduciary duties. On 3 March 2021 he filed Company Petition No 92 of 2021 before the National Company Law Tribunal (NCLT) in Mumbai, seeking oppression remedies. Westbridge obtained an interim anti-suit injunction in Singapore, and Mr Mittal sued in the Bombay High Court for a declaration that the NCLT was the only competent forum. The High Court Judge granted a permanent anti-suit injunction, holding that the law of the seat governs arbitrability before an award. Mr Mittal appealed to the Court of Appeal in Civil Appeal No 64 of 2021. An amicus curiae assisted on the governing-law question.

Issues

1. Whether subject matter arbitrability at the pre-award stage is governed by the law of the seat or by the proper law of the arbitration agreement.
2. Whether the proper law of the arbitration agreement in the SHA was Indian law or Singapore law.
3. Whether the claims in the NCLT petition fell within the scope of the arbitration agreement.
4. Whether the proceedings should be stayed on case management grounds pending the Indian proceedings.

Holding

The Court of Appeal dismissed the appeal and maintained the anti-suit injunction in the terms ordered by the Judge, awarding Westbridge costs of $100,000 all in.

Reasoning

Departing from the Judge's view, the court held that arbitrability is, in the first instance, determined by the law governing the arbitration agreement. Section 11 of the International Arbitration Act 1994 bars arbitration contrary to public policy, and that term is not confined to Singapore's public policy; it extends to foreign public policy connected with essential elements of the arbitration agreement. The agreement is the source of the tribunal's jurisdiction, so if its governing law makes a dispute non-arbitrable, the arbitration cannot proceed. If Singapore law as the seat treats the dispute as non-arbitrable, the arbitration also cannot proceed. This composite approach avoided the anomalies the Judge feared, and parties can plan around differences when drafting.

Applying the three-stage test in BCY v BCZ [2017] 3 SLR 357, a choice of Indian law for the SHA was not an express choice for the arbitration agreement. The main contract's law would ordinarily be the implied choice, but not where it would negate the parties' clear intention to arbitrate. Unlike BNA, the parties had deliberately included management disputes, chosen a neutral ICC seat outside India, and set out the mechanics of the arbitration in detail. Since oppression claims, often intertwined with management disputes, are not arbitrable in India, implying Indian law would frustrate that intention. The law with the closest connection was that of the seat, so Singapore law governed.

Under Singapore law oppression claims are arbitrable. Examining the six complaints in the NCLT petition, the court found that practically all related to the management of the company or to matters in the SHA, such as his executive role, appointments to the board and managing director post, the Founder status of shares, and the proposed sale to Info Edge. That they might support a finding of oppression did not take them outside the arbitration agreement. The NCLT petition therefore breached it. The court stressed that this was not a finding that all the complaints were contractual or outside the NCLT's jurisdiction.

On a limited stay, the court weighed the risk that an award might not be enforceable in India, given the Indian Supreme Court's decision in Vijay Karia, against holding Mr Mittal to his bargain. It refused a stay because the Bombay suit showed no prospect of resolution within a year, leaving allegations hanging over Westbridge, and because arbitration could not be called fruitless: it would test the evidence and could give rise to res judicata and estoppel.

From the judgment