AnAn Group v. VTB Bank: Winding Up, Disputed Debt & Arbitration Agreement

The Singapore Court of Appeal heard an appeal by AnAn Group (Singapore) Pte Ltd against VTB Bank (Public Joint Stock Company)'s application to wind up AnAn based on a disputed debt. The debt arose from a global master repurchase agreement (GMRA) between AnAn and VTB. The court addressed the applicable standard of review when a dispute subject to an arbitration agreement forms the basis of a winding-up application. The Court of Appeal allowed the appeal, reversing the order to wind up AnAn.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Allowed

1.3 Case Type

Insolvency

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal addresses the standard of review for winding-up applications based on debts subject to arbitration agreements, ultimately favoring arbitration.

1.7 Decision Date

6 April 2020

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
AnAn Group (Singapore) Pte Ltd	Appellant, Defendant	Corporation	Appeal allowed	Won	Lee Eng Beng of Rajah & Tann Singapore LLP Chew Xiang of Rajah & Tann Singapore LLP Cheong Tian Ci Torsten of Rajah & Tann Singapore LLP
VTB Bank (Public Joint Stock Company)	Respondent, Plaintiff	Corporation	Winding-up application dismissed	Lost	Lee Chia Ming of Dentons Rodyk & Davidson LLP Alexander Choo Wei Wen of Dentons Rodyk & Davidson LLP Philip Antony Jeyaretnam of Dentons Rodyk & Davidson LLP Shobna d/o V Chandran of Dentons Rodyk & Davidson LLP Ashwin Nair Vijayakumar of Dentons Rodyk & Davidson LLP

3. Judges

Judge Name	Title	Delivered Judgment
Sundaresh Menon	Chief Justice	No
Andrew Phang Boon Leong	Judge of Appeal	No
Judith Prakash	Judge of Appeal	No
Steven Chong	Judge of Appeal	Yes
Quentin Loh	Judge	No

4. Counsels

Counsel Name	Organization
Lee Eng Beng	Rajah & Tann Singapore LLP
Chew Xiang	Rajah & Tann Singapore LLP
Cheong Tian Ci Torsten	Rajah & Tann Singapore LLP
Lee Chia Ming	Dentons Rodyk & Davidson LLP
Alexander Choo Wei Wen	Dentons Rodyk & Davidson LLP
Philip Antony Jeyaretnam	Dentons Rodyk & Davidson LLP
Shobna d/o V Chandran	Dentons Rodyk & Davidson LLP
Ashwin Nair Vijayakumar	Dentons Rodyk & Davidson LLP

4. Facts

AnAn and VTB entered into a GMRA on 3 November 2017, under which AnAn would sell VTB GDRs of shares in EN+ and then repurchase them at a later date.
On 7 November 2017, AnAn sold 35,715,295 EN+ GDRs for approximately US$249,999,990 to VTB.
On 6 April 2018, sanctions were imposed on major shareholders of EN+ by the United States Treasury’s Office of Foreign Assets Control.
On the same day, VTB issued a Margin Trigger Event Notice, informing AnAn that the Repo Ratio was at approximately 74.57%, exceeding the Margin Trigger Repo Ratio of 60%.
On 12 April 2018, VTB sent a default notice to AnAn, designating 16 April 2018 as the early termination date of the GMRA.
On 24 April 2018, VTB sent a calculation notice to AnAn, stating that a sum of approximately US$170m was owed by AnAn.
On 23 July 2018, VTB served a statutory demand for the sum of approximately US$170m, which AnAn failed to repay within the three-week period.

5. Formal Citations

AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Company), , [2020] SGCA 33
AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Company), Civil Appeal No 174 of 2018, Civil Appeal No 174 of 2018
VTB Bank (Public Joint Stock Company) v AnAn Group (Singapore) Pte Ltd, Companies Winding Up No 183 of 2018, Companies Winding Up No 183 of 2018
VTB Bank (Public Joint Stock Company) v AnAn Group (Singapore) Pte Ltd, , [2018] SGHC 250
Anan Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co), , [2019] 2 SLR 341

6. Timeline

Date	Event
2017-11-03	AnAn and VTB entered into a global master repurchase agreement
2017-11-07	AnAn sold EN+ GDRs to VTB for approximately US$249,999,990
2018-04-06	Sanctions were imposed on major shareholders of EN+ by the United States Treasury’s Office of Foreign Assets Control
2018-04-06	VTB issued a Margin Trigger Event Notice
2018-04-12	VTB sent a default notice to AnAn, designating 16 April 2018 as the early termination date of the GMRA
2018-04-16	Early termination date of the GMRA
2018-04-24	VTB sent a calculation notice to AnAn, stating that a sum of approximately US$170m was owed by AnAn
2018-07-23	VTB served a statutory demand for the sum of approximately US$170m
2018-08-17	VTB applied to wind up AnAn on the basis of the statutory demand
2018-00-00	Judge ordered the winding up of AnAn
2019-05-24	Court granted AnAn's application to adduce fresh evidence
2019-11-26	Judgment reserved
2020-03-31	Judgment reserved
2020-04-07	Judgment delivered

7. Legal Issues

Standard of Review for Winding-Up Application
- Outcome: The court held that the prima facie standard should apply when a dispute subject to an arbitration agreement arises in relation to a debt which forms the basis of a winding-up application.
- Category: Procedural
- Sub-Issues:
  - Prima facie standard
  - Triable issue standard
  - Abuse of process
- Related Cases:
  - [2007] 2 SLR(R) 268
  - [2008] 2 SLR(R) 491
  - [2016] 5 SLR 977
  - [2015] Ch 589
  - [2015] 1 WLR 3911
  - [2015] EWHC 1797 (Ch)
  - [2016] EWHC 566 (Ch)
  - [2018] 2 HKLRD 449
  - [2019] HKCA 873
  - BVIHCMAP2014/0025 and BVIHCMAP2015/0003
  - [2011] 3 SLR 414
  - [2009] 2 SLR(R) 949
  - [2007] 3 SLR(R) 86
  - [2009] 4 SLR(R) 732
  - [2003] 3 SLR(R) 32
  - [2018] 2 SLR 1271
  - BVIHC (COM) 2014/0090
  - [2016] 1 WLR 4098
  - [2010] 4 SLR 1089
  - [2016] 2 SLR 1178
  - [2018] EWCA Civ 719
  - [2019] SGHC 81
  - [2016] 1 SLR 373
  - [2016] 2 SLR 871
  - [1997] 3 SLR(R) 649
  - [2014] AC 160
  - [2020] HKCU 494
  - [1997] HKLRD 828
Compliance with Clause 10(f) of the GMRA
- Outcome: The court found that there were triable issues as to whether the obligations under cl 10(f) of the GMRA have been complied with.
- Category: Substantive
- Sub-Issues:
  - Reasonableness of Net Value determination
  - Proper valuation method
- Related Cases:
  - [2018] EWCA Civ 719

8. Remedies Sought

Winding-Up Order

9. Cause of Actions

Breach of Contract

10. Practice Areas

Commercial Litigation
Arbitration
Insolvency
Debt Recovery

11. Industries

Banking
Finance

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Metalform Asia Pte Ltd v Holland Leedon Pte Ltd	Court of Appeal	Yes	[2007] 2 SLR(R) 268	Singapore	Discusses the standard of review in a cross-claim situation in winding-up applications, ultimately applying the triable issue standard.
Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal	Court of Appeal	Yes	[2008] 2 SLR(R) 491	Singapore	States that a debtor-company need only raise triable issues to obtain a stay or dismissal of a winding-up application.
BDG v BDH	High Court	Yes	[2016] 5 SLR 977	Singapore	Suggests that where a debt is subject to an arbitration clause, the debtor-company only needs to establish a prima facie case that the dispute falls within the scope of the arbitration agreement.
Salford Estates (No 2) Ltd v Altomart Ltd (No 2)	English Court of Appeal	Yes	[2015] Ch 589	England	Held that the standard of review ought to be lowered when faced with a disputed debt that was subject to an arbitration agreement.
Revenue and Customs Commissioners v Changtel Solutions UK Ltd (formerly ENTA Technologies Ltd)	English Court of Appeal	Yes	[2015] 1 WLR 3911	England	Refers to the Salford decision.
Eco Measure Market Exchange Ltd v Quantum Climate Services Ltd	English High Court	Yes	[2015] EWHC 1797 (Ch)	England	Applies the Salford decision.
Fieldfisher LLP v Pennyfeathers Ltd	English High Court	Yes	[2016] EWHC 566 (Ch)	England	Applies the Salford decision.
Re Southwest Pacific Bauxite (HK) Ltd	High Court	Yes	[2018] 2 HKLRD 449	Hong Kong	Considered that it would be anomalous for the court to conduct a summary judgment type analysis of liability for an unadmitted debt, on which a winding-up petition is grounded.
But Ka Chon v Interactive Brokers LLC	Hong Kong Court of Appeal	Yes	[2019] HKCA 873	Hong Kong	Raised several doubts in its obiter remarks about the Lasmos decision.
Jinpeng Group Ltd v Peak Hotels and Resorts Ltd	Eastern Caribbean Court of Appeal	Yes	BVIHCMAP2014/0025 and BVIHCMAP2015/0003	Eastern Caribbean	Declined to adopt the Salford approach and instead retained the triable issue standard.
Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore)	Court of Appeal	Yes	[2011] 3 SLR 414	Singapore	Discusses the non-arbitrability of certain types of disputes involving an insolvent company that was in liquidation.
BNP Paribas v Jurong Shipyard Pte Ltd	High Court	Yes	[2009] 2 SLR(R) 949	Singapore	States that the winding-up jurisdiction of the court is not the appropriate forum to adjudicate on disputed claims that are subject to arbitration.
Soh Beng Tee & Co Pte Ltd v Fairmount Development Pte Ltd	High Court	Yes	[2007] 3 SLR(R) 86	Singapore	States that discretion must still be exercised in a guarded manner that gives weight to the autonomy of the arbitral process.
Tjong Very Sumito and others v Antig Investments Pte Ltd	High Court	Yes	[2009] 4 SLR(R) 732	Singapore	States that party autonomy is the cornerstone underlying judicial non-intervention in arbitration.
Goh Chok Tong v Chee Soon Juan	High Court	Yes	[2003] 3 SLR(R) 32	Singapore	Discusses the triable issue standard.
Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte Ltd	Court of Appeal	Yes	[2018] 2 SLR 1271	Singapore	Discusses the overarching test in an application to stay court proceedings pursuant to an exclusive jurisdiction clause.
Hualon Corporation (M) Sdn Bhd (in receivership) v Marty Limited	Eastern Caribbean High Court	Yes	BVIHC (COM) 2014/0090	Eastern Caribbean	Decided that the prima facie standard ought to apply when there is an application to stay court proceedings in favour of arbitration.
Anzen Limited and others v Hermes One Limited	Privy Council	Yes	[2016] 1 WLR 4098	United Kingdom	Discusses the issues with requiring a debtor to seek mirror image declarations of non-liability.
Liquidators of Progen Engineering Pte Ltd v Progen Holdings Ltd	High Court	Yes	[2010] 4 SLR 1089	Singapore	States that directors owe a duty to consider the interests of creditors when a company is insolvent, or near the state of insolvency.
Encus International Pte Ltd (in compulsory liquidation) v Tenacious Investment Pte Ltd and others	High Court	Yes	[2016] 2 SLR 1178	Singapore	States that the balance sheet of the company is another marker of insolvency.
LBI EHF v Raiffeisen Bank International AG	English Court of Appeal	Yes	[2018] EWCA Civ 719	England	Involved a sale and repurchase agreement with securities provided as collateral for what was in essence a loan.
BWF v BWG	High Court	Yes	[2019] SGHC 81	Singapore	Adopted the lower standard of review, and granted the injunction.
Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals	Court of Appeal	Yes	[2016] 1 SLR 373	Singapore	Held that the prima facie standard of review applies when hearing a stay application under s 6 of the IAA.
Sim Chay Koon and others v NTUC Income Insurance Co-operative Ltd	High Court	Yes	[2016] 2 SLR 871	Singapore	Held that the prima facie standard similarly applies for stay applications under s 6 of the AA.
Gabriel Peter & Partners v Wee Chong Jin	Court of Appeal	Yes	[1997] 3 SLR(R) 649	Singapore	States that abuse of process is a concept by which the court ascertains whether the proceedings in question constitute an improper use of its machinery.
Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd (formerly Contour Aerospace Ltd)	House of Lords	Yes	[2014] AC 160	United Kingdom	States that abuse of process is a concept which informs the exercise of the court’s procedural powers.
Dayang (HK) Marine Shipping Co, Ltd v Asia Master Logistics Ltd	Deputy High Court Judge	Yes	[2020] HKCU 494	Hong Kong	The judge found that the debtor failed to demonstrate triable issues, as its counterclaim was founded on pure allegations, and was not substantiated by precise factual evidence.
Hollmet AG & another v Merdian Success Metal Supplies Ltd	Court of Appeal	Yes	[1997] HKLRD 828	Hong Kong	If a company wishes to obtain a stay of winding-up proceedings on the basis that the underlying debt upon which the statutory notice is founded is disputed, it must establish in the normal way that there is a bona fide dispute on substantial grounds.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Arbitration Act (Cap 10, 2002 Rev Ed)	Singapore
International Arbitration Act (Cap 143A, 2002 Rev Ed)	Singapore
Companies Act (Cap 50, 2006 Rev Ed)	Singapore
Bankruptcy Act (Cap 20, 2009 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Global Master Repurchase Agreement
GMRA
Global Depository Receipts
GDRs
Repo Ratio
Margin Trigger Event Notice
Liquidation Repo Ratio
Liquidation Event
Early Termination Date
Default Market Value
Net Value
OFAC Sanctions
Prima Facie Standard
Triable Issue Standard

15.2 Keywords

winding up
arbitration agreement
disputed debt
prima facie
triable issue
insolvency

17. Areas of Law

Area Name	Relevance Score
Winding Up	95
Arbitration	80
Disputed Debt	75
Prima Facie	65
Company Law	60
Standard of Review	60
Contract Law	50
Banking and Finance	30

16. Subjects

Arbitration
Winding-Up
Insolvency
Contract Law