BDG v BDH: Injunction to Restrain Winding Up Application Due to Arbitration Clause

In BDG v BDH, the High Court of Singapore heard an application by BDG to restrain BDH from presenting a winding up application. BDG argued that the underlying dispute was subject to an arbitration clause. The court, presided over by Judicial Commissioner Aedit Abdullah, granted the injunction, holding that there was prima facie a dispute between the parties subject to the arbitration clause, and that the arbitration agreement should be upheld. The case involved a breach of contract claim.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Injunction granted to restrain the filing of winding up applications.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Plaintiff sought to restrain Defendant's winding up application, arguing a dispute governed by arbitration. The court granted the injunction, prioritizing the arbitration agreement.

1.7 Decision Date

28 September 2016

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
BDG	Plaintiff	Corporation	Injunction granted	Won	Jainil Bhandari, Aleksandar Anatoliev Georgiev, Raelene Su-Lin Pereira, Han JiaMin
BDH	Defendant	Corporation	Application to wind up company restrained	Lost	Nicholas Lazarus, Elizabeth Toh Guek Li

3. Judges

Judge Name	Title	Delivered Judgment
Aedit Abdullah	Judicial Commissioner	Yes

4. Counsels

Counsel Name	Organization
Jainil Bhandari	Rajah & Tan Singapore LLP
Aleksandar Anatoliev Georgiev	Rajah & Tan Singapore LLP
Raelene Su-Lin Pereira	Rajah & Tan Singapore LLP
Han JiaMin	Rajah & Tan Singapore LLP
Nicholas Lazarus	Justicius Law Corporation
Elizabeth Toh Guek Li	Justicius Law Corporation

4. Facts

BDG contracted with BDH for the supply of drilling units for fossil fuel production.
Two separate contracts were made: the B Contract and the C Contract.
The contracts included a tiered dispute resolution clause.
BDH issued a statutory demand for US$8.9 million.
BDG claims there was a suspension of work agreed between the parties.
BDG made two payments of US$300,000 to BDH.
BDG put a third payment of US$300,000 into escrow.

5. Formal Citations

BDG v BDH, Originating Summons No 633 of 2016, [2016] SGHC 211

6. Timeline

Date	Event
2016-04-01	Defendant issued a statutory demand for US$8.9 million.
2016-06-01	Defendant served another statutory demand.
2016-09-16	Judgment reserved.
2016-09-29	Judgment issued.

7. Legal Issues

Enforcement of Arbitration Agreements
- Outcome: The court held that the dispute was subject to a valid arbitration agreement and should be resolved through arbitration.
- Category: Substantive
- Sub-Issues:
  - Scope of arbitration clause
  - Compliance with dispute resolution clause
- Related Cases:
  - [2016] 1 SLR 373
  - [2011] 3 SLR 118
  - [2015] Ch 589
Restraint of Winding Up Application
- Outcome: The court granted an injunction to restrain the winding up application.
- Category: Procedural
- Related Cases:
  - [2007] 2 SLR(R) 268
  - [2008] 4 SLR(R) 348
Existence of a Bona Fide Dispute
- Outcome: The court found that a dispute prima facie exists between the parties.
- Category: Substantive
- Related Cases:
  - [2009] 4 SLR(R) 732
  - [2008] 2 SLR(R) 491

8. Remedies Sought

Injunction to restrain winding up application
Declaration that disputes be referred to arbitration
Order that disputes be referred to arbitration

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation
Arbitration
Insolvency

11. Industries

Oil and Gas

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Metalform Asia Pte Ltd v Holland Leedon Pte Ltd	High Court	Yes	[2007] 2 SLR(R) 268	Singapore	Cited for the proposition that an injunction may be granted to restrain the commencement of winding up if the winding up application is not an appropriate means of enforcing a debt because there is a debt that is bona fide disputed.
Re Mechanised Construction and Lai Shit Har v Lau Yu Man	High Court	Yes	[2008] 4 SLR(R) 348	Singapore	Cited for the proposition that an injunction may be granted to restrain the commencement of winding up if the winding up application is not an appropriate means of enforcing a debt because there is a debt that is bona fide disputed.
Mohd Zain bin Abdullah v Chimbusco International Petroleum (Singapore) Pte Ltd and another appeal	Court of Appeal	Yes	[2014] 2 SLR 446	Singapore	Cited for the proposition that the usual standard is the same as that required to defeat a summary judgment application, ie, triable issues must be raised.
Salford Estates (No 2) Ltd v Altomart Ltd (No 2)	Court of Appeal	Yes	[2015] Ch 589	England and Wales	Cited for the proposition that where an arbitration agreement governs the dispute, the relevant standard is whether prima facie there is an arbitration clause and if so, the dispute is governed by that clause.
Eco Measure Market Exchange Ltd v Quantum Climate Services	High Court	Yes	[2015] BCC 877	England and Wales	Cited for the proposition that where an arbitration agreement governs the dispute, the relevant standard is whether prima facie there is an arbitration clause and if so, the dispute is governed by that clause.
Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals	Court of Appeal	Yes	[2016] 1 SLR 373	Singapore	Cited for the proposition that disputes should be referred to arbitration if prima facie there is a valid arbitration clause, the dispute falls within its scope and the arbitration clause is not null and void, inoperative or incapable of being performed.
Tjong Very Sumito and others v Antig Investments Pte Ltd	High Court	Yes	[2009] 4 SLR(R) 732	Singapore	Cited for the proposition that all that needs be shown is that there is an assertion of a dispute or denial of a claim.
Doshion Ltd v Sembawang Engineers and Constructors	High Court	Yes	[2011] 3 SLR 118	Singapore	Cited for the proposition that the arbitration clause covered the dispute between the parties as it covered whether a settlement agreement was reached.
A Best Floor Sanding Pty Ltd v Skyer Australia Pty Ltd	Supreme Court of Victoria	Yes	[1999] VSC 170	Australia	Cited for the proposition that arbitration clauses should not oust the jurisdiction of the courts.
Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal	High Court	Yes	[2008] 2 SLR(R) 491	Singapore	Cited for the general approach in determining the existence of a bona fide dispute in Singapore is to consider whether a triable issue has been made out, applying a standard similar to that for summary judgment.
Uni-Navigation Pte Ltd v Wei Loong Shipping Pte Ltd	High Court	Yes	[1992] 3 SLR(R) 595	Singapore	Cited for the proposition that what needed to be shown was a prima facie case of dispute.
Kwan Im Tong Chinese Temple v Fong Choong Hung Construction Pte Ltd	High Court	Yes	[1998] 1 SLR(R) 401	Singapore	Cited for the proposition that what needed to be shown was a prima facie case of dispute.
Sim Chay Koon v NTUC Income Insurance Co-operative Ltd	High Court	Yes	[2016] 2 SLR 871	Singapore	Cited for the proposition that what needed to be shown was a prima facie case of dispute.
Four Pillars Enterprises Co Ltd v Beiersdorf Aktiengesellschaft	High Court	Yes	[1999] 1 SLR(R) 382	Singapore	Cited for the proposition that winding up could be stayed in favour arbitration in some circumstances.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed) s 254	Singapore
Arbitration Act (Cap 10, 2002 Rev Ed)	Singapore
International Arbitration Act (Cap 143A, 2002 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Winding up application
Arbitration clause
Statutory demand
Dispute resolution clause
Settlement agreement
Prima facie dispute
Triable issue
Injunction

15.2 Keywords

winding up
arbitration
injunction
dispute resolution
companies act

16. Subjects

Arbitration
Company Law
Insolvency Law

17. Areas of Law

Arbitration Law
Company Law
Insolvency Law
Civil Procedure