BASF Intertrade AG v H&C S Holdings: Stay of Proceedings in Favor of Arbitration
BASF Intertrade AG Singapore Branch sued H&C S Holdings Pte Ltd in the High Court of Singapore, seeking US$4,368,230 based on wash-out and circle-out agreements and US$426,000 for alleged repudiation of sales contracts. H&C S Holdings applied for a stay of proceedings under Section 6 of the International Arbitration Act, arguing the disputes fell under an arbitration agreement or, alternatively, under the court's inherent case management powers. The court granted the stay for Category 2 agreements in favor of arbitration and a case management stay for Category 1 agreements pending the arbitration outcome.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Category 2 proceedings are stayed in favour of arbitration and a case management stay is granted in respect of the Category 1 Agreements.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Application for stay of court proceedings in favor of arbitration granted. The court found an arbitration agreement applied to the dispute.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| H&C S Holdings Pte Ltd | Defendant | Corporation | Application granted. | Won | |
| BASF Intertrade AG Singapore Branch | Plaintiff | Corporation | Category 2 proceedings stayed in favour of arbitration and a case management stay is granted in respect of the Category 1 Agreements. | Stayed |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Tan Teck Ping Karen | Assistant Registrar | Yes |
4. Counsels
4. Facts
- Plaintiff and Defendant are companies engaged in commodities trading.
- Disputes arose between the parties concerning certain contracts.
- Defendant applied for a stay of proceedings based on an arbitration agreement.
- The key dispute is whether the Defendant is bound by transactions entered into by its former trading manager, Mr. Peter Chia.
- Defendant commenced arbitral proceedings in the Singapore International Arbitration Centre (SIAC).
- The Plaintiff challenged the jurisdiction of SIAC to administer the arbitral proceedings.
5. Formal Citations
- BASF Intertrade AG Singapore Branch v H&C S Holding Pte Ltd, Suit No 362 of 2017, [2017] SGHCR 10
6. Timeline
| Date | Event |
|---|---|
| Plaintiff and Defendant engaged in a number of contracts involving the trading of petrochemicals. | |
| Mr. Peter Chia became the Defendant’s trading manager. | |
| First documented transaction between Plaintiff and Defendant. | |
| Defendant's management instructed Chia to cease taking 'open' positions in trades. | |
| Earliest Wash-Out Agreement entered into. | |
| Latest documented transaction between Plaintiff and Defendant. | |
| Plaintiff began providing the Defendant with sets of the Plaintiff’s terms in respect of these agreements. | |
| Parties entered into a Circle-Out Agreement. | |
| Defendant issued a letter to the Plaintiff stating that transactions entered into by Chia were not authorised. | |
| Mr. Peter Chia ceased to be the Defendant’s trading manager. | |
| Hearing date. | |
| Judgment reserved. |
7. Legal Issues
- Stay of Court Proceedings
- Outcome: The court granted the stay for Category 2 agreements in favor of arbitration and a case management stay for Category 1 agreements pending the arbitration outcome.
- Category: Procedural
- Incorporation of Arbitration Clause by Conduct
- Outcome: The court found that the arbitration clause in the Defendant’s standard terms were incorporated by the parties’ course of conduct.
- Category: Substantive
- Applicability of Choice of Law Clause
- Outcome: The court found that the choice of law clause is not applicable to the Category 1 Agreements.
- Category: Substantive
- Extension of Arbitration Clause to Separate Agreements
- Outcome: The court found that the arbitration clause applicable to the underlying Sale and Purchase Contracts do not extend to the Category 1 Agreements.
- Category: Substantive
- Exercise of Inherent Powers of Case Management
- Outcome: The court granted a case management stay in respect of the Category 1 Agreements pending the resolution of the arbitration proceedings in respect of the Category 2 Agreements.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Tomolugen Holdings Ltd v Silica Investors Ltd | Court of Appeal | Yes | [2016] 1 SLR 373 | Singapore | Cited for the prima facie standard of review applied when hearing a stay application under s 6 of the IAA and the principles guiding the court’s decision whether to grant a case management stay. |
| R1 International Pte Ltd v Lonstroff AG | Court of Appeal | Yes | [2015] 1 SLR 521 | Singapore | Cited in support of the position that the arbitration clause has been incorporated into the Sale Contract and Purchase Contract by course of conduct. |
| Maybank Kim Eng Securities Pte Ltd v Lim Keng Yong | High Court | Yes | [2016] 3 SLR 431 | Singapore | Cited to consider the issue of whether a case management stay was to be granted. |
| Coop International Pte Ltd v Ebel SA | High Court | Yes | [1998] 1 SLR(R) 615 | Singapore | Cited to support the position that the Wash-Out and Circle-Out Agreements which form the Category 1 Agreements are separate, stand-alone, compromise agreements which release both parties from all liabilities. |
| Kianta Osakeyhtio v Britain & Overseas Trading Company, Ltd | Court of Appeal | Yes | [1954] 1 Lloyd’s Rep 247 | England | Cited for the test to determine whether the dispute falls within the arbitration clause of the earlier agreement. |
| Danone Asia Pacific Holdings Pte Ltd v Fonterra Co-Operative Group Limited | High Court | Yes | [2014] NZHC 1681 | New Zealand | Cited for factors in favor of a stay. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| International Arbitration Act (Cap 143A) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Wash-Out Agreement
- Circle-Out Agreement
- Open Position
- Back to Back
- Arbitration Clause
- Stay of Proceedings
- Case Management Stay
15.2 Keywords
- arbitration
- stay of proceedings
- contract dispute
- commodities trading
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Arbitration | 95 |
| Contract Law | 80 |
| Breach of Contract | 70 |
| Commercial Law | 60 |
| Commercial Disputes | 50 |
| Business Litigation | 40 |
| Company Law | 30 |
| Commodities Trading | 25 |
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure