Under the International Arbitration Act (Chapter 143A of Singapore), a court may grant a stay of court proceedings that have been instituted where such proceedings concern a matter that is governed by an arbitration agreement. An exception to this rule is where there is in fact no dispute as between the parties that may be arbitrated. This was recently reaffirmed by the Singapore High Court in the case of Merrill Lynch Pierce, Fenner & Smith Inc v Prem Ramchand Harjani & Anor [2009] SGHC 133 (Singapore High Court, 4 June 2009).

In this case, the second defendant had a securities account with the plaintiff. Pursuant to orders placed by the first defendant, as director of the second defendant, the plaintiff purchased shares for the second defendant's account. The account opening forms provided for arbitration in the event of a dispute. When the second defendant failed to pay for the shares on the settlement date, the plaintiff commenced court proceedings to recover the sum owed. The defendants applied to stay the proceedings on the basis that they should be arbitrated. However, the High Court refused to grant the stay, holding that there was no dispute to arbitrate as the defendants did not dispute the validity of the purchase, the second defendant's liability to pay, or the quantum owed.