Extending Your Reach To The "Invisible Parties" To The Arbitration Agreement

Aggrieved claimants may sometimes seek to extend their claims not only to the company that agreed to arbitrate disputes – but also to that company's shareholders or ultimate controlling person(s).  Such efforts are usually driven by commercial realities – while the company may be insolvent, or asset-light and liability-heavy, the shareholders or ultimate controlling person(s) may have substantial assets. Even if these parties have not signed the arbitration agreement in question, it may still be possible to join them by "piercing the corporate veil" of the signatory company.

Singapore courts have recognized a tribunal's authority to join shareholders to an arbitration by piercing the corporate veil. In fact, Singapore courts have already enforced awards against parties who did not expressly sign the arbitration agreement. However, these cases have only involved awards rendered by tribunals seated outside of Singapore. Nonetheless, the Singapore courts reasoned that