Tjong Very Sumito v Antig Investments: Stay of Proceedings & International Arbitration Act

In Tjong Very Sumito and Others v Antig Investments Pte Ltd, the Singapore Court of Appeal, presided over by Andrew Phang Boon Leong JA and V K Rajah JA, addressed an appeal concerning the stay of court proceedings in favor of arbitration under the International Arbitration Act. The appellants, Tjong Very Sumito, Iman Haryanto, and Herman Aries Tintowo, had entered into a Shares Sale and Purchase Agreement (SPA) with the respondent, Antig Investments Pte Ltd, which included an arbitration clause. The dispute arose over payments related to the SPA, with the appellants claiming that the respondent had not properly settled the balance purchase price. The Court of Appeal dismissed the appeal, ordering indemnity costs against the appellants, reinforcing the pro-arbitration stance and emphasizing that a mere assertion of a dispute is sufficient for a stay of proceedings.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal dismissed with indemnity costs.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The Court of Appeal addressed whether a stay of proceedings should be granted under the International Arbitration Act. The court emphasized judicial policy towards arbitration.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Tjong Very SumitoAppellantIndividualAppeal DismissedLostHri Kumar Nair, Wong Chin Soon Wilson, Sree Govind Menon
Iman HaryantoAppellantIndividualAppeal DismissedLostHri Kumar Nair, Wong Chin Soon Wilson, Sree Govind Menon
Herman Aries TintowoAppellantIndividualAppeal DismissedLostHri Kumar Nair, Wong Chin Soon Wilson, Sree Govind Menon
Antig Investments Pte LtdRespondentCorporationAppeal DismissedWonMichael Hwang, Charis Tan En Pin, Nicholas Jeyaraj s/o Narayanan

3. Judges

Judge NameTitleDelivered Judgment
Andrew Phang Boon LeongJustice of the Court of AppealNo
V K RajahJustice of the Court of AppealYes

4. Counsels

Counsel NameOrganization
Hri Kumar NairDrew Napier LLC
Wong Chin Soon WilsonDrew Napier LLC
Sree Govind MenonManjit Govind & Partners
Michael HwangChambers of Michael Hwang SC
Charis Tan En PinChambers of Michael Hwang SC
Nicholas Jeyaraj s/o NarayananNicholas & Co

4. Facts

  1. The appellants and the respondent entered into a Shares Sale and Purchase Agreement (SPA) on 23 November 2004.
  2. The SPA contained an arbitration clause requiring disputes to be resolved by arbitration in Singapore under SIAC Rules.
  3. Between 3 January 2005 and 19 August 2005, the parties entered into four supplemental agreements to the SPA.
  4. The Fourth Supplemental Agreement (Fourth SSPA) varied the payment terms of the purchase consideration.
  5. The Fourth SSPA provided for payment of US$3.7m to Aventi Holdings Limited (Aventi).
  6. Aventi requested early settlement of the US$2m and US$3.7m at a discount, which the respondent agreed to without notifying the appellants.
  7. The appellants commenced proceedings for an injunction and damages, claiming the respondent should have paid the US$3.7m to them.

5. Formal Citations

  1. Tjong Very Sumito and Others v Antig Investments Pte Ltd, CA 171/2008, Suit 348/2008, [2009] SGCA 41

6. Timeline

DateEvent
Shares Sale and Purchase Agreement (SPA) entered into
Supplemental Agreement (SSPA) dated
Second Supplemental Agreement (Second SSPA) dated
Third Supplemental Agreement (Third SSPA) dated
Fourth Supplemental Agreement (Fourth SSPA) dated
Completion Date of the SPA
Aventi requested early settlement of US$2m
Aventi requested early settlement of US$3.7m
Mr. Sumito requested final settlement of the Balance Purchase Price
Magnus announced settlement of balance purchase price
Appellants' solicitors notified respondent to pay US$3.7m to appellants
Appellants' solicitors sent a reminder
Appellants' solicitors gave notice of court proceedings
Appellants commenced court proceedings
Respondent's solicitors replied to the appellants
Appellants' solicitors replied to the respondent
Respondent entered appearance
Respondent applied for a stay of court proceedings
Assistant Registrar dismissed the respondent’s stay application
Respondent’s appeal was allowed by Choo Han Teck J
Decision Date

7. Legal Issues

  1. Stay of Court Proceedings
    • Outcome: The court held that the proceedings should be stayed in favor of arbitration.
    • Category: Procedural
    • Sub-Issues:
      • Application of International Arbitration Act
      • Interpretation of arbitration agreement
  2. Existence of a Dispute
    • Outcome: The court held that a dispute existed, warranting a stay of proceedings.
    • Category: Substantive
    • Sub-Issues:
      • What constitutes a dispute
      • Significance of admission by defendant
      • Significance of silence or prevarication on part of defendant
  3. Costs
    • Outcome: The court ordered indemnity costs against the appellants.
    • Category: Procedural
    • Sub-Issues:
      • Whether indemnity costs should be ordered
      • Breach of arbitration clause

8. Remedies Sought

  1. Injunction
  2. Monetary Damages

9. Cause of Actions

  • Breach of Contract
  • Injunction

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Finance
  • Investment

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Tjong Very Sumito v Antig Investments Pte LtdHigh CourtYes[2009] 1 SLR 861SingaporeCited as the judgment under appeal, where the judge allowed the respondent's appeal for a stay of proceedings in favour of arbitration.
Dalian Hualiang Enterprise Group Co Ltd v Louis Dreyfus Asia Pte LtdHigh CourtYes[2005] 4 SLR 646SingaporeCited for the principle that a positive assertion by the defendant disputing the claim suffices for a stay of proceedings under s 6(2) of the IAA, even if the defendant is wrong.
Halki Shipping Corporation v Sopex Oils LtdCourt of AppealYes[1998] 1 WLR 726EnglandCited for the proposition that a dispute exists once money is claimed unless the defendants admit that the sum is due and payable.
A v B (No 2)N/AYes[2007] 1 Lloyd’s Rep 358EnglandCited for the principle that a party breaching an arbitration agreement should bear the full legal costs reasonably incurred by the innocent party, typically on an indemnity basis.
The Dai Yun ShanHigh CourtYes[1992] 2 SLR 508SingaporeCited in relation to the general definition of dispute requiring a claim by one party and its rejection by the other.
Coop International Pte Ltd v Ebel SACourt of AppealYes[1998] 3 SLR 670SingaporeCited in relation to the general definition of dispute requiring a claim by one party and its rejection by the other.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte LtdCourt of AppealYes[2007] 3 SLR 86SingaporeCited to show that the courts have a wider role and broader judicial latitude in domestic arbitration.
Nigel Peter Albon v Naza Motor Trading Sdn Bhd (No 3)High CourtYes[2007] EWHC 665 (Ch)England and WalesCited for the position that it is the court that determines whether the arbitration agreement applies.
Baltimar Aps Ltd v Nalder & Biddle LtdHigh CourtYes[1994] 3 NZLR 129New ZealandCited by the appellants, but the court notes that the New Zealand court declined to adopt the pre-1996 English position.
Uni-Navigation Pte Ltd v Wei Loong Shipping Pte LtdHigh CourtYes[1993] 1 SLR 876SingaporeCited by the appellants, but the court notes that it was a case falling within the ambit of the Arbitration Act (not the IAA).
Kwan Im Tong Chinese Temple v Fong Choon Hung Construction Pte LtdCourt of AppealYes[1998] 2 SLR 137SingaporeCited by the appellants, but the court notes that it was a case falling within the ambit of the Arbitration Act (not the IAA).
The Jian HeHigh CourtYes[2000] 1 SLR 8SingaporeCited by the appellants, but the court notes that it involved a stay of proceedings on the ground of an exclusive jurisdiction clause (not a stay in favour of arbitration).
Hayter v Nelson Home Insurance CoHigh CourtYes[1990] 2 Lloyd’s Rep 265EnglandCited for the principle that there is a dispute until the defendant admits that the sum is due and payable.
Ellerine Brothers (Pty.) Ltd. v. KlingerCourt of AppealYes[1982] 1 WLR 1375EnglandCited for the principle that there is a dispute until the defendant admits that the sum is due and payable.
Getwick Engineers Limited v Pilecon Engineering LimitedN/AYes[2002] 1020 HKCU 1Hong KongCited as an example of cases decided under the Model Law where it has been assumed that an admission of liability prevents any dispute from arising.
Halki Shipping Corporation v Sopex Oils LtdCourt of AppealYes[1997] 1 WLR 1268EnglandCited for the analysis of an “admission” is also unsatisfactory if one construes “dispute” to mean “unsatisfied claim”, regardless of whether liability is admitted.
Glencore Grain Ltd v Agros Trading Co LtdN/AYes[1999] 2 All ER (Comm) 288EnglandCited for the principle that if the arbitration clause is in Scott v. Avery form, an admitted liability does not prevent a dispute from arising.
Sabah Shipyard (Pakistan) Ltd v Government of the Islamic Republic of PakistanCourt of AppealYes[2004] 3 SLR 184SingaporeCited for the principle that the phrase “arising out of or in connection with” has a wide ambit that extends to all manner of issues that have a relationship with the SPA.
Amec Civil Engineering Limited v The Secretary of State for TransportHigh CourtYes[2004] EWHC 2339England and WalesCited for the principle that a failure by a party to respond is equivocal, especially when there are unresolved issues or there has been earlier prevarication.
Amec Civil Engineering Ltd v Secretary of State for TransportCourt of AppealYes[2005] 1 WLR 2339England and WalesCited for the principle that a failure by a party to respond is equivocal, especially when there are unresolved issues or there has been earlier prevarication.
Collins (Contractors) Ltd v Baltic Quay Management (1994) LtdCourt of AppealYes[2005] BLR 63United KingdomCited for the principle that a failure by a party to respond is equivocal, especially when there are unresolved issues or there has been earlier prevarication.
Halvanon Insurance Co Ltd v Companhia de Seguros do Estado de Sao PauloN/AYes[1995] LRLR 303N/ACited for the principle that a successfully-resisted stay application under s 6(1) of the IAA on the grounds of admission (as opposed to s 6(2) or where the arbitration clause was inoperative because one of the parties had lost the right to refer a matter to arbitration.
Louis Dreyfus v. Bonarich International (Group) LimitedN/AYes[1997] 3 HKC 597Hong KongCited for the principle that a dispute will exist unless there has been a clear and unequivocal admission not only of liability but also quantum.
Tai Hing Cotton Mill Limited v. Glencore Grain Rotterdam BVN/AYes[1996] 1 HKC 363Hong KongCited for the principle that a dispute will exist unless there has been a clear and unequivocal admission not only of liability but also quantum.
Glencore Grain Ltd v Agros Trading CoN/AYes[1999] 2 Lloyd’s Rep 410N/ACited for the principle that there must be an admission as to both liability and quantum before a dispute ceases to be a dispute.
Gulf Canada Resources Ltd v Avochem International LtdCourt of AppealYes66 BCLR (2d) 114British ColumbiaCited for examples of circumstances in which a stay of court proceedings will not be granted.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Stay of Proceedings
  • International Arbitration Act
  • Dispute
  • Shares Sale and Purchase Agreement
  • SPA
  • Fourth Supplemental Agreement
  • Aventi
  • Indemnity Costs

15.2 Keywords

  • Arbitration
  • Stay of Proceedings
  • International Arbitration Act
  • Dispute
  • Contract
  • Singapore

16. Subjects

  • Arbitration
  • Civil Procedure
  • Contract Law

17. Areas of Law

  • Arbitration Law
  • Civil Procedure
  • International Arbitration Law
  • Contract Law