Terraform Fails to Block Class Action Lawsuit in Singapore Court
However, the court found that the terms of use were not sufficiently conspicuous and that Terraform had not taken reasonable steps to inform users of the arbitration clause.
A class action lawsuit against Terraform Labs and its co-founders, Do Kwon and Nikolaos Alexandros Platias, will proceed in the Singapore High Court. The court dismissed Terraform's appeal to move the proceedings to arbitration, finding that the company had waived its right to arbitration by engaging in the litigation, Business Times reported on Thursday.
The lawsuit alleges that Terraform engaged in fraudulent misrepresentation that induced investors to purchase and hold UST tokens, which subsequently lost most of their value. The claimants are seeking damages of over US$57 million.
Terraform had argued that the terms of use on its website contain an arbitration clause that requires disputes to be resolved in arbitration rather than in court. However, the court found that the terms of use were not sufficiently conspicuous and that Terraform had not taken reasonable steps to inform users of the arbitration clause.
The court also found that Terraform had already accepted the jurisdiction of the Singapore court by filing a defense on the merits of the suit and seeking substantive remedies.
As a result of the court's decision, the class action lawsuit will now proceed to the merits. This means that the court will hear evidence from both sides and ultimately decide whether Terraform is liable for the claimants' losses.
