HKL Group Co Ltd v Rizq International Holdings Pte Ltd: Stay of Proceedings & Arbitration Clause Interpretation
In HKL Group Co Ltd v Rizq International Holdings Pte Ltd, the Singapore High Court addressed an application by Rizq International Holdings Pte Ltd for a stay of proceedings in favor of arbitration based on a defective arbitration clause. HKL Group Co Ltd resisted, arguing the clause's inoperability and the absence of a dispute. The court, while acknowledging the clause's defects, upheld the parties' intention to arbitrate, granting the stay conditional on securing an agreement from a Singaporean arbitral institution to conduct a hybrid arbitration applying ICC rules. HKL's application for default judgment was dismissed.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Proceedings stayed in favour of arbitration, conditional on parties securing agreement from an arbitral institution in Singapore to conduct a hybrid arbitration applying the ICC rules. Application for default judgment dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Stay of proceedings granted in favor of arbitration. The court interpreted a defective arbitration clause, emphasizing the parties' intent to arbitrate.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| HKL Group Co Ltd | Plaintiff | Corporation | Application for default judgment dismissed | Dismissed | Kendall Tan, Daniel Liang |
| Rizq International Holdings Pte Ltd | Defendant | Corporation | Proceedings stayed in favour of arbitration | Stayed | Hussainar Bin K Abdul Aziz |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Jordan Tan | Assistant Registrar | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Kendall Tan | Rajah & Tann LLP |
| Daniel Liang | Rajah & Tann LLP |
| Hussainar Bin K Abdul Aziz | H.A. & Chung Partnership |
4. Facts
- HKL and Rizq Singapore entered into an agreement for the sale of sand.
- Rizq Singapore was to pay HKL immediately upon receipt of payment from Samsung.
- The parties agreed that Rizq Singapore would pay HKL within 24 hours of receipt of Samsung’s payment.
- HKL claimed for unpaid invoices.
- Rizq Singapore argued that liabilities were back to back with Samsung.
- The arbitration clause referred to a non-existent "Arbitral Committee at Singapore."
5. Formal Citations
- HKL Group Co Ltd v Rizq International Holdings Pte Ltd, Suit No 972 of 2012/P (Summons No 6427 of 2012/J and Summons No 70 of 2013), [2013] SGHCR 5
6. Timeline
| Date | Event |
|---|---|
| Agreement signed between HKL and Rizq Singapore for the sale of sand. | |
| Shipments made pertaining to the first to fourth invoices. | |
| Letter agreement regarding back to back liabilities. | |
| Shipment made pertaining to the fifth invoice. | |
| Joint letter specifying payment terms within 24 hours of receipt from Samsung. | |
| Shipments made pertaining to the sixth and seventh invoices. | |
| Suit filed by HKL Group Co Ltd. | |
| Judgment reserved. |
7. Legal Issues
- Enforceability of a Pathological Arbitration Clause
- Outcome: The court held that the arbitration clause was operative and workable, despite the defect, and granted a stay of proceedings conditional on the parties securing an agreement from an arbitral institution in Singapore to conduct a hybrid arbitration applying the ICC rules.
- Category: Substantive
- Sub-Issues:
- Deviation from essential elements of an arbitration clause
- Uncertainty of the arbitral institution
- Existence of a Dispute
- Outcome: The court held that a dispute had arisen within the meaning of the arbitration clause, as the defendant resisted payment based on the nature of the contractual relationship between the parties.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Arbitration
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Insigma Technology Co Ltd v Alstom Technology Ltd | Court of Appeal | Yes | [2009] 3 SLR(R) 936 | Singapore | Cited for the principle that courts should give effect to parties' intention to settle disputes by arbitration, even if the agreement is ambiguous or incomplete. |
| Lucky-Goldstar v Ng Moo Kee Engineering | High Court | No | [1993] 1 HKC 404 | Hong Kong | Cited as an example of a court upholding an arbitration clause despite uncertainty as to the arbitral institution and place of arbitration. |
| Tjong Very Sumito and others v Antig Investments Pte Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 732 | Singapore | Cited for the approach to determining whether a dispute has arisen for the purposes of an arbitration clause. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Arbitration clause
- Pathological clause
- Stay of proceedings
- Effective interpretation
- Hybrid arbitration
- Back to back liabilities
- International Chamber of Commerce rules
- Singapore International Arbitration Centre
15.2 Keywords
- arbitration
- stay of proceedings
- defective clause
- Singapore
- contract
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- Contract Law
- Civil Procedure