Insights and Analysis

Singapore Court of Appeal ruling opens way for Hong Kong decision on arbitration/winding-up priority

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A recent Singapore Court of Appeal decision has again highlighted the different approaches taken by courts when dealing with winding-up proceedings concerning a disputed debt where an arbitration clause covers the debt in question.

In AnAn Group (Singapore) Pte Ltd v. VTB Bank (Public Joint Stock Company) [2020] SGCA 33 (AnAn), the Singapore Court of Appeal confirmed that in respect of a winding up application grounded on a debt which is subject to arbitration, the court should generally stay or dismiss a winding up application where there is a dispute in relation to the debt.
 
The move - which tips Singapore firmly towards the "pro-arbitration" side of the debate, at the risk of the public being exposed to insolvent companies continuing to trade for longer - also raises the issue of when the Hong Kong courts will finally address head-on an issue that has caused heated debate since the first instance decision of the Honourable Mr. Justice Harris in Lasmos Limited v. Southwest Pacific Bauxite (HK) Limited [2018] HKCFI 426.
 
Hong Kong court decisions since Lasmos have criticised the approach taken in striking obiter remarks, leading the Singapore Court of Appeal to describe the position in Hong Kong as "unsettled."

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Authored by Jonathan Leitch, Eugene Tan, and Nigel Sharman.

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