Материал: Amy C Kläsener

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Singapore

are constrained by the doctrine of remoteness of damage (as manifested in the concept of reasonable foreseeability).34 However, damages awarded with respect to a fraudulent misrepresentation are not subject to such a constraint, and are recoverable even if they are not reasonably foreseeable.35

The measure of damages under Section 2(1) of the Misrepresentation Act is that which would have been awarded for fraudulent misrepresentation or deceit, but this view has been doubted by the Singapore Court of Appeal, which appears to favour the measure of damages to be that awarded under common law for negligent misrepresentation.36

Special substantive issues

It is common for the target to expressly exclude claims based on pre-contractual representations that are not repeated as representations and warranties in the M&A agreement by way of a non-reliance clause. However, depending on the wording of the non-reliance clause, it may be subject to Section 3 of the Misrepresentation Act, which provides that a contractual term that excludes or restricts ‘any liability to which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made’, or ‘any remedy available to another party to the contract by reason of such a misrepresentation’, shall have no effect except insofar as it satisfies the requirement of reasonableness as stated in Section 11(1) of the Unfair Contract Terms Act,37 and it is for those claiming that the term satisfies that requirement to show that it does. Section 11(1) provides that the requirement of reasonableness is that the term shall have been ‘a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made’. Nevertheless, it may be possible to argue that some variants of non-reliance clauses have the effect of preventing (instead of excluding or restricting) liability in misrepresentation from arising by negating one or more of the elements of liability, and is hence does not attract the requirement of reasonableness.38 In any event, given that the acquisition agreement is usually entered into between sophisticated parties under legal advice, it would be difficult to strike down non-reliance clauses which are freely negotiated between commercial parties as being unreasonable.

A recent decision of the Singapore High Court in an application to set aside an arbitration award made in relation to a cross-border M&A illustrates how contractual terms affect claims in misrepresentation.39 In that case, the sale and purchase agreement excluded liability for misrepresentations other than those made fraudulently, and placed the burden on the buyer to undertake its own due diligence.

34ibid., at [23].

35ibid., at [23].

36RBC Properties Pte Ltd v. Defu Furniture Pte Ltd [2015] 1 SLR 997 at [84].

37Cap 396, 1994 Rev Ed.

38Orient Centre Investments Ltd and another v. Société Générale [2007] 3 SLR(R) 566 at [50].

39BNX v. BOE and another matter [2017] SGHC 289.

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Special procedural issues

Emergency arbitrator

Article 30.2 of the SIAC Rules (2016) provides that a party may apply for emergency interim relief prior to the constitution of the tribunal. The Emergency Arbitrator (EA) provisions were introduced in the SIAC Rules 2010 to address the need for emergency interim relief before a tribunal is constituted. SIAC was the first international arbitral institution in Asia to introduce EA provisions in its arbitration rules.40 Since 2010, parties have applied for emergency relief in 32 corporate disputes (including M&A disputes).41

The key mechanics of the EA procedure are as follows:

•The President of the Court of Arbitration of SIAC shall, if he or she determines SIAC should accept the application for emergency interim relief, seek to appoint an EA within one day of receipt by the Registrar of such application and payment of the administration fee and deposits.42

•The EA shall within two days of his or her appointment, establish a schedule for con-

sideration of the application for emergency interim relief. Such schedule shall provide a reasonable opportunity for the parties to be heard, but may provide for proceedings by telephone or video conference or on written submissions as alternatives to a hearing in person.The EA shall have the powers vested in the tribunal pursuant to these Rules, including the authority to make a finding on his or her own jurisdiction, without prejudice to the tribunal’s determination.43

•The EA may order or award any interim relief that he or she deems necessary, including preliminary orders that may be made pending any hearing, telephone­ or video conference or written submissions by the parties.44

•The EA shall make an interim order or award within 14 days of the date of appointment.45

•The EA may not act after the tribunal is constituted. The tribunal may reconsider, modify or vacate any interim order or award issued by the EA, including a ruling on the EA’s jurisdiction.46

Joinder and consolidation

The Arbitration Act applies to any arbitration where the place of arbitration is Singapore, and where the International Arbitration Act does not apply to that arbitration.47 The International Arbitration Act applies to international arbitrations (unless the parties expressly agreed otherwise) or where the parties agree in writing that the International Arbitration Act would apply.48 The Arbitration Act and International Arbitration Act do not provide for automatic joinder and consolidation.The International Arbitration Act is silent

40Annual report of the Singapore International Arbitration Centre, 2018, p. 19.

41ibid.

42SIAC Rules (2016), Schedule 1, para. 3.

43ibid., Schedule 1, para. 7.

44ibid., Schedule 1, para. 8.

45ibid., Schedule 1, para. 9.

46ibid., Schedule 1, para. 10.

47Arbitration Act (Cap 10, 2002 Rev Ed), s. 3.

48International Arbitration Act (Cap 143A, 2002 Rev Ed), s. 5.

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on joinder and consolidation, whereas the Arbitration Act provides that the tribunal has no power to order consolidation of arbitral proceedings or concurrent hearings without the parties’ agreement.49

The Singapore courts take a conservative approach to joinder of non-parties. The Singapore Court of Appeal has ruled that any provision in the arbitration rules purporting to have the effect of forced joinder of non-parties would need to be in clear and certain terms.50 This is because forced joinder of non-parties may expose an arbitrating party to further obligations to arbitrate and impinges on party autonomy and confidentiality.51 Indeed, the Court of Appeal held that forced joinder of non-parties is also a major derogation from the principle of party autonomy because it compels an arbitration with other persons with whom the parties had not specifically agreed to arbitrate.52

It has also been held that the Singapore court may order a joinder only with the parties’ consent.53 This is because if a court orders a joinder notwithstanding the lack of consent, it would force a party to bring its dispute to be adjudicated by a forum that has no jurisdiction to decide the matter, and from which no enforceable award could be rendered. More fundamentally, the non-consenting party would be denied its right to access the courts when it has not waived its right to do so in the form of an arbitration agreement.54

The SIAC Rules (2016) provide for joinder of parties. After the constitution of the tribunal, a party or non-party to the arbitration may apply to the tribunal for one or more additional parties to be joined in an arbitration as a claimant or a respondent, provided that either of the following criteria is satisfied:

•the additional party to be joined is prima facie bound by the arbitration agreement; or

•all parties, including the additional party to be joined, have consented to the joinder of the additional party.55

Prior to the constitution of the tribunal, a party or non-party to the arbitration may also file an application with the Registrar for one or more additional parties to be joined in an arbitration as a claimant or a respondent, provided that the same criteria have been satisfied.

The SIAC Rules (2016) provide for consolidation.After the constitution of a tribunal, a party may apply to it to consolidate two or more arbitrations, provided that any of the following criteria is satisfied in respect of the arbitrations to be consolidated:

•all parties have agreed to the consolidation;

•all the claims in the arbitrations are made under the same arbitration agreement, and the same tribunal has been constituted in each of the arbitrations or no tribunal has been constituted in the other arbitration or arbitrations; or

49Arbitration Act (Cap 10, 2002 Rev Ed), s. 26.

50PT First Media TBK (formerly known as PT Broadband Multimedia TBK) v.Astro Nusantara International BV and others and another appeal [2014] 1 SLR 372 at [185].

51ibid., at [186].

52ibid., at [188].

53The ‘Titan Unity’ [2014] SGHCR 4 at [24].

54ibid.

55SIAC Rules (2016),Art 7.8.

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•the arbitration agreements are compatible, the same tribunal has been constituted in each of the arbitrations or no tribunal has been constituted in the other arbitration or arbitrations, and: (1) the disputes arise out of the same legal relationships; (2) the disputes arise out of contracts consisting of a principal contract and any ancillary contracts; or (3) the disputes arise out of the same transaction or series of transactions.56

Prior to the constitution of any tribunal in the arbitrations sought to be consolidated, a party may also file an application with the Registrar to consolidate two or more arbitrations, provided that the same criteria have been satisfied.57

56ibid.,Art 8.7.

57ibid.,Art 8.1.

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18

Switzerland

Michael Bösch and Patrick Rohn1

Frequency of M&A disputes

Although there are no official statistics on the frequency of M&A disputes in Switzerland, it seems fair to say that the number of M&A disputes has increased in the past years.2 Reasons for this may lie, among other things, in M&A transactions having become increasingly complex and transaction procedures becoming continually more professionalised (due diligence, auction procedures, etc.).

M&A disputes between privately held companies are often resolved by arbitration, but the proceedings are generally confidential. According to the latest statistics of the Swiss Chambers’ Arbitration Institution (SCAI),3 which administers arbitral proceedings under the Swiss Rules of International Arbitration (Swiss Rules), 20 per cent of the new cases filed in 2018 related to ‘corporate/M&A/joint ventures’, amounting to 18 per cent of all matters in dispute between 2004 and 2018.While almost all arbitral proceedings under the Swiss Rules were seated in Switzerland, one cannot deduce from the statistics whether the underlying disputes relate to international or purely domestic M&A transactions.

Based on the publicly available data on M&A disputes before the courts, no increase in the frequency of M&A litigation seems to have occurred in the past years, but this may be because M&A disputes are often settled with the assistance of the court.

1Michael Bösch and Patrick Rohn are partners at Thouvenin Rechtsanwälte KLG.

2A trend often described with the saying ‘after closing is before a dispute’.

3See https://www.swissarbitration.org/Statistics, visited on 21 October 2019.

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