Pacific King Shipping Pte Ltd and another v Glory Wealth Shipping Pte Ltd
Jurisdiction | Singapore |
Court | High Court (Singapore) |
Judge | Philip Pillai J |
Judgment Date | 07 June 2010 |
Neutral Citation | [2010] SGHC 173 |
Citation | [2010] SGHC 173 |
Date | 07 June 2010 |
Docket Number | Originating Summons No 1369 of 2009 |
Published date | 29 July 2010 |
Defendant Counsel | Bryna Yeo Li Neng and Edwin Tong (Allen & Gledhill LLP) |
Plaintiff Counsel | Kelvin Poon Kin Mun and James Teo Jinyong (Rajah & Tann LLP) |
Hearing Date | 08 December 2009,08 April 2010,15 December 2009 |
Subject Matter | Striking out,Winding up,Companies,Civil Procedure,Stay of proceedings |
The plaintiffs have filed this originating summons for an order that winding up petitions, CWU 168 of 2009 and CWU 169 of 2009, brought by the defendant against the first and second plaintiffs respectively be stayed or struck out.
On or about 26 October 2007, the first plaintiff chartered a vessel from the defendant. Pursuant to a guarantee dated 12 October 2007, the second plaintiff stood as the first plaintiff’s guarantor against the first plaintiff’s obligations to the defendant. On 12 August 2009, the defendant sent the plaintiffs statutory notices of demand for a sum of US$3,986,157.16 as the outstanding sum owing as charter hire under a charter agreement. US$1,326,625.04 of this demand represented an arbitration award issued by the London Tribunal dated 18 December 2008 (then entitled “Interim” but which is now final in its effect) (the “Award”). The first plaintiff has paid US$350,000 of the arbitration award debt under a settlement agreement that has expired and to date US$976,625.04 remains due and outstanding. When the plaintiffs failed to respond satisfactorily to the defendant after three weeks, the defendant proceeded to file winding up petitions CWU 168 of 2009 and CWU 169 of 2009 pursuant to s 254(2)(
The plaintiffs aver that the winding up petitions are an abuse of process because there is a
A winding up petition is not the appropriate means of collecting a disputed debt nor is it to be abused as a means of pressure. The issue before me is whether there is a
In
Nonetheless, the debtor-company does not need to show that the debt does not exist – it merely needs to raise a triable issue. In… the dispute must be bona fide in both a subjective and an objective sense. Thus the reason for not paying the debt must be honestly believed to exist and must be based on substantial or reasonable grounds. 'Substantial' means having substance and not frivolous, which disputes the court should ignore. There must be so much doubt and question about the liability to pay the debt that the court sees that there is a question to be decided. The onus is on the company 'to bring forward a prima facie case which satisfies the court that there is something which ought to be tried either before the court itself or in an action, or by some other proceedings.'
With the applicable principles in mind, I now turn to examining the IAA issue, the Cross-claim issue and the Guarantor’s Liability issue respectively.
The IAA issue The plaintiffs dispute the debt that is founded on the interim arbitration award as being improperly obtained by reason of the alleged failure to observe the rules of natural justice. The defendant, in response, points out that the regularity of the award had been unchallenged at the arbitration and at the courts of the seat of the arbitration. The defendant cited the following authorities:
In international commerce a party who contracts into an agreement to arbitrate in a foreign jurisdiction is bound not only by the local arbitration procedure but also by the supervisory jurisdiction of the courts of the seat of the arbitration. If the award is defective or the arbitration is defectively conducted the party who complains of the defect must in the first instance pursue such remedies as exist under that supervisory jurisdiction. That is because by his agreement to the place in question as the seat of the arbitration he has agreed not only to refer all disputes to arbitration but that the conduct of the arbitration should be subject to that particular supervisory jurisdiction. Adherence to that part of the agreement must, in my judgment, be a cardinal policy consideration by an English court considering enforcement of a foreign award.
… a party may be precluded by his failure to raise a point before the court of supervisory jurisdiction from raising that point before the court of enforcement. This is because failure to raise such a point may amount to an estoppel or a want of bona fides such as to justify the court of enforcement in enforcing an award.
There was nothing thereafter to stop him from challenging the Arbitrator’s preliminary holding in the courts of Arizona or from taking part in the arbitration itself or from challenging the Arbitrator’s final holding in the courts of Arizona. Having chosen not to participate in the proceedings, it really does not lie in Mr Chiew’s mouth to say that he has been deprived of natural justice because the Arbitrator made one finding in his interim award and supplemented that with an...
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