Piallo GmbH v Yafriro International: Stay of Proceedings for Arbitration

Piallo GmbH, an Austrian company, sued Yafriro International Pte Ltd, a Singaporean company, for outstanding payments related to a distributorship agreement. Yafriro applied for a stay of proceedings in favor of arbitration under the International Arbitration Act. The High Court of Singapore, presided over by Assistant Registrar Delphine Ho, granted the stay, finding that a valid arbitration agreement existed and that the dispute fell within its scope. The court determined that Yafriro's countermanding of payment on post-dated cheques constituted a dispute referable to arbitration.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Stay of proceedings granted in favour of arbitration.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Application for stay of proceedings in favor of arbitration granted. The court found a valid arbitration agreement and a dispute related to the distributorship agreement.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Piallo GmbHPlaintiffCorporationStay of proceedings grantedLost
Yafriro International Pte LtdDefendantCorporationStay of proceedings grantedWon

3. Judges

Judge NameTitleDelivered Judgment
Delphine HoAssistant RegistrarYes

4. Counsels

Counsel NameOrganization
Rafizah GaffoorSelvam LLC
Peter DoraisamySelvam LLC
Sim ChongJLC Advisors LLP

4. Facts

  1. Plaintiff and Defendant entered into a distributorship agreement in 2008.
  2. Plaintiff supplied DELACOUR products to the Defendant.
  3. Defendant made part payment with 15 post-dated cheques.
  4. Defendant countermanded payment on all the cheques.
  5. Plaintiff commenced proceedings seeking the total value of all 15 cheques.
  6. Defendant 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 (Summons No 2423 of 2013), [2013] SGHCR 20

6. Timeline

DateEvent
Distributorship Agreement signed
Plaintiff supplied DELACOUR Products to the Defendant
Plaintiff supplied DELACOUR Products to the Defendant
Defendant proffered part payment with 15 post-dated cheques
Defendant informed Plaintiff it would countermand payment on all cheques
Plaintiff responded to Defendant's letter
Plaintiff commenced proceedings
Judgment reserved

7. Legal Issues

  1. Stay of Proceedings
    • Outcome: The court granted a stay of proceedings in favour of arbitration.
    • Category: Procedural
  2. Scope of Arbitration Clause
    • Outcome: The court found that it was possible that the Plaintiff’s claim fell within the terms of the arbitration agreement.
    • Category: Substantive
  3. Existence of a Dispute
    • Outcome: The court found that the Defendant's act of countermanding the cheques was evidence of a dispute between the parties.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Retail
  • Luxury Goods

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Tjong Very Sumito & Ors v. Antig Investments Pte LtdCourt of AppealYes[2009] 4 SLR(R) 732SingaporeCited for the principles governing the grant of a stay under Section 6 of the International Arbitration Act.
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 separate contract from the underlying contract.
Nova (Jersey) Knit Ltd v. Kammgarn Spinnerei GmbHHouse of LordsYes[1977] 1 WLR 714England and WalesCited for the principle that a claim on bills of exchange falls outside the scope of an arbitration clause in the underlying contract, unless expressly stated otherwise.
Pacific Forex Ltd v. Lei Kuan LeongHong Kong Court of AppealYes[1999] HKCA 364Hong KongCited for adopting the principle in Nova that an arbitration clause referring to disputes arising from the underlying agreement does not apply to bills of exchange unless there is a plain manifestation in the arbitration clause.
China Overseas Building Construction Ltd v. Profit National Development Ltd & OrsHong Kong Court of First InstanceYes[2005] HKEC 836Hong KongCited for following the decision in Pacific Forex.
China Overseas Building Construction Ltd v. True Gold Investments Ltd & OrsHong Kong Court of First InstanceYes[2005] HKEC 853Hong KongCited for following the decision in Pacific Forex.
Getwick Engineers Limited v. Pilecon Engineering LimitedUnknownYes[2002] KCFI 189UnknownCited for the principle that a dishonoured cheque can be regarded as a clear and unequivocal admission of liability and quantum, but only in limited circumstances.
Dalian Hualiang Enterprise Group Co Ltd & Anor v. Louis Dreyfus Asia Pte LtdHigh CourtYes[2005] 4 SLR(R) 646SingaporeCited for the principle that the court's jurisdiction to grant a stay under Section 6(2) of the IAA only arises if the subject matter of the court proceedings is also the subject of the arbitration agreement.
Lien Chung Credit & Leasing Sdn Bhd v. Chang Chin ChoiHigh CourtYes[1994] 3 MLJ 488MalaysiaCited for the observation that a post-dated cheque has no value as it does not represent any property that a creditor could resort to in the event he wanted to realise or recover the debt.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A)Singapore
Supreme Court of Judicature Act (Cap 322)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Arbitration
  • Stay of Proceedings
  • Distributorship Agreement
  • Post-dated Cheques
  • International Arbitration Act

15.2 Keywords

  • arbitration
  • stay of proceedings
  • distributorship agreement
  • post-dated cheques
  • international arbitration act
  • Singapore
  • High Court

17. Areas of Law

Area NameRelevance Score
International Arbitration Act75
International Arbitration Law75
International Arbitration75
International Commercial Arbitration75
Arbitration75
Distributorship Agreement70
Contract Law60
Breach of Contract60
Contracts60
International Commercial Law50
Commercial Law50
Bills of Exchange40
Summary Judgement30
Submission to Jurisdiction25
Enforcement of Foreign Judgments25
Enforcement of Foreign Arbitral Awards25
International Trade Law25
UNCITRAL Model Law25

16. Subjects

  • Arbitration
  • Contract Law
  • Civil Procedure