The Republic of Mozambique v Credit Suisse International & Ors

Under section 9 of the Arbitration Act 1996, the court must identify each reasonably substantial issue which is capable of constituting a dispute within the arbitration agreement. The inquiry is practical, common-sense and directed to substance rather than pleading form. It must avoid both excessive breadth and undue technicality. A factual allegation forming background to tortious, equitable or conspiracy claims will not necessarily have a sufficient connection with an underlying contract. Where several arbitration clauses and different jurisdiction clauses form part of the context, that may confine the objectively intended scope of each clause. A discrete allegation which seeks no relief may still be a matter for arbitration, but only if sufficiently connected with the relevant contract.

The Republic of Mozambique brought claims concerning alleged bribery, dishonest assistance, knowing receipt, proprietary relief and conspiracy against Credit Suisse entities and Privinvest-related defendants. The Privinvest defendants applied under section 9 of the Arbitration Act 1996 for a stay, contending that the claims, or alternatively the pleaded allegation that the supply contracts were instruments of fraud, fell within arbitration clauses in three supply contracts governed by Swiss law.

By agreement, the court considered only the scope of the arbitration clauses, assuming that the Republic was bound by them. The central issue was whether any matter in the proceedings had a sufficient connection with the supply contracts to fall within those clauses.

1. Application dismissed. The Scope Issue was decided in favour of the Republic. No matter in the proceedings was subject to the arbitration clauses, so no further section 9 issues required trial.
2. Under section 9, the court must identify the matter or matters in respect of which proceedings are brought and determine whether they fall within the arbitration agreement. The inquiry must be practical and common-sense. It must neither characterise the dispute too broadly nor adopt an unduly narrow or pedantic approach. The search is for any reasonably substantial issue capable of constituting a dispute within the clause.
3. The court endorsed the approach in Tomulugen v Silica [2015] SGCA 57 and Sodzawiczny v Ruhan [2018] 2 Lloyds Rep 280. Substance, including reasonably foreseeable issues and defences, matters more than the form of the pleading. The mandatory stay may operate pro tanto, although fragmentation is not itself a reason to enlarge the clause.
4. Applying Swiss law, the arbitration clauses were to be construed objectively, in context, having regard to what reasonable parties acting in good faith would have intended. The principle in favorem arbitri could not override the language and context of the clauses. The existence of multiple arbitration clauses, and related contracts containing English jurisdiction clauses, supported a narrower approach to sufficiency of connection.
5. The bribery, dishonest assistance, knowing receipt, proprietary and conspiracy claims were not sufficiently connected with the supply contracts. The alleged instruments-of-fraud allegation was important background, but it did not infect the claims as a whole. Nor was that allegation itself sufficiently connected: it sought no relief, involved no particular contractual construction, and included matters remote from the contracts.

This was a first-instance decision on the scope issue in an application under section 9 of the Arbitration Act 1996. The court directed that the remaining section 9 issues need not be tried after dismissing the application on scope.