AnAn Group v. VTB Bank: Arbitrability, Winding Up, and Liquidators' Remuneration

AnAn Group (Singapore) Pte Ltd appealed against the High Court's decision dismissing its application for VTB Bank (Public Joint Stock Company) to bear the remuneration and expenses of AnAn's former liquidators after the winding-up order against AnAn was reversed by the Court of Appeal. The court dismissed the appeal, holding that it did not have the power to order VTB Bank to pay the liquidators' fees and that the issue of liability for the liquidators' fees should be determined in arbitration.

1. Case Overview

1.1 Court

Court of Appeal of the Republic of Singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The Court of Appeal addressed whether VTB Bank should bear AnAn Group's liquidators' fees after a reversed winding-up order, ultimately dismissing the appeal and deferring to arbitration.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
AnAn Group (Singapore) Pte LtdAppellant, DefendantCorporationAppeal DismissedLost
VTB Bank (Public Joint Stock Company)Respondent, PlaintiffCorporationAppeal UpheldWon

3. Judges

Judge NameTitleDelivered Judgment
Andrew Phang Boon LeongJustice of the Court of AppealNo
Steven ChongJustice of the Court of AppealYes
Quentin LohJudge of the Appellate DivisionNo

4. Counsels

Counsel NameOrganization
Lee Eng BengRajah & Tann Singapore LLP
Chew XiangRajah & Tann Singapore LLP
Cheong Tian Ci TorstenRajah & Tann Singapore LLP
Muhammad Taufiq bin SuraidiTan Rajah & Cheah
Shobna ChandranTan Rajah & Cheah
Yong Manling JasmineTan Rajah & Cheah

4. Facts

  1. AnAn and VTB entered into a global master repurchase agreement (GMRA) in 2017.
  2. AnAn would sell VTB global depository receipts (GDRs) of shares in EN+ Group PLC.
  3. AnAn would repurchase the GDRs from VTB at a later date at pre-agreed rates.
  4. AnAn failed to restore and/or maintain sufficient collateral for the loan arrangement.
  5. VTB sent a default notice to AnAn on 12 April 2018.
  6. VTB served a statutory demand on AnAn for US$170m on 23 July 2018.
  7. VTB filed CWU 183 seeking a winding up order against AnAn on 17 August 2018.
  8. The Court of Appeal reversed the High Court’s decision on 7 April 2020.

5. Formal Citations

  1. AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Company), Civil Appeal No 23 of 2021, [2021] SGCA 112

6. Timeline

DateEvent
Parties entered into a global master repurchase agreement
Events occurred which culminated in AnAn failing to maintain sufficient collateral
Events occurred which culminated in AnAn failing to maintain sufficient collateral
VTB sent a default notice to AnAn
Designated early termination date of the GMRA
VTB served on AnAn a statutory demand for the sum of US$170m
VTB filed CWU 183 seeking a winding up order against AnAn
Court of Appeal reversed the High Court’s decision
The Liquidators filed CA/SUM 68/2020 to this court, seeking to be paid their remuneration and expenses out of the assets of AnAn
AnAn filed CA/SUM 74/2020 seeking an order for VTB to bear all the remuneration and expenses incurred by the Liquidators
Court decided that both summonses ought to be made to the High Court in the first instance and made no order accordingly
The Liquidators filed SUM 3569 to the High Court
AnAn filed SUM 3902, seeking an order that VTB is liable to bear all the expenses and remuneration properly incurred by the Liquidators
The two summonses were heard
The Judge also considered the parties’ (and the Liquidators’) further submissions filed
Judge issued the Judgment
VTB filed CA/SUM 77/2021 seeking to adduce fresh evidence
Court heard counsel’s oral submissions and reserved judgment
Judgment delivered

7. Legal Issues

  1. Arbitrability of Dispute
    • Outcome: The court held that the dispute over the liquidators' fees could fall within the scope of the arbitration agreement.
    • Category: Substantive
  2. Liability for Liquidators' Fees
    • Outcome: The court held that VTB Bank should not be made to bear the liquidators' fees.
    • Category: Substantive
  3. Interpretation of 'Costs' under SCJA
    • Outcome: The court held that 'costs' under the SCJA does not include liquidators' remuneration and expenses.
    • Category: Substantive
  4. Court's Inherent Power to Order Costs
    • Outcome: The court held that it has the inherent power to order a petitioning creditor to bear a liquidator's fees and expenses, but declined to exercise that power in this case.
    • Category: Procedural
  5. Functus Officio
    • Outcome: The court held that it was not functus officio in relation to the issue of who is to bear the liquidators’ fees.
    • Category: Procedural

8. Remedies Sought

  1. Indemnity for liquidators' fees
  2. Order for VTB to bear liquidators' fees

9. Cause of Actions

  • Breach of Contract

10. Practice Areas

  • Commercial Litigation
  • Arbitration
  • Insolvency

11. Industries

  • Finance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Company)Court of AppealYes[2020] 1 SLR 1158SingaporeReversed the High Court’s decision on the winding up order, holding that there was a prima facie dispute over the debt and that the dispute should be resolved via arbitration.
Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore)Court of AppealYes[2011] 3 SLR 414SingaporeCited for the principle that certain disputes involving insolvency matters are non-arbitrable as a matter of public policy.
L Capital Jones Ltd and another v Maniach Pte LtdHigh CourtYes[2017] 1 SLR 312SingaporeCited to support the argument that a respondent need not file a formal Notice of Appeal in respect of the arbitration issue.
Cheong Soh Chin and others v Eng Chiet Shoong and othersHigh CourtYes[2018] SGHC 130SingaporeCited for the requirements of estoppel.
Goh Nellie v Goh Lian Teck and othersHigh CourtYes[2007] 1 SLR(R) 453SingaporeCited for the definition of res judicata.
Teelek Realty Pte Ltd and others v Ng Tang HockHigh CourtYes[2021] 2 SLR 719SingaporeCited as an example where the court ordered the second appellant to be personally liable for the liquidator’s remuneration and expenses.
Ho Wing On Christopher and others v ECRC Land Pte Ltd (in liquidation)High CourtYes[2006] 4 SLR(R) 817SingaporeCited for the distinction between adjudicatory and supervisory jurisdiction.
Tan Cheng Bock v Attorney-GeneralHigh CourtYes[2017] 2 SLR 850SingaporeCited for the canon of interpretation that an identical expression used in the same statute should bear the same meaning.
Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd)High CourtYes[2021] 2 SLR 478SingaporeCited for the court’s power to order the costs of proceedings against a non-party.
Re Pac-Asian Services Pte LtdHigh CourtYes[1987] SLR(R) 717SingaporeAlluded to the existence of a general power to order a petitioner to bear the liquidator’s expenses and remuneration.
Standard Chartered Bank (Singapore) Ltd v Construction Professional Resources Pte LtdHigh CourtYes[2019] 5 SLR 709SingaporeCited for the principle that the court is entitled to rely on its inherent powers in situations where no statutory provision applies.
Chan Yun Cheong (trustee of the will of the testator) v Chan Chi Cheong (trustee of the will of the testator)High CourtYes[2021] 2 SLR 67SingaporeCited for the principle that there is no statutory exclusion of the power we are concerned with.
Siva Kumar s/o Avadiar v Quek Leng Chuang and othersHigh CourtYes[2021] 1 SLR 451SingaporeCited for the diverse situations in which the invocation of its inherent powers to remedy injustice was appropriate.
Harmonious Coretrades Pte Ltd v United Integrated Services Pte LtdHigh CourtYes[2020] 1 SLR 206SingaporeCited for the diverse situations in which the invocation of its inherent powers to remedy injustice was appropriate.
Re Nalpon Zero Geraldo MarioHigh CourtYes[2013] 3 SLR 258SingaporeCited for the diverse situations in which the invocation of its inherent powers to remedy injustice was appropriate.
Locker Group Pty Ltd v HEA Australia Pty LtdSupreme Court of VictoriaYes[2015] VSC 752AustraliaCited for the principle that the petitioning creditor had failed to disclose material information.
In the matter of Complete Investing Services Pty Ltd (in liq)Supreme Court of New South WalesYes[2018] NSWSC 1003AustraliaCited for the principle that the court ordered the applicant creditor and the company to equally bear the costs of the liquidator, following the decision to set aside the winding up order.
In the matter of Complete Investing Services Pty Ltd (in liq) (Costs)Supreme Court of New South WalesYes[2018] NSWSC 1059AustraliaCited for the principle that the court ordered the applicant creditor and the company to equally bear the costs of the liquidator, following the decision to set aside the winding up order.
Re Bridal Centre Co Pty LtdUnknownYes(1985) 9 ACLR 481UnknownCited for the principle that in many cases where the petition is dismissed, it would seem unjust that the remuneration should come out of the assets of the company.
Victorian Workcover Authority v Barroaghan Pty LtdSupreme Court of VictoriaYes[2001] VSC 413AustraliaCited for the principle that the petitioning creditor was found to have abused the winding up process because it failed to disclose significant information, and seriously misrepresented the facts.
Baldwin v BaldwinCalifornia Court of AppealYes(1947) 82 Cal App 2d 851United StatesCited for the principle that the court agreed with the lower court’s findings that the appointment of receiver “was made in reliance upon the [appellant’s] false allegations” and that the receivership was consequently “unnecessary, improvident, wrongful and inequitable”.
Deputy Commissioner of Taxation v Starpicket Pty Ltd (No 2)Federal Court of AustraliaYes[2013] FCA 699AustraliaCited for the principle that there may be circumstances in which such an order may be appropriate – for example where a winding up application has been brought in circumstances which amount to an abuse of process.
Diamond Glass Enterprise Pte Ltd v Zhong Kai Construction Co Pte LtdHigh CourtYes[2021] 2 SLR 510SingaporeCited for the principle that our decision in AnAn (CA) had “significantly altered the law in this area in so far as crossclaims or disputed debts which are the subject of arbitration agreements are concerned”.
Ong Jane Rebecca v Lim Lie Hoa and other appeals and other mattersHigh CourtYes[2021] 2 SLR 584SingaporeCited for the definition of abuse of process.
Miya Manik v Public Prosecutor and another matterCourt of AppealYes[2021] SGCA 90SingaporeCited for the definition of abuse of process.
Vinmar Overseas (Singapore) Pte Ltd v PTT International Trading Pte LtdHigh CourtYes[2018] 2 SLR 1271SingaporeCited for the principle that the threshold for abusive conduct is very high.
RDC Concrete Pte Ltd v Sato Kogyo (S) Pte Ltd and another appealHigh CourtYes[2007] 4 SLR(R) 413SingaporeCited for the principle that contractual liability is strict.
BDG v BDHHigh CourtYes[2016] 5 SLR 977SingaporeCited for the test of bona fide dispute between the parties.
VTB Bank (Public Joint Stock Company) v AnAn Group (Singapore) Pte LtdHigh CourtYes[2018] SGHC 250SingaporeHigh Court’s decision in CWU 183.

13. Applicable Rules

Rule Name
Order 59 Rule 1(1) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed)
Order 1 Rule 2(2) of the Rules of Court (Cap 322, R 5, 2014 Rev Ed)
Order 57 Rule 9A(5) of the Rules of Court
Order 92 Rule 4 of the Rules of Court

14. Applicable Statutes

Statute NameJurisdiction
Supreme Court of Judicature Act (Cap 322, 2007 Rev Ed)Singapore
Companies Act (Cap 50, 2006 Rev Ed)Singapore
Insolvency, Restructuring and Dissolution Act 2018 (Act 40 of 2018)Singapore
Civil Procedure Act 2005New South Wales

15. Key Terms and Keywords

15.1 Key Terms

  • Global Master Repurchase Agreement
  • GMRA
  • Global Depository Receipts
  • GDRs
  • Winding Up
  • Liquidators' Remuneration
  • Arbitration Clause
  • Event of Default
  • Prima Facie Dispute
  • Inherent Powers
  • Functus Officio

15.2 Keywords

  • arbitration
  • winding up
  • liquidators
  • remuneration
  • costs
  • inherent powers
  • functus officio

17. Areas of Law

Area NameRelevance Score
Winding Up90
Liquidators’ remuneration80
Arbitration75
Civil Procedure70
Company Law60
Jurisdiction50
Functus Officio40

16. Subjects

  • Arbitration
  • Insolvency
  • Civil Procedure
  • Companies Law