Court has no power to order pre-arbitration discovery | Practical Law

Court has no power to order pre-arbitration discovery | Practical Law

Nicholas Peacock (Partner) and Chris Ross (Senior Associate), Herbert Smith LLP

Court has no power to order pre-arbitration discovery

Practical Law Legal Update 4-503-8114 (Approx. 3 pages)

Court has no power to order pre-arbitration discovery

Published on 03 Nov 2010Singapore
Nicholas Peacock (Partner) and Chris Ross (Senior Associate), Herbert Smith LLP
In a decision dated 22 April 2010 but only recently published, the Singapore High Court has held that it has no power to grant discovery prior to the commencement of arbitration.

Background

Order 24, Rule 6(1) of the Singapore Rules of Court states that an application for an order for the discovery of documents before the commencement of proceedings may be made by originating summons.
Order 92, Rule 4 of the Singapore Rules of Court provides that nothing in the Rules limits the court's inherent powers to make any order necessary to prevent injustice or an abuse of process.
Section 12A of the Singapore International Arbitration Act (IAA) grants the courts power to make orders in support of arbitration, but section 12A specifically omits discovery from the orders that may be made.

Facts

The plaintiff, Equinox Offshore Accommodation Limited (Equinox), and the defendant, Richshore Marine Supplies Pte Ltd (Richshore), had entered into an agreement under which Richshore was appointed as Equinox's sole agent in Singapore for the purchase of certain goods. Richshore was entitled to a percentage of the price of the goods bought. Under the agreement, Richshore was obliged to keep accounts and records of purchases made and permit inspection of these by Equinox.
The agreement contained an arbitration clause referring disputes to the Singapore International Arbitration Centre.
Equinox brought an originating summons under Order 24, Rule 6(1) of the Rules of Court for discovery of the accounts and records, on the basis that it believed it had been overcharged by Richshore.

Decision

The court held that the word "proceedings" in Order 24, Rule 6(1) meant only court proceedings, and did not extend to arbitration proceedings. The court therefore decided that it did not have the power to order discovery prior to the institution of arbitral proceedings.
The court also considered whether it had the power to order discovery under its inherent jurisdiction under Order 92, Rule 4. It was held that a real "need" had to be established for Order 92, Rule 4 to apply, and that in this case there was no such need because there are specific legislative provisions set out in the IAA regarding the court's power to make orders regarding the conduct of arbitration.
In this case, it was common ground that the lex arbitri was the IAA. Although the IAA makes provision for the courts to grant interim relief in aid of arbitration, the effect of recent amendments to the IAA (in which section 12(7) was replaced by a new section 12A) was that the court no longer has the power to grant discovery in aid of arbitration.
Accordingly, the court found that it had no power, either under Order 24, Rule 6(1), or its inherent jurisdiction, to make an order for pre-arbitration discovery.

Comment

This case highlights an apparent lacuna in the arbitration regime in Singapore. This was recognised by the court, which nonetheless took the position that if parties have chosen arbitration as their forum of dispute resolution, they should be bound by the arbitration rules and procedures in question.
In practice, if parties think they may wish to make an application for discovery pre-arbitration, they would be well advised to specifically include a clause to this effect in their arbitration agreement. Otherwise they will be faced with the option of starting the arbitration based on the information they have, and making an early request for document discovery to the tribunal.