JUDGMENT

Lee Swee Seng JCA:

[1] The arbitration agreement here is rather uncommon but simple enough to be understood even on first reading. It gives the parties to the contract an option, in the event of a dispute, to either go to court or proceed with arbitration. When a dispute did arise in this matter, one party proceeded with filing a writ action in court only to be met by the other party applying to stay the court proceedings on the ground that there is an arbitration agreement that requires the dispute to be referred to arbitration.

Before The High Court

[2] The High Court dismissed the stay application made under s 10 of the Arbitration Act 2005 ("AA 2005") and held that as the key components of an arbitration agreement had not been agreed upon, such as the seat of arbitration, the number of arbitrators and the mode of their appointment, the arbitration clause was rendered null and void, inoperative and incapable of performance under s 10(1) AA 2005.

[3] The High Court also held that the arbitration agreement that gives the parties an option to proceed with litigation or arbitration is not a binding arbitration agreement that clearly and unequivocally requires the dispute to be resolved exclusively through arbitration. The High Court further held that such an arbitration agreement is null and void for failing to meet the requirements of the AA 2005 and is also unenforceable as it lacks certainty.

[4] The High Court was of the view that the permissive word "may" offering the parties the option to refer the disputes either to arbitration or to the court with respect to resolving the dispute indicates a discretion vested on the parties and the non-mandatory language of reference to arbitration makes the arbitration clause unenforceable.