K.V.C. Rice Intertrade Co. v. Asian Mineral Resources: Stay of Proceedings & International Arbitration Act

The High Court of Singapore heard two registrar's appeals, K.V.C. Rice Intertrade Co., Ltd v. Asian Mineral Resources Pte. Ltd and Tanasan Rice Co., Ltd v. Asian Mineral Resources Pte. Ltd, on 23 February 2017, regarding the stay of court proceedings in favor of arbitration. The disputes arose from contracts for the sale of rice. The court granted the stay of proceedings, conditional on the defendant not objecting to the SIAC President's jurisdiction to appoint an arbitrator and allowing either party to apply to the court for further directions if the SIAC President declines to make an appointment.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Stay of proceedings granted with conditions.

1.3 Case Type

Civil

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court addresses stay of proceedings under IAA, concerning a bare arbitration clause and SIAC's role in appointing arbitrators.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
K.V.C. Rice Intertrade Co., LtdPlaintiffCorporationStay of proceedings granted with conditionsNeutral
Asian Mineral Resources Pte. Ltd.DefendantCorporationStay of proceedings granted with conditionsNeutral
Tanasan Rice Co., LtdPlaintiffCorporationStay of proceedings granted with conditionsNeutral

3. Judges

Judge NameTitleDelivered Judgment
Pang Khang ChauJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
P Jeya PutraAsiaLegal LLC
Thomas A. ChuangAsiaLegal LLC
Bazul AshabOon & Bazul LLP
Jason GohOon & Bazul LLP

4. Facts

  1. KVC Rice and Tanasan Rice, Thai companies, agreed to sell rice to Asian Mineral, a Singapore company.
  2. The contracts stipulated delivery from Thailand to Benin, Africa.
  3. Asian Mineral paid for the first four consignments but withheld payment for the fifth.
  4. Asian Mineral claimed oral agreements for a 15% discount, which the plaintiffs denied.
  5. The arbitration clauses in both contracts did not specify the place of arbitration or the method for appointing arbitrators.
  6. KVC Rice's contract referred to 'Indian Contract Rules,' while Tanasan Rice's referred to 'Singapore Contract Rules.'

5. Formal Citations

  1. K.V.C. Rice Intertrade Co Ltd v Asian Mineral Resources Pte Ltd and another suit, Suit No 539 of 2016 (Registrar’s Appeal No 295 of 2016), [2017] SGHC 32
  2. K.V.C. Rice Intertrade Co Ltd v Asian Mineral Resources Pte Ltd and another suit, Suit No 541 of 2016 (Registrar’s Appeal No 296 of 2016), [2017] SGHC 32

6. Timeline

DateEvent
Rice consignments arrived in Benin.
Tanasan Rice issued a letter of demand to Asian Mineral.
KVC Rice issued a letter of demand to Asian Mineral.
Asian Mineral's counsel asserted right to reject Tanasan Rice's arbitration proposal.
Tanasan Rice offered to meet for discussions on January 29 or 30.
Asian Mineral counter-proposed meeting dates in March 2016.
Tanasan Rice counter-proposed a meeting on either February 4 or 5.
Asian Mineral rejected Tanasan Rice's proposed meeting dates.
Hearing date.
Judgment reserved.

7. Legal Issues

  1. Stay of Court Proceedings
    • Outcome: The court granted a stay of proceedings in favor of arbitration, conditional on the defendant not objecting to the SIAC President's jurisdiction to appoint an arbitrator.
    • Category: Procedural
    • Sub-Issues:
      • Incapacity of arbitration agreement to be performed
  2. Appointment of Arbitrator
    • Outcome: The court held that the SIAC President has the power to act as the statutory appointing authority even where the place of arbitration is unclear or not yet determined.
    • Category: Procedural
    • Sub-Issues:
      • Role of SIAC President as appointing authority
      • Interpretation of bare arbitration clause
  3. Interpretation of Arbitration Clause
    • Outcome: The court did not form a settled view on the interpretation of the arbitration clause, leaving it to the arbitrator to determine the applicable law.
    • Category: Substantive
    • Sub-Issues:
      • Meaning of 'arbitration as per Indian/Singapore Contract Rules'
      • Intention of parties

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Arbitration
  • Commercial Litigation

11. Industries

  • Commodities Trading
  • Agriculture

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Insigma Technology Co Ltd v Alstom Technology LtdCourt of AppealYes[2009] 3 SLR(R) 936SingaporeCited for the principle that courts should give effect to the parties' intention to settle disputes by arbitration, even if the agreement is ambiguous or incomplete, as long as the arbitration can be carried out without prejudice to either party's rights.
Tomolugen Holdings Ltd v Silica Investors LtdCourt of AppealYes[2016] 1 SLR 373SingaporeCited for the applicable standard of review for stay applications under section 6 of the International Arbitration Act.
The “Duden”High CourtYes[2008] 4 SLR(R) 984SingaporeCited for the principles governing the imposition of terms and conditions on a stay of proceedings under the International Arbitration Act.
Lucky-Goldstar International (HK) Ltd v Ng Moo Kee Engineering LtdHigh CourtYes[1993] 1 HKC 404Hong KongCited for the principle that courts will disregard meaningless words in arbitration clauses in order to construe such clauses in a workable manner.
HKL Group Co Ltd v Rizq International Holdings Pte LtdHigh CourtYes[2013] SGHCR 5SingaporeCited for the principle that courts will disregard meaningless words in arbitration clauses in order to construe such clauses in a workable manner.
Piallo GmbH v Yafriro International Pte LtdHigh CourtYes[2014] 1 SLR 1028SingaporeCited regarding implied choice of law as the law applicable to the arbitration.
Cassa di Risparmio di Parma e Piacenza SpA v Rals International Pte LtdHigh CourtYes[2016] 1 SLR 79SingaporeCited regarding implied choice of law as the law applicable to the arbitration.
BCY v BCZHigh CourtYes[2016] SGHC 249SingaporeCited regarding implied choice of law as the law applicable to the arbitration.
Comtec Components Ltd v Interquip LtdHigh CourtYes[1998] HKCFI 803Hong KongCited for the principle that the courts retain a residuary jurisdiction to make an appointment to implement the intention of the parties that their disputes should be resolved by arbitration.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
International Arbitration Act (Cap 143A, 2002 Rev Ed)Singapore
Arbitration Act (Cap 10, 2002 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Bare arbitration clause
  • Stay of proceedings
  • International Arbitration Act
  • SIAC President
  • Appointing authority
  • UNCITRAL Model Law
  • Incapable of being performed
  • Prima facie standard
  • Connecting factors
  • Travaux préparatoires

15.2 Keywords

  • arbitration
  • stay of proceedings
  • international arbitration
  • SIAC
  • Singapore
  • contract
  • rice

17. Areas of Law

Area NameRelevance Score
Arbitration95
Commercial Law5
Civil Procedure5
Contract Law5

16. Subjects

  • Arbitration
  • International Trade
  • Contract Law
  • Civil Procedure