Not usually against public policy.
The Singapore Court of Appeal has affirmed that it is not against public policy to arbitrate minority oppression claims, but individual claims may be and need to be scrutined: L Capital Jones Ltd and another v Maniach Pte Ltd [2017] FICR 11.
A shareholder brought minority oppression proceedings against the company and the majority shareholder who applied to strike out or stay the proceedings on the basis of an arbitration agreement in the shareholders' agreement. The shareholder countered by arguing that it was against public policy to arbitrate minority oppression claims. Section 11(1) of the International Arbitration Act said "Any dispute which the parties have agreed to submit to arbitration under an arbitration agreement may be determined by arbitration unless it is contrary to public policy to do so."
The Court of Appeal had held in Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2016] 1 SLR 373 that it was not generally against public policy to arbitrate oppression claims, but said here that the facts of particular oppression claims might raise public policy considerations against arbitration because of other features of the dispute. The actual assertions in the claim must be examined to determine if it would be against public policy to arbitrate that dispute.
Here, an allegation that the defendants had abused Australian court proceedings to transfer shares in the company at an undervalue was not essential to the oppression proceedings which were concerned with whether the transfer was unfair, not how it was effected.
Read the full head note here: [2017] FICR 11.
