Tjong Very Sumito and Others v Antig Investments Pte Ltd

JurisdictionSingapore
JudgeChoo Han Teck J
Judgment Date10 November 2008
Neutral Citation[2008] SGHC 202
Docket NumberSuit No 348 of 2008 (Registrar's Appeal No 333 of 2008)
Date10 November 2008
Published date13 November 2008
Year2008
Plaintiff CounselMichael Hwang SC and Charis Tan (instructed) / Nicholas Narayanan (Nicholas & Co)
Citation[2008] SGHC 202
Defendant CounselManjit Singh (Manjit Govind & Partners)
CourtHigh Court (Singapore)
Subject MatterSection 6(2) International Arbitration Act (Cap 143A, 2002 Rev Ed),Mandatory stay under International Arbitration Act (Cap 143A, 2002 Rev Ed),Arbitration,Whether positive assertion of dispute by a party sufficient to stay proceedings,Stay of court proceedings,Whether dispute in fact existed

10 November 2008

Choo Han Teck J:

1 The plaintiffs and the defendant entered into a Shares Sale and Purchase Agreement in November 2004 (“SPA”), under which the plaintiffs agreed to sell to the defendant 72% of the entire paid-up share capital of a company. The SPA also provided that “any and all disputes, controversies or conflicts arising out of or in connection with [the SPA] or its performance shall be settled by arbitration…”. The parties subsequently entered into four supplementary agreements, the last of which was dated 19 August 2005 and provided, inter alia, that:

2.2(e)(ii) on the date falling 24 months from the Completion Date, US$3,700,000 shall be paid to Aventi, who is authorised to receive the same for and on behalf of the Vendors.

2 In late September 2007, Aventi requested for an early settlement of the US$3.7m (the original payment date being 13 June 2008). In return, Aventi granted the defendant a discount of 5.6%. On or about 7 November 2007, the defendant released a sum of some $3.5m to Aventi. This was not the first occasion that the defendant paid Aventi in advance. In July 2006, the defendant was granted a 6% discount for the early settlement of a US$2m payment. On 12 November 2007, the first plaintiff wrote to the defendant stating that:

I have agreed on 29 October 2007 that the final amount of the Balance Purchase Price due to me is US$1,138,772. Kindly issue a cheque for the sum of $1,630,038.24 (equivalent to US$1,138,772), being final settlement of the Balance Purchase Price.

3 On 9 April 2008, the plaintiffs informed the defendant that the sum of US$3.7m was to be made to the first plaintiff, and that no payments should be made to Aventi. The defendant refused to do so. On 20 May 2008, the plaintiffs commenced an action in the High Court to restrain the defendant from effecting payment of the sum of US$3.7m to any party other than the plaintiffs. There was also a claim for damages to be assessed. The defendant then applied for a stay under s 6 of the International Arbitration Act (Cap 143A) (“IAA”) or alternatively under the court’s inherent jurisdiction. The plaintiffs resisted the stay application on the ground that there was “no dispute” and that the defendant had no defence to the plaintiffs’ claim. The matter was heard by an assistant registrar who agreed with the plaintiffs. The defendant’s application for a stay was accordingly dismissed. The defendant then appealed.

The decision of the court

4 The applicable law was not in dispute and counsel for both parties relied on Dalian Hualiang Enterprise Group Co Ltd v Louis Dreyfus Asia Pte Ltd [2005] 4 SLR 646 (“Dalian”). The relevant principles set out in Dalian, were as follows:

As regards s 6(2) IAA, I am of the view that once there is a dispute, a stay must be ordered unless the arbitration agreement is null and void, inoperative or incapable of being performed. The court is not to consider if there is in fact a dispute or whether there is a genuine dispute. The more difficult question is when it can be said that a dispute exists. For example, is there a dispute when the defendant simply refuses to pay or to admit the claim or remains silent? Although there have been statements that suggest that such conduct is sufficient to constitute a dispute I do not share that view. A defendant may refuse to pay or to admit a debt or remain silent because he has no money to pay or simply because he is intransigent. To my mind that is not a dispute. It is different if the defendant at least makes a positive assertion that he is disputing the claim. If he is prepared to and does assert that, then there is a dispute even though it can be easily demonstrated that he is wrong. However, an admission by a defendant will, generally speaking, be contrary to a dispute but not every admission will necessarily avoid a stay order. [emphasis added]

5 The plaintiffs relied on the purported factual similarities with Dalian in resisting the defendant’s application. I was, however, of the view that such reliance was misplaced, as the facts in Dalian are distinguishable from the case at hand. The factual background in Dalian is as follows, at [29] and [30]:

I was of the view that the phrase “any dispute” should also be given a wide interpretation. Nevertheless, it would not cover a dispute unrelated to the transaction covered by the Armonikos contract. For example, if there was a dispute between DHE or DJOM on the one hand and Louis Dreyfus on the other hand under a separate contract which did not have an arbitration agreement, would that dispute be caught by the arbitration agreement in the Armonikos contract? Surely not. Likewise, even if that separate contract had its own arbitration...

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