Where a debtor raises a prima facie dispute over a debt subject to an arbitration agreement, the court will ordinarily dismiss or stay a winding-up application without assessing the merits — unless the dispute is raised in abuse of process. That exception, however, has until now lacked a precise framework. Where a debtor has previously admitted a debt, but subsequently resiles from that admission and seeks to dispute it, can it invoke an arbitration agreement to resist winding-up proceedings?
In Singapore Commodities Group Co Pte Ltd v Founder Group (Hong Kong) Ltd (in liquidation) [2026] SGCA 24 (SG Commodities (No 2)), the Singapore Court of Appeal considered this further dimension of the abuse of process exception. The apex court set out a structured two-stage test for when a debtor’s change of position will cross the line into abuse of process: first, there must be a clear and unequivocal admission of liability and quantum of the debt, and second, the debtor must have resiled from the admission without a “clear and convincing reason”.
This update takes a look at the decision in SG Commodities (No 2).
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:
Smitha MENON
Head – Restructuring & Insolvency
Partner – Special Situations Advisory
d +65 6416 8129
e smitha.menon@wongpartnership.com
Click here to view Smitha’s CV.
Joel CHNG
Partner – Restructuring & Insolvency and Special Situations Advisory
d +65 6517 8707
e joel.chng@wongpartnership.com
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Daniel LIU
Partner – Restructuring & Insolvency and Special Situations Advisory
d +65 6416 2470
e zhaoxiang.liu@wongpartnership.com
Click here to view Daniel’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.
Clayton CHONG
Partner – Restructuring & Insolvency and Special Situations Advisory
d +65 6416 2472
e clayton.chong@wongpartnership.com
Click here to view Clayton’s CV.