Gulf Hibiscus v Rex International

A delicate case management situation arises when a dispute brought in court engages issues which must be determined in arbitration between some of the parties, and in court between the others. Case law across the Commonwealth—frequently in the context of shareholder disputes or unfair prejudice petitions—demonstrates its prickly nature.1 The court is placed in an intractable situation when, for example, it is asked to rule on a singular question of unfair prejudice, when some allegations on which it depends fall within an arbitration clause in a shareholders’ agreement that binds only some shareholders, but not the other shareholders, directors or the company, all of whom are party to the unfair prejudice proceedings. The arbitration legislation of many jurisdictions, including England and Singapore, requires the court to stay the parts of the dispute which are subject to the arbitration clause, in favour of resolution by arbitration. The question then becomes what the court ought to do with the remainder of the dispute: the issues which do not