Revisiting The Doctrine Of Separability

What is the Doctrine of Separability?

1. The doctrine of separability is a well-established legal doctrine that treats an arbitration clause in a contract as a separate self-contained agreement, independent of the other terms of the contract. In Singapore, the doctrine of separability is statutorily enshrined in both the International Arbitration Act 1994 (incorporating the UNCITRAL Model Law on International Commercial Arbitration) and the Arbitration Act 2001.
2. The doctrine of separability facilitates another well-established legal doctrine of Kompetenz-Kompetenz, i.e., that an arbitral tribunal has the power to hear arguments and decide the extent of its competence or jurisdiction to hear the issues that have been put in front of it by the parties.
3. Thus, an arbitration clause contained in the main contract is severable (as a separate arbitration agreement) and has a life of its own. If appropriately worded, it confers jurisdiction on an arbitral tribunal to rule that the underlying contract is void ab initio, and decide the consequences of the contract’s invalidity and unenforceability.

Limits to the Doctrine of Separability

4. The doctrine of separability does not guarantee the survival of an arbitration agreement in the face of attacks against the main contract. It is necessary to consider whether a challenge to the validity of the main contract is also an attack on the arbitration agreement. This is ultimately a question of fact and law.
5. For example, a challenge against the main contract on the ground that the terms in the main contract remained to be agreed would not necessarily undermine the arbitration agreement for purposes of obtaining a stay of court proceedings in favour of arbitration (see the unreported case of Brunel International South East Asia Pte Ltd v Kraig Edward Fogle in HC/RAS 34/2020). But an arbitral tribunal and/or the supervisory court could come to the view that as the agreement was subject to contract and never entered into, this also means that the arbitration agreement is ineffectual as the parties never agreed to arbitrate their dispute (see for e.g.. BCY v BCZ [2017] 3 SLR 357; [2016] SGHC 249).
6. Similarly, the doctrine of separability would not shield the arbitration clause from a challenge that the main contract was invalid for lack of authority or was procured by forgery.
7. A timely reminder of this limitation was provided in the relatively recent Singapore Court of Appeal decision of Founder Group (Hong Kong) Ltd (in liquidation) v Singapore JHC Co Pte Ltd [2023] 2 SLR 554, albeit in the context of a challenge to a winding up application.
8. The brief facts are:…