Pacific King Shipping v Glory Wealth Shipping: Stay of Winding Up Petition
Pacific King Shipping Pte Ltd and another (plaintiffs) filed an originating summons in the High Court of Singapore to stay or strike out winding up petitions brought by Glory Wealth Shipping Pte Ltd (defendant). The defendant sought to wind up the plaintiffs based on a debt arising from a London arbitration award. Pillai J dismissed the plaintiffs' application, finding no bona fide dispute on substantial grounds regarding the debt. The court held that a winding up application is not an enforcement of arbitration awards.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Plaintiffs' application to stay or strike out the winding up petitions filed by the defendant is dismissed.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
The High Court dismissed an application to stay winding up petitions, finding no bona fide dispute over a debt based on an arbitration award.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Pacific King Shipping Pte Ltd | Plaintiff | Corporation | Application Dismissed | Lost | Kelvin Poon Kin Mun, James Teo Jinyong |
| Glory Wealth Shipping Pte Ltd | Defendant | Corporation | Application to Stay Winding Up Petition Dismissed | Won | Bryna Yeo Li Neng, Edwin Tong |
| another | Plaintiff | Other | Application Dismissed | Lost | Kelvin Poon Kin Mun, James Teo Jinyong |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Philip Pillai | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Kelvin Poon Kin Mun | Rajah & Tann LLP |
| James Teo Jinyong | Rajah & Tann LLP |
| Bryna Yeo Li Neng | Allen & Gledhill LLP |
| Edwin Tong | Allen & Gledhill LLP |
4. Facts
- First plaintiff chartered a vessel from the defendant.
- Second plaintiff guaranteed the first plaintiff’s obligations.
- Defendant sent statutory notices of demand for outstanding charter hire.
- The demand included an arbitration award.
- Plaintiffs claimed the winding up petitions were an abuse of process.
- Plaintiffs alleged a bona fide dispute on substantial grounds.
5. Formal Citations
- Pacific King Shipping Pte Ltd and another v Glory Wealth Shipping Pte Ltd, Originating Summons No 1369 of 2009, [2010] SGHC 173
6. Timeline
| Date | Event |
|---|---|
| Guarantee dated | |
| First plaintiff chartered a vessel from the defendant | |
| Arbitration award issued by the London Tribunal | |
| Defendant sent the plaintiffs statutory notices of demand | |
| Affidavit of Huang Yingjun, a director of the first plaintiff, dated | |
| Judgment reserved |
7. Legal Issues
- Enforceability of Arbitration Award
- Outcome: The court held that the winding up application is not regarded as an enforcement of arbitration awards.
- Category: Substantive
- Sub-Issues:
- Breach of natural justice
- Award issued on a basis not raised by parties
- Bona Fide Dispute of Debt
- Outcome: The court found no bona fide dispute on substantial grounds regarding the debt.
- Category: Substantive
- Sub-Issues:
- Existence of cross-claim
- Guarantor's liability
- Guarantor's Liability
- Outcome: The court held that the statutory demand against the second plaintiff was based on the first plaintiff's failure to pay hire and sums due under the hire statements, with the reference to the arbitration award being ancillary.
- Category: Substantive
8. Remedies Sought
- Stay of Winding Up Petition
- Strike Out of Winding Up Petition
9. Cause of Actions
- Breach of Contract
- Guarantee
10. Practice Areas
- Winding Up
- Commercial Litigation
- Arbitration
11. Industries
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| BNP Paribas v Jurong Shipyard Pte Ltd | Court of Appeal | Yes | [2009] 2 SLR(R) 949 | Singapore | Cited for the principle that a creditor is prima facie entitled to a winding-up order when a company is unable to pay its debts, but the court retains discretion in exceptional cases. |
| LKM Investment Holdings Pte Ltd v Cathay Theatres Pte Ltd | N/A | Yes | [2000] 1 SLR(R) 135 | Singapore | Cited for the principle that a dispute must be bona fide in both a subjective and objective sense to warrant staying or striking out a winding up petition. |
| Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal | Court of Appeal | Yes | [2008] 2 SLR(R) 491 | Singapore | Cited for the applicable standard for determining the existence of a substantial and bona fide dispute. |
| Minmetals Germany GmbH v Ferco Steel Ltd | N/A | Yes | [1999] CLC 647 | N/A | Cited for the principle that a party who contracts into an agreement to arbitrate in a foreign jurisdiction is bound by the local arbitration procedure and the supervisory jurisdiction of the courts of the seat of the arbitration. |
| Aloe Vera of America, Inc v Asianic Food (S) Pte Ltd and another | N/A | Yes | [2006] 3 SLR(R) 174 | Singapore | Cited for the principle that a party may be precluded from raising a point before the court of enforcement if they failed to raise it before the court of supervisory jurisdiction. |
| Kanoria v Guinness | England and Wales Court of Appeal (Civil Division) | No | [2006] EWCA Civ 222 | England and Wales | Cited in relation to the argument that the rules of natural justice were not adhered to in obtaining the award. |
| Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd | N/A | Yes | [2007] 3 SLR(R) 86 | Singapore | Cited for the approach of the courts to be circumspect in upholding the integrity of the arbitration process. |
| Re International Tin Council | N/A | Yes | [1987] Ch 419 | N/A | Cited for the principle that a winding up application is not regarded as an enforcement of arbitration awards. |
| Malayan Plant (Pte) Ltd v Moscow Narodny Bank Ltd | N/A | Yes | [1979 – 1980] SLR(R) 511 | Singapore | Cited for the principle that a cross-claim of substance constitutes a proper ground upon which to reject a winding-up petition. |
| Metalform Asia Pte Ltd v Holland Leedon Pte Ltd | N/A | Yes | [2007] 2 SLR(R) 268 | Singapore | Cited for the principle that a debtor-company may rely on a cross-claim against its creditor to seek a striking out or stay of winding up proceeding. |
| Re L.H.F. Wools Ltd | Court of Appeal | Yes | [1970] 1 Ch 27 | N/A | Cited for the principle that when a debtor-company has a genuine and serious cross-claim against the petitioning creditor which it has not reasonably been able to litigate, the petition should be usually dismissed or stayed. |
| Paganelli Sdn Bhd v Care-Me Direct Sales Sdn Bhd | Malaysian High Court | No | [1999] 2 MLJ 464 | Malaysia | Cited for the implications of a stay against a winding up petition. |
| Re Makin Nominees Pte Ltd | N/A | Yes | [1994] 2 SLR(R) 848 | Singapore | Cited for the principle that the presumption of insolvency under s 254(2)(a) of the Companies Act operates so long as the debtor does not pay a sum which is not in dispute and that sum exceeds the minimum prescribed therein. |
| PT Jaya Sumpiles Indonesia and another v Kristle Trading Ltd and another | N/A | Yes | [2009] 3 SLR(R) 689 | Singapore | Cited for the proposition that an award against a principal debtor is not binding on a guarantor in an action by the creditor against the guarantor based on the award. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
| Companies Act | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding Up Petition
- Statutory Demand
- Arbitration Award
- Charter Hire
- Guarantee
- Bona Fide Dispute
- Cross-claim
- Guarantor's Liability
- Insolvency
15.2 Keywords
- winding up
- arbitration
- shipping
- guarantee
- insolvency
16. Subjects
- Insolvency
- Arbitration
- Shipping Law
- Company Law
17. Areas of Law
- Insolvency Law
- Arbitration Law
- Company Law