Knowledge & Insights

When a debt that is due and owing arises out of documents which contain an arbitration agreement, should the claimant pursue winding-up proceedings in court or commence an arbitration?

In Founder Group (Hong Kong) Limited (in liquidation) v Singapore JHC Co Pte Ltd [2023] SGCA 40 (Founder Group), the Singapore Court of Appeal clarified the test it had set out in the earlier decision of AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) [2020] 1 SLR 1158 (AnAn) when dealing with a matter where the claimant asserts that it is a creditor of the defendant based on a debt arising out of a contract containing an arbitration agreement, and the defendant disputes that debt or raises a cross-claim arising out of the contract.

Significantly, the Court of Appeal clarified that the test in AnAn is relevant not only to the question whether a winding-up application should be granted, but also to the question whether the claimant has standing as a creditor to bring a winding-up application. The Court of Appeal also made important findings on who is a contingent creditor, and gave guidance on how inconsistent positions taken by parties could adversely impact their arguments on whether the debt is subject to an arbitration agreement (and consequently, subject to the test in AnAn).

This update takes a look at the Court of Appeal’s decision in Founder Group.

If you would like information and/or assistance on the above or any other area of law, you may wish to contact the Partner at WongPartnership whom you normally work with or any of the following Partners:

Adnaan NOOR
Partner – Restructuring & Insolvency and Special Situations Advisory
d +65 6416 2477
e adnaan.noor@wongpartnership.com
Click here to view Adnaan’s CV.

Eden LI
Partner – Restructuring & Insolvency and Special Situations Advisory
d +65 6517 3766
e eden.li@wongpartnership.com
Click here to view Eden’s CV.