VTB Bank v Anan Group: Winding Up Application & Disputed Debt
VTB Bank (Public Joint Stock Company) applied to the High Court of Singapore to wind up Anan Group (Singapore) Pte Ltd on the grounds that it was unable to pay its debts. Anan Group opposed the application, claiming a disputed debt governed by an arbitration agreement. Judicial Commissioner Dedar Singh Gill found in favor of VTB Bank and ordered Anan Group to be wound up, concluding that the debt was not bona fide disputed.
1. Case Overview
1.1 Court
High Court of the Republic of Singapore1.2 Outcome
Order that the Defendant be wound up
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
VTB Bank sought to wind up Anan Group over a disputed debt. The court ordered Anan Group to be wound up, finding the debt was not bona fide disputed.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| VTB Bank (Public Joint Stock Company) | Plaintiff | Corporation | Judgment for Plaintiff | Won | Shobna d/o V Chandran, Lee Chia Ming, Ashwin Nair Vijayakumar, Alexander Choo Wei Wen |
| Anan Group (Singapore) Pte Ltd | Defendant | Corporation | Winding up order made against the Defendant | Lost | Daniel Soo, Cumara Kamalacumar |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Dedar Singh Gill | Judicial Commissioner | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Shobna d/o V Chandran | Dentons Rodyk & Davidson LLP |
| Lee Chia Ming | Dentons Rodyk & Davidson LLP |
| Ashwin Nair Vijayakumar | Dentons Rodyk & Davidson LLP |
| Alexander Choo Wei Wen | Dentons Rodyk & Davidson LLP |
| Daniel Soo | Selvam LLC |
| Cumara Kamalacumar | Selvam LLC |
4. Facts
- VTB Bank sought to wind up Anan Group for failure to pay debts.
- The debt arose from a repurchase transaction under a global master repurchase agreement (GMRA).
- Anan Group sold global depository receipts (GDRs) of shares in EN+ Group PLC to VTB Bank.
- The United States imposed sanctions on EN+, causing its share price to plummet.
- VTB Bank issued a margin trigger event notice, but Anan Group failed to provide sufficient collateral.
- Anan Group argued the GMRA was frustrated by the sanctions and disputed the debt amount.
- Anan Group filed a notice of arbitration to resolve the dispute.
5. Formal Citations
- VTB Bank (Public Joint Stock Co) v Anan Group (Singapore) Pte Ltd, Companies Winding Up No 183 of 2018, [2018] SGHC 250
6. Timeline
| Date | Event |
|---|---|
| Plaintiff and Defendant entered into a repurchase transaction under a global master repurchase agreement | |
| Defendant sold the Plaintiff approximately 35,714,295 EN+ GDRs for approximately US$249,999,990 | |
| United States Department of Treasury’s Office of Foreign Assets Control designated certain persons to its Specially Designated Nationals List, including EN+ | |
| Plaintiff issued a margin trigger event notice | |
| EN+ shares were trading at US$5.60 per share | |
| Plaintiff issued a notice to the Defendant setting out the circumstances of the Defendant’s defaults under the GMRA | |
| Plaintiff issued a default notice, designating 16 April 2018 as the early termination date | |
| Plaintiff sent a calculation notice to inform the Defendant that the balance payable to the Plaintiff as of that date was US$170,292,452.03 | |
| Plaintiff sent a revised calculation notice to the Defendant setting out the revised balance payable as of that date, which was US$166,432,652.28 | |
| Plaintiff’s solicitors served a statutory demand for the sum of US$170,388,766.03 on the Defendant | |
| A subsidiary of the Defendant, AnAn International Limited, issued a company announcement on the Singapore Stock Exchange stating that the Defendant had received a statutory demand from the Plaintiff | |
| Defendant’s solicitors wrote to the Plaintiff’s solicitors stating that the Defendant “disputes” the outstanding sum | |
| Defendant filed an application in Originating Summons No 975 of 2018 to restrain the Plaintiff from commencing proceedings or making any application for the winding up of the Defendant on the basis of the statutory demand | |
| Plaintiff’s solicitors responded via letter, highlighting that the Defendant had not explained why the sum was disputed | |
| SUM 3677 was heard by Andrew Ang SJ, who dismissed the Defendant’s application | |
| Plaintiff filed the present application in Companies Winding Up No 183 of 2018 seeking to wind up the Defendant | |
| Plaintiff filed an application in Summons No 3795 of 2018 to appoint three individuals as joint and several provisional liquidators of the Defendant | |
| Defendant filed a notice of arbitration at the Singapore International Arbitration Centre | |
| Ang SJ heard SUM 3795 on an expedited basis and granted the Plaintiff’s application to appoint the provisional liquidators | |
| Defendant filed an affidavit-in-reply to the Plaintiff’s supporting affidavit for CWU 183 | |
| Court found in favour of the Plaintiff and ordered that the Defendant be wound up | |
| Full grounds of decision set out |
7. Legal Issues
- Disputed Debt
- Outcome: The court held that the debt was not bona fide disputed and ordered the company to be wound up.
- Category: Substantive
- Sub-Issues:
- Frustration of contract
- Force majeure
- Quantification of debt
- Related Cases:
- [2015] Ch 589
- [2016] 5 SLR 977
- [2008] 2 SLR(R) 491
- [2007] 2 SLR(R) 268
- [2011] 4 SLR 997
- Standard of Proof for Disputed Debt in Winding Up Application
- Outcome: The court held that the applicable standard of proof was that of triable issues.
- Category: Procedural
- Sub-Issues:
- Triable issues
- Prima facie case of dispute
- Related Cases:
- [2015] Ch 589
- [2016] 5 SLR 977
- [2008] 2 SLR(R) 491
- [2007] 2 SLR(R) 268
- [2011] 4 SLR 997
8. Remedies Sought
- Winding up order
- Appointment of liquidators
9. Cause of Actions
- Winding up application
- Breach of contract
10. Practice Areas
- Winding Up
- Commercial Litigation
- Arbitration
11. Industries
- Banking
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Salford Estates (No 2) Ltd v Altomart Ltd (No 2) | English Court of Appeal | Yes | [2015] Ch 589 | England | Cited regarding the standard of proof required when a debt is disputed and governed by an arbitration agreement in a winding-up application. |
| BDG v BDH | Singapore High Court | Yes | [2016] 5 SLR 977 | Singapore | Cited regarding the standard of proof required when a debt is disputed and governed by an arbitration agreement in a winding-up application, and the court's pro-arbitration policy. |
| Ward v James | N/A | Yes | [1966] 1 QB 273 | N/A | Cited for the principle that the court's discretion to wind up a company is a wide one. |
| Malayan Plant (Pte) Ltd v Moscow Narodny Bank Ltd | N/A | Yes | [1979–1980] SLR(R) 511 | Singapore | Cited for the principle that the court's discretion to wind up a company is a wide one. |
| Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal | Court of Appeal | Yes | [2008] 2 SLR(R) 491 | Singapore | Cited for the principle that the court must evaluate the evidence to determine if a dispute exists and the applicable standard of proof is one of triable issues. |
| 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 principle that the triable issues standard is the same as that required to defeat a summary judgment application. |
| Revenue and Customs Commissioners v Changtel Solutions UK Ltd (formerly ENTA Technologies Ltd) | Court of Appeal | Yes | [2015] 1 WLR 3911 | England | Reference to Salford case. |
| Eco Measure Market Exchange Ltd v Quantum Climate Services Ltd | High Court | Yes | [2015] EWHC 1797 (Ch) | England | Reference to Salford case. |
| Fieldfisher LLP v Pennyfeathers Ltd | High Court | Yes | [2016] EWHC 566 (Ch) | England | Reference to Salford case. |
| Lasmos Limited v Southwest Pacific Bauxite (HK) Limited | Hong Kong Court of First Instance | Yes | [2018] HKCFI 416 | Hong Kong | Cited for its survey of authorities regarding the impact of an arbitration clause on a winding-up petition. |
| Re: Hong Kong Sports Industrial Development Limited (formerly known as LeTV Sports Culture Develop (Hong Kong) Co. Limited) | Hong Kong Court of First Instance | Yes | [2018] HKCFI 1309 | Hong Kong | Cited for the principle that the mere existence of arbitration does not require the court to dismiss a winding-up application. |
| Re Sanpete Builders (S) Pte Ltd | High Court | Yes | [1989] 1 SLR(R) 5 | Singapore | Cited for the principle that the court must consider whether the debtor-company has a bona fide claim based on substantial grounds which ought to go to arbitration. |
| Metalform Asia Pte Ltd v Holland Leedon Pte Ltd | Court of Appeal | Yes | [2007] 2 SLR(R) 268 | Singapore | Cited for the principle that even if there is a dispute governed by an arbitration agreement, the standard of proof is that of triable issues. |
| Denmark Skibstekniske Konsulenter A/S I Likvidation (formerly known as Knud E Hansen A/S) v Ultrapolis 3000 Investments Ltd (formerly known as Ultrapolis 3000 Theme Park Investments Ltd) | High Court | Yes | [2011] 4 SLR 997 | Singapore | Cited for the principle that the applicable standard is no more than that for resisting a summary judgment application, i.e., the triable issues standard. |
| Ashworth v Newnote Ltd | England and Wales Court of Appeal (Civil Division) | Yes | [2007] EWCA Civ 793 | England | Cited for the principle that any linguistic divergence between the “triable issue” test and the “unlikely to succeed test” is a distinction without difference. |
| Tjong Very Sumito and others v Antig Investments Pte Ltd | Court of Appeal | Yes | [2009] 4 SLR(R) 732 | Singapore | Cited for the judicial policy of facilitating and promoting arbitration in Singapore. |
| Re Welsh Brick Industries, Ltd | N/A | Yes | [1946] 2 All ER 197 | N/A | Cited for the principle that whether there is a bona fide dispute is simply another way of putting the question of whether or not there is some substantial ground for defending the action. |
| RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd | Court of Appeal | Yes | [2007] 4 SLR(R) 413 | Singapore | Cited for the principle that a party must be strictly held to its contractual obligations and should only be released from them where supervening events make it impossible, and not merely onerous, to fulfil them and for the definition of force majeure. |
| Magenta Resources (S) Pte Ltd v China Resources (S) Pte Ltd | High Court | Yes | [1996] 2 SLR(R) 316 | Singapore | Cited for the definition of force majeure. |
| Pacific King Shipping Pte Ltd v Glory Wealth Shipping Pte Ltd | Court of Appeal | Yes | [2010] 4 SLR 413 | Singapore | Cited for the principle that the presumption of insolvency operates so long as the debtor does not pay a sum which is not in dispute, and that sum exceeds the prescribed minimum amount for the issuance of a statutory demand. |
| Halki Shipping Corpn v Sopex Oils Ltd | N/A | Yes | [1998] 1 WLR 726 | N/A | Considered in Salford Estates (No 2) Ltd v Altomart Ltd (No 2) [2015] Ch 589. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) s 254(1)(e) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 254(2)(a) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Global Master Repurchase Agreement
- GMRA
- Global Depository Receipts
- GDRs
- EN+ Group PLC
- OFAC Sanctions
- Margin Trigger Repo Ratio
- Liquidation Repo Ratio
- Statutory Demand
- Winding Up
- Arbitration Agreement
- Frustration
- Force Majeure
15.2 Keywords
- Winding up
- Disputed debt
- Arbitration
- Insolvency
- Singapore
- VTB Bank
- Anan Group
- Companies Act
- GMRA
- Frustration
- Force majeure
16. Subjects
- Insolvency
- Arbitration
- Finance
17. Areas of Law
- Insolvency Law
- Companies Law
- Arbitration Law