HKL Group Co Ltd v Rizq International Holdings: Stay of Proceedings and Security for Costs in Pathological Arbitration Clause Dispute
In HKL Group Co Ltd v Rizq International Holdings Pte Ltd, the High Court of Singapore granted a stay of proceedings in favour of arbitration, conditioned on Rizq International Holdings Pte Ltd furnishing security for costs of $25,000. The court addressed issues arising from a pathological arbitration clause, retaining the option for a hybrid arbitration and ordering security for costs due to concerns about Rizq Singapore's financial circumstances. The court made no order as to costs.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Proceedings stayed in favour of arbitration, with the condition that the defendant furnish security for costs.
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, conditioned on security for costs due to a pathological arbitration clause.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| HKL Group Co Ltd | Plaintiff | Corporation | Proceedings Stayed | Neutral | Kendall Tan, Daniel Liang |
| Rizq International Holdings Pte Ltd | Defendant | Corporation | Proceedings Stayed | Neutral | 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 Group Co Ltd sued Rizq International Holdings Pte Ltd.
- The arbitration clause in the contract did not specify a particular arbitral institution.
- HKL sought the imposition of a condition that Rizq Singapore furnish security for the sum claimed pending arbitration.
- Rizq Singapore's registered address is the address of a shopping mall in which Rizq Singapore has no physical presence.
- Rizq Singapore’s other address stated in its letterhead turned out to be the address of a laundromat.
- The court was concerned about the dubious financial circumstances of Rizq Singapore.
5. Formal Citations
- HKL Group Co Ltd v Rizq International Holdings Pte Ltd, Suit No 972 of 2012/P, [2013] SGHCR 8
- HKL Group Co Ltd v Rizq International Holdings Pte Ltd, , [2013] SGHCR 5
6. Timeline
| Date | Event |
|---|---|
| Suit filed (Suit No 972 of 2012/P) | |
| ICC Rules took effect | |
| Hearing held | |
| Judgment issued |
7. Legal Issues
- Stay of Proceedings in Favour of Arbitration
- Outcome: The court granted a stay of proceedings in favour of arbitration, conditioned on the defendant furnishing security for costs.
- Category: Procedural
- Related Cases:
- [2008] 4 SLR(R) 984
- Pathological Arbitration Clause
- Outcome: The court interpreted the pathological arbitration clause to allow for flexibility in choosing an arbitral institution, including the possibility of a hybrid arbitration.
- Category: Substantive
- Security for Costs
- Outcome: The court ordered the defendant to furnish security for costs in the amount of $25,000 due to concerns about their financial circumstances.
- Category: Procedural
- Related Cases:
- [2008] 4 SLR(R) 984
8. Remedies Sought
- Stay of Proceedings
- Security for Costs
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- No industries specified
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| The “Duden” | High Court | Yes | [2008] 4 SLR(R) 984 | Singapore | Cited regarding the court's discretion to impose terms when granting a stay of proceedings in favour of arbitration. |
| HKL Group Co Ltd v Rizq International Holdings Pte Ltd | High Court | Yes | [2013] SGHCR 5 | Singapore | Refers to the initial judgment where the stay of proceedings was granted, and the current judgment clarifies and adds conditions to that initial decision. |
13. Applicable Rules
| Rule Name |
|---|
| ICC Rules |
| ICC 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
- Pathological arbitration clause
- Hybrid arbitration
- Security for costs
- Stay of proceedings
- Arbitral institution
- ICC Rules
15.2 Keywords
- arbitration
- stay of proceedings
- security for costs
- pathological arbitration clause
- ICC Rules
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- Civil Procedure
- Contract Law