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An Assignee's Obligation to Arbitrate and the Principle of Conditional Benefit: Cassa di Risparmio di Parma e Piacenze SpA v Rals International Pte Ltd [2016] 1 SLR 79

Nelson Goh   

(2016) 28 SAcLJ 262

Abstract:
Under the general law of assignment, only benefits of a contract may be transferred from assignor to assignee; burdens do not pass. In Cassa di Risparmio di Parma e Piacenze SpA v Rals International Pte Ltd (“Cariparma v Rals”), the High Court applied the principle of conditional benefit to hold that an assignee is bound to arbitrate a dispute arising from the underlying contract which falls within the scope of the relevant arbitration clause. Cariparma v Rals is significant for a few reasons: it is likely to be the first case in which such an analysis has been applied to an arbitration agreement. Further, this analysis is likely to be adopted by arbitral tribunals in the face of jurisdictional challenges brought by assignees. This note discusses the principle of conditional benefit, its application to arbitration agreements, and its general implications.