Joshua Phang Shih Ern
TSMP Law Corporation, Singapore​​​​​
joshuaphang.se@gmail.com​​​​​​​

Introduction

When arbitral proceedings are impending, it is unlikely for a party to cooperate in giving the other party documents or information to assess whether the latter has a good cause of action. A potential claimant that lacks the necessary information to make out a good cause of action thus may be tempted to seek a court order for pre-arbitral discovery in aid of arbitration. In Singapore, it had been held previously that the court does not have jurisdiction to order pre-arbitral discovery as, among other things, the Rules of Court did not grant the court such powers. However, with the recent change of the Singapore Rules of Court (2021) (which came in effect as of 1 April 2022) ('2021 ROC'), it is perhaps time for Singapore courts to reconsider the issue of allowing pre-arbitral discovery in aid of arbitration. 

This article will review the current status of pre-arbitral discovery in aid of arbitration in Singapore, analyse the state of the law in other jurisdictions like UK and Australia, and evaluate if there are any changes to the law of pre-arbitral discovery in aid of arbitration in light of the 2021 ROC.

Pre-arbitral discovery in Singapore is not allowed

Generally, Singapore courts do not allow pre-arbitral discovery in aid of arbitration proceedings. In Equinox Offshore Accommodation Ltd v Richshore Marine Supplies Pte Ltd [2010] SGHC 122 ('Equinox'), the Court dealt squarely with the issue on whether pre-arbitral discovery was allowed. In that case, parties entered into an Agreement under which the defendant was appointed as the plaintiff’s sole and exclusive agent in Singapore for the purchase of goods. In consideration of the services provided, the defendant was entitled to a payment based on a '12 percent mark-up' on the price of such goods purchased on behalf of the plaintiff. Clause 3(iii) of the Agreement provided that the defendant would 'keep proper and accurate accounts and records of purchases made on behalf of [the plaintiff] including full details of the persons from whom they are purchased, the quantity, the total price paid and whenever possible the price per quantity and also of the expenses incurred by them in making the purchases and arranging for delivery as required by [the plaintiff] and of all other charges incurred in relation to such purchases and will permit [the plaintiff] by its duly appointed agents to inspect those accounts and records at such times as it may respectively require.' The Agreement contained an arbitration clause which stated that any dispute arising out of or in connection with the Agreement shall be referred to arbitration in Singapore in accordance with the Arbitration Rules of the Singapore International Arbitration Centre. 

The plaintiff brought an application pursuant to O 24 r 6(1) of the Rules of Court (Cap 322, R 5, 2006 Rev Ed) ('2006 ROC') to seek discovery of the accounts and records falling within the definition in clause 3(iii) of the Agreement, from 1 January 2008 to date. The plaintiff brought this application as it had grounds to believe that the defendant had overcharged the plaintiff in respect of the goods purchased on its behalf, in breach of the terms of the Agreement. 

The Court in Equinox dismissed the plaintiff’s application and held that the Court did not have jurisdiction to grant an order for pre-arbitral discovery. First, the Court clarified the terms 'pre-action discovery' and 'pre-arbitral discovery'. Applying the Court of Appeal decision in Woh Hup (Pte) Ltd v Lian Teck Construction Pte Ltd [2005] SGCA 26 ('Woh Hup'), the Court in Equinox held that 'pre-arbitral discovery' should be restricted to discovery sought before the commencement of arbitral proceedings per se. Any discovery prior to and for the purpose of commencing legal proceedings (and not arbitral proceedings per se), including that sought by a party to an arbitration agreement, should still be termed 'pre-action discovery'.^[1] 

Second, the Court held that pre-arbitral discovery should not be allowed in order to respect the parties’ autonomy and choice for arbitration as a dispute resolution mechanism. It held that an application to invoke the court process in order to obtain discovery would be improper in the absence of agreed terms to this effect. The respondent to such an application might complain that it is being unjustly deprived of the benefits which form the basis of his agreement to arbitrate. Court proceedings would involve, amongst others, increased expenditure and the risk of adverse publicity in a more public forum. Such outcomes also would be contrary to the spirit of the arbitral process which is intended to operate independently of the courts.^[2] 

Third, the Court also analysed the 2006 ROC to consider if the Court had jurisdiction to grant pre-arbitral discovery. The plaintiff’s application for discovery in Equinox was based on O 24 r 6(1) of the 2006 ROC, which stated:

• Discovery against other person (O. 24, r. 6)
  ​​​​​​​6. —(1) An application for an order for the discovery of documents before the commencement of proceedings shall be made by originating summons and the person against whom the order is sought shall be made defendant to the originating summons. [emphasis added]

The Court in Equinox stated that the word 'proceedings' in O 24 r 6(1) of the 2006 ROC was restricted to court proceedings and did not encompass proceedings in arbitration. This was gleaned from O 24 r 6(3) of the 2006 ROC which states that:

• (3)  An originating summons under paragraph (1) … shall be supported by an affidavit which must —
  (a)  in the case of an originating summons under paragraph (1), state the grounds for the application, the material facts pertaining to the intended proceedings and whether the person against whom the order is sought is likely to be party to subsequent proceedings in Court;
  [emphasis added]

For completeness, O 24, rr 6(1) and (3) of the 2006 ROC are similar in wording with O24, rr 6(1) and (3) of the Rules of Court (Cap. 322, R 5, 2014 Rev. Ed.) ('2014 ROC').
Although the Equinox Court sought to apply the decision of the Court of Appeal in Woh Hup, that decision had left room for pre-arbitral discovery to be granted. Notably, the Court of Appeal in Woh Hup stated at [36]:

• 'It appeared to us that any matter submitted to arbitration should, in general and certainly wherever possible, be dealt with by the arbitral tribunal. To invoke the assistance of the courts prior to the commencement of arbitral proceedings may, in certain instances, appear to run contrary to the spirit and scheme of arbitration.'

As Professor Pinsler noted, the phrases 'in general and certainly wherever possible' and 'in certain instances' indicate that this is a general rather than absolute rule, and that exceptional circumstances (as yet undefined) may justify court involvement prior to the arbitration.^[3] In other words, the Court of Appeal in Woh Hup could have meant that in other instances, invoking the assistance of the courts prior to commencement of arbitral proceedings may not be contrary to the spirit and scheme of arbitration.

UK position

The position in the UK is similar to that in Singapore. In Travelers Insurance Company v Countrywide Surveyors Ltd [2010] EWHC 2455 (TCC) ('Travelers'), the Court held that pre-action discovery in aid of arbitration was not available under the UK Rules of Court. This was because arbitration was not a subsequent proceeding held in court. In Travelers, the High Court interpreted Section 33(2) of the Senior Courts Act 1981 and Rule 31.16 of the UK Civil Procedure Rules ('CPR'), and held at [18] that:

• As a matter of statutory construction, it is plain that the power to order pre-action disclosure in accordance with s.33(2) can only be invoked by an applicant who 'appears to the High Court [to be] likely to be a party to subsequent proceedings in that court'. That must mean litigation in the High Court. If the subsequent proceedings between the parties are to be referred to arbitration, the applicant would not be a party to subsequent proceedings in the High Court. As a matter of construction, therefore, it seems to me that s.33(2), and thus CPR 31.16, does not apply if the underlying dispute is to be referred to arbitration.

The UK position in Travelers and the Singapore position in Woh Hup are similar, and both judgments were based on the wording of the respective rules of Court which contained the phrase 'subsequent proceedings in [that] court'.

Australian position

The position in Australia is different from that of Singapore. In nearmap Ltd v Spookfish Pty Ltd [2014] NSWSC 1790 ('Spookfish'), the plaintiffs operated a business supplying aerial or geospatial photomosaic images to their customers by subscription. The plaintiffs had developed hardware and software using secret and highly innovative processes and confidential information at a cost of approximately $30 million. The defendant was set up by former employees of the plaintiff and had set up a rival business. There were suspicions that the former employees possessed confidential information from their employment and were using this information. The plaintiffs sought pre-arbitral discovery against the defendant for documents in relation to the defendants’ operating systems and the possible use of the plaintiffs’ confidential information.

The defendant sought to stay the proceedings based on the arbitration agreement between the parties under s 8 of the Commercial Arbitration Act 2012 (WA) and s 8 of the Commercial Arbitration Act 2010 (NSW), arguing that the court may order a stay of proceedings since 'there is a matter, in relation to which the action is brought, which is the subject of the arbitration agreement'. However, the New South Wales Supreme Court did not grant a stay of proceedings on the basis that the pre-arbitral discovery application was not a 'matter' within the meaning of s 8 of the Commercial Arbitration Act 2012 (WA) and s 8 of the Commercial Arbitration Act 2010 (NSW). The New South Wales Supreme Court thus refused to stay the pre-arbitral discovery application. 

Instead, the Court in Spookfish went on to interpret the Uniform Civil Procedure Rules (2005) ('UCPR') at Reg 5.3 which provides that:

• 5.3 Discovery of documents from prospective defendant
  
  (1)    If it appears to the court that—
  
  (a) the applicant may be entitled to make a claim for relief from the court against a person ('the prospective defendant') but, having made reasonable inquiries, is unable to obtain sufficient information to decide whether or not to commence proceedings against the prospective defendant, and
  
  (b) the prospective defendant may have or have had possession of a document or thing that can assist in determining whether or not the applicant is entitled to make such a claim for relief, and
  
  (c) inspection of such a document would assist the applicant to make the decision concerned,
  ​​​​​​​the court may order that the prospective defendant must give discovery to the applicant of all documents that are or have been in the person's possession and that relate to the question of whether or not the applicant is entitled to make a claim for relief.

The Court in Spookfish held at [72] that the question of whether the plaintiffs are entitled to make a claim under UCPR 5.3 is not a dispute as to the rights or obligations of a party to the agreements. In fact, the Court held that it is a right independent of the arbitration agreements but instead, a right that arises out of the UCPR. Notably, the Court held that UCPR Reg 5.3 and the phrase 'may be entitled to make a claim [for relief from the court]' contained therein dealt with the plaintiffs’ entitlement to the relief under UCPR Reg 5.3 and not with the obligations of parties under the agreements in dispute. The Court in Spookfish essentially held that such applications should not be dealt with s 8 of the Commercial Arbitration Act 2012 (WA) and s 8 of the Commercial Arbitration Act 2010 (NSW) but should be addressed by UCPR 5.3, since pre-arbitral discovery applications do not deal with the obligations of parties under an arbitration agreement.

Singapore Rules of Court (2021)

The current Singapore Rules of Court governing pre-action discovery may be found at O.11, r.11 of the 2021 ROC, which came in force as of 1 April 2022:

• Production before action or against non‑parties (O. 11, r. 11)
  
  ​​​​​​​11.—(1)  The Court may order the production of documents and information before the commencement of proceedings or against a non‑party to identify possible parties to any proceedings, to enable a party to trace the party’s property or for any other lawful purpose, in the interests of justice.

The phrase 'commencement of proceedings' in O.11, r.11 seems to suggest that pre-action discovery is not limited to pre-action discovery being used in aid of Court proceedings, but may also include pre-arbitral discovery in aid of arbitration as well. This is especially so when the wording of O.11, r.11 is contrasted with O.11, r.10 which distinguishes between 'court proceedings' and 'other proceedings' – 'proceedings' in O.11, r.11 may arguably be read wider to encompass all proceedings which include arbitration proceedings. Such an interpretation is also supported by the change in wording from the 2014 ROC to the 2021 ROC, where the phrase 'proceedings in Court' in the 2014 ROC has been removed. Without it, the phrase 'any proceedings' in the 2021 ROC does not seem to be restricted to only court proceedings.

With the change of the Singapore Rules of Court, and in light of the Court of Appeal’s pronouncement in Woh Hup, which was subsequently noted by Professor Pinsler, there may now be slightly more room to argue that pre-arbitral discovery in aid of arbitration could be allowed. One must, however, bear in mind that this is still subject to the Court’s discretion, which is likely to take into account the fact that the parties agreed to arbitration and that invoking any court process may go against the spirit of arbitration.^[4]  What may transpire in an application for pre-arbitral discovery before the Singapore courts remains to be seen.