DOES FAILURE TO COMPLY WITH MANDATORY PRE-ARBITRAL STEPS ENGAGE AN ARBITRAL TRIBUNAL'S JURISDICTION OR ADMISSIBILITY?
Does failure to comply with mandatory pre-arbitral steps engage an arbitral tribunal’s jurisdiction or admissibililty? The Singapore High Court in DRO v DRP [2025] SGHC 255 settles the debate.
In DRO v DRP [2025] SGHC 255 (“DRO”), the Singapore High Court considered a familiar argument raised in arbitration jurisdiction challenges: a party cannot commence arbitration because it failed to comply with mandatory contractual pre-arbitral steps.
Background. The dispute arose out of a construction contract.
The contract contained the multi-tier arbitration clause:
“25.1 All disputes … which cannot be settled amicably shall be finally settled by arbitration in accordance with UNCITRAL Arbitration Rules …
…
25.7 Notwithstanding the above, any dispute between the PARTIES shall, in the first place, be submitted by the PARTIES to their respective project management level for resolution, failing which the dispute shall then be referred to their respective senior management level.” (emphasis added)
The respondent commenced arbitration seeking payment for works performed. In the arbitration proceedings, the applicant challenged the tribunal’s jurisdiction on the basis that the prescribed pre-arbitral steps had not been properly complied with.
After the tribunal rejected the challenge, the applicant applied to the High Court under section 10(3)(a) of the International Arbitration Act (the “IAA”), which allows the court to determine jurisdictional challenges de novo.
The Court’s reasoning. The court rejected that argument. On a proper interpretation of clause 25.1, the Court held that a failure to comply with mandatory procedural steps under clause 25.7 did not affect the tribunal’s jurisdiction, but raised a question of admissibility, which is for the arbitral tribunal to determine.
As intimated above, the central issue before the court was whether non-compliance with the pre-arbitral steps affected the tribunal’s jurisdiction or merely the admissibility of the claim.
Arbitration practitioners will undoubtedly know that this distinction is significant. Whereas jurisdiction concerns whether the tribunal has the power to hearing the dispute, admissibility concerns whether the dispute is procedurally ready to be heard. Under s.10 of the IAA, only jurisdiction issues are reviewable by the court.
At [63], the court expressly held that pre-arbitral procedural requirements generally concern admissibility rather than jurisdiction. The material passage is reproduced below:
“63 In my view, a precondition to arbitration is a matter that goes to admissibility and not jurisdiction. ...”
10. In reaching this conclusion, the court relied on the conceptual distinction recognised in Singapore case laws (see [18] of the judgment), referring to the following Singapore cases: Swissbourgh Diamond Mines (Pty) Ltd v Kingdom of Lesotho [2019] 1 SLR 263; BBA v BAZ [2020] 2 SLR 453; BTN v BTP [2021] 1 SLR 276) and on the international consensus reflected in arbitration scholarship and foreign authorities (see [62] of the judgment).
The (in)significance of mandatory language in pre-arbitral steps. The gravamen of the applicant’s case was that clause 25.7 used mandatory language (using the word “shall”), making the submission of disputes to management levels a condition precedent to the commencement of arbitration.
At [69], the Court clarified that clear words are necessary to create a condition precedent to the commencement of arbitration.
In relation to clauses 25.1 and 25.7 , the Court explained that the commencement of arbitration under clause 25.1 was not dependent on clause 25.7, such that the use of mandatory language in 25.7 rendered the commencement a condition precedent (see [71] – [72] of the judgment).
This was because clause 25.1 enabled the parties to commence arbitration where the disputes could not “be settled amicably”, as opposed to where clause 25.7 has been strictly complied with.
The tribunal therefore retained jurisdiction over the dispute.
Practical implications. The decision provides several important lessons for parties drafting and invoking pre-arbitral steps.
First, pre-arbitral steps usually concern admissibility. Disputes over pre-arbitral steps will be treated as matters for the arbitral tribunal, not the courts.
Second, clear and tight drafting is required to ensure that pre-arbitral steps operate as condition precedent, such that they are treated as a matter of jurisdiction.
This publication is not intended to be, nor should it be taken as, legal advice; it is not a substitute for specific legal advice for specific circumstances. You should not take, nor refrain from taking, actions based on this publication. Chancery Law Corporation is not responsible for, and does not accept any responsibility for, any loss or damage that may arise from any reliance based on this publication.