Piallo GmbH v Yafriro International: Stay of Proceedings & International Arbitration Act

Piallo GmbH, an Austrian company, sued Yafriro International Pte Ltd in the Singapore High Court for several dishonoured cheques. Yafriro successfully applied for a stay of proceedings in favor of arbitration under Section 6(1) of the International Arbitration Act. Belinda Ang Saw Ean J dismissed Piallo's appeal, holding that the claim on the dishonoured cheques fell within the scope of the arbitration agreement in the distributorship agreement between the parties and that there was a dispute between the parties that should be referred to arbitration.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Piallo GmbH sued Yafriro International for dishonoured cheques. The court considered staying proceedings in favor of arbitration under the International Arbitration Act.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Piallo GmbHAppellant, PlaintiffCorporationAppeal DismissedLost
Yafriro International Pte LtdRespondent, DefendantCorporationStay of Proceedings GrantedWon

3. Judges

Judge NameTitleDelivered Judgment
Belinda Ang Saw EanJudgeYes

4. Counsels

Counsel NameOrganization
Peter DoraisamySelvam LLC
Nur Rafizah Binte Mohamed Abdul GaffoorSelvam LLC
Sim ChongJLC Advisors LLP
Loo Chieh Ling KateJLC Advisors LLP

4. Facts

  1. Piallo and Yafriro entered into a distributorship agreement in 2008.
  2. The distributorship agreement contained an arbitration clause.
  3. Piallo terminated the distributorship agreement before the end of its term.
  4. Yafriro issued post-dated cheques to Piallo.
  5. Yafriro subsequently countermanded the cheques.
  6. Piallo sued Yafriro on the dishonoured cheques.
  7. Yafriro applied for a stay of proceedings in favour of arbitration.

5. Formal Citations

  1. Piallo GmbH v Yafriro International Pte Ltd, Suit No 354 of 2013 (Registrar's Appeal No 222 of 2013), [2013] SGHC 260
  2. , , [2013] SGHCR 20

6. Timeline

DateEvent
Distributorship Agreement signed
Piallo purportedly terminated Distributorship Agreement
Yafriro informed Piallo of termination of cheques
Piallo responded to Yafriro regarding cheques
Rajah & Tann sent letter to Selvam LLC summarizing events
Piallo sued Yafriro on dishonoured cheques
Yafriro filed application to stay proceedings
Yafriro submitted request for arbitration
Appeal dismissed
Decision Date

7. Legal Issues

  1. Stay of Proceedings
    • Outcome: The court held that the proceedings should be stayed in favour of arbitration.
    • Category: Procedural
    • Sub-Issues:
      • Applicability of arbitration clause
      • Existence of a dispute
  2. Scope of Arbitration Agreement
    • Outcome: The court held that the claim on the dishonoured cheques fell within the scope of the arbitration agreement.
    • Category: Substantive
    • Sub-Issues:
      • Interpretation of 'arising out of or in connection with'
      • Whether claim on dishonoured cheques falls within scope
  3. Existence of a Dispute
    • Outcome: The court held that there was a dispute between the parties that should be referred to arbitration.
    • Category: Substantive
    • Sub-Issues:
      • Whether there was an unequivocal admission of liability
      • Whether the countermand of cheques constituted a dispute

8. Remedies Sought

  1. Monetary Damages
  2. Stay of Proceedings

9. Cause of Actions

  • Breach of Contract
  • Claim on dishonoured cheques

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Retail
  • Luxury Goods

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Tjong Very Sumito and others v Antiq Investments Pte LtdHigh CourtYes[2009] 4 SLR(R) 732SingaporeCited for the principles applicable to a stay application brought under s 6 of the IAA.
Nova (Jersey) Knit Ltd v Kammgarn Spinnerei GmbHHouse of LordsYes[1977] 1 WLR 713England and WalesCited for the proposition that a claim on bills of exchange is generally not caught by an arbitration clause unless expressly provided for.
Halki Shipping Corporation v Sopex Oils LtdCourt of AppealYes[1998] 1 WLR 726England and WalesCited to distinguish the meaning of 'dispute' in the UK Arbitration Act 1975 from its meaning in the arbitration clause.
Wong Fook Heng v Amixco Asia Pte LtdCourt of AppealYes[1992] 1 SLR(R) 654SingaporeCited for the principle that a bill of exchange is a contract separate from the underlying contract.
CA Pacific Forex Ltd v Lei Kuan IeongHong Kong Court of AppealYes[1999] 2 HKC 571Hong KongConsidered in relation to whether an arbitration clause referring to disputes arising from the underlying agreement applies to bills of exchange.
Fiona Trust & Holding Corporation v PrivalovHouse of LordsYes[2008] 1 Lloyd’s Rep 254England and WalesCited for the modern approach to the construction of arbitration clauses.
Fiona Trust & Holding Corporation v PrivalovCourt of AppealYes[2007] 2 Lloyd’s Rep 267England and WalesCited for the modern approach to the construction of arbitration clauses.
Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore)Court of AppealYes[2011] 3 SLR 414SingaporeCited for the principle that arbitration clauses should be generously construed.
International Research Corporation PLC v Lufthansa Systems Asia Pacific Pte Ltd and anotherCourt of AppealYes[2013] SGCA 55SingaporeCited for the principle that the court is always seeking to ascertain the parties’ objective intentions.
Safa Ltd v Banque du CaireCourt of AppealYes[2000] 2 Lloyd’s Rep 600England and WalesCited to show that a letter of credit is similar to a bill of exchange.
Getwick Engineers Ltd v Pilecon Engineering LtdHigh CourtYes[2002] HKCFI 189Hong KongCited for the proposition that a cheque may constitute a clear and unequivocal admission of liability and quantum.

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

  • Distributorship Agreement
  • Arbitration Clause
  • Dishonoured Cheques
  • Stay of Proceedings
  • International Arbitration Act
  • Misrepresentation
  • Estoppel

15.2 Keywords

  • arbitration
  • stay of proceedings
  • international arbitration act
  • dishonoured cheques
  • distributorship agreement

17. Areas of Law

Area NameRelevance Score
Arbitration90
Distributorship Agreement80
Breach of Contract75
Contract Law70
Dishonoured Cheques65
Commercial Law60
Commercial Disputes50
Estoppel40
Misrepresentation35

16. Subjects

  • Arbitration
  • Contract Law
  • Civil Procedure