EXXA Network Pte Ltd v SQ2 Fintech Pte Ltd: Stay of Proceedings for Mediation and Arbitration
In a dispute between EXXA Network Pte Ltd and SQ2 Fintech Pte Ltd, the High Court of Singapore granted a stay of court proceedings in favour of mediation and arbitration. EXXA Network claimed SQ2 Fintech breached a contract by failing to deliver a cryptocurrency trading platform. The court's decision was based on a multi-tiered dispute resolution clause in the Founders Shareholders’ Agreement between the parties.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
All proceedings in this action shall be stayed pursuant to s 8 of the Mediation Act and s 6 of the Arbitration Act.
1.3 Case Type
Civil
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court grants stay of proceedings in favor of mediation and arbitration in a dispute between EXXA Network and SQ2 Fintech.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| EXXA Network Pte Ltd | Plaintiff | Corporation | Proceedings Stayed | Stayed | Walter Silvester, Gilbert Chng, Tan Hoe Shuen |
| SQ2 Fintech Pte Ltd | Defendant | Corporation | Stay of Proceedings Granted | Won | Kelvin Poon, Timothy Ang |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Justin Yeo | Assistant Registrar | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Walter Silvester | Silvester Legal LLC |
| Gilbert Chng | Silvester Legal LLC |
| Tan Hoe Shuen | Silvester Legal LLC |
| Kelvin Poon | Rajah & Tann Singapore LLP |
| Timothy Ang | Rajah & Tann Singapore LLP |
4. Facts
- Plaintiff sought Defendant’s services to construct a platform for cryptocurrency trading.
- On 20 April 2019, the Defendant sent to the Plaintiff a quote setting out the framework for the development of the Superwallet Platform and DEVO+.
- The Plaintiff, the Defendant and the then-shareholders of the Plaintiff subsequently entered into a Founders Shareholders’ Agreement dated 12 August 2019.
- In October 2019, difficulties arose between the Plaintiff and the Defendant concerning the Project.
- On 26 March 2021, the Plaintiff served the writ in the present suit on the Defendant, claiming that the Defendant had breached the SPQ by its failure to deliver DEVO+.
- The suit was initially stayed because the Defendant commenced voluntary winding up proceedings.
- In July 2021, the Plaintiff sought and obtained the leave of the Court to continue the suit.
5. Formal Citations
- EXXA Network Pte Ltd v SQ2 Fintech Pte Ltd, HC/S 142 of 2021, [2021] SGHCR 9
6. Timeline
| Date | Event |
|---|---|
| Defendant sent Plaintiff Superwallet Platform Quote | |
| Founders Shareholders’ Agreement dated | |
| Difficulties arose between Plaintiff and Defendant concerning the Project | |
| Plaintiff served the writ in the present suit on the Defendant | |
| Plaintiff sought and obtained the leave of the Court to continue the suit | |
| Hearing date | |
| Judgment date |
7. Legal Issues
- Scope of Arbitration Agreement
- Outcome: The court found that the dispute fell within the ambit of the dispute resolution clause.
- Category: Substantive
- Validity and Applicability of Dispute Resolution Clause
- Outcome: The court found that the dispute resolution clause was not clearly invalid or inapplicable and that the issue of validity or applicability of the clause ought to be determined by the arbitral tribunal at first instance.
- Category: Substantive
- Stay of Court Proceedings in Favor of Arbitration
- Outcome: The court ordered that all proceedings in the action be stayed pursuant to s 8 of the Mediation Act and s 6 of the Arbitration Act.
- Category: Procedural
8. Remedies Sought
- Monetary Damages
9. Cause of Actions
- Breach of Contract
10. Practice Areas
- Arbitration
- Commercial Litigation
11. Industries
- Information Technology
- Financial Technology
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Ling Kong Henry v Tanglin Club | Court of Appeal | Yes | [2018] 5 SLR 871 | Singapore | Cited for the principle that the intention to avoid dispute resolution in court by having the matter proceed to arbitration ought to be upheld. |
| Tomolugen Holdings Ltd v Silica Investors Ltd | Court of Appeal | Yes | [2016] 1 SLR 373 | Singapore | Cited for the principles governing the Court’s exercise of power in the context of a stay of court proceedings in favour of arbitration. |
| Sim Chay Koon and others v NTUC Income Insurance Co-operative Ltd | Court of Appeal | Yes | [2016] 2 SLR 871 | Singapore | Cited for the principles governing the Court’s exercise of power in the context of a stay of court proceedings in favour of arbitration. |
| Tan Wee Tin and others v Singapore Swimming Club | High Court | Yes | [2017] SGHCR 21 | Singapore | Cited for the principle that a stay pending an agreed multi-tiered dispute resolution process which required the parties to first attempt mediation of any disputes that arise should be granted. |
| Maniach Pte Ltd v L Capital Jones Ltd and another | High Court | Yes | [2016] 3 SLR 801 | Singapore | Cited for the principle that the word “connected” and the phrase “connected with” have been found sufficiently broad to include any subject matter with a prima facie connection to the arbitration agreement. |
| BMO v BMP | High Court | Yes | [2017] SGHC 127 | Singapore | Cited for the principle that the word “connected” and the phrase “connected with” have been found sufficiently broad to include any subject matter with a prima facie connection to the arbitration agreement. |
| BXH v BXI | High Court | Yes | [2020] 3 SLR 1368 | Singapore | Cited for the principle that it is generally presumed that parties intend a dispute resolution clause to survive the cessation of the substantive contract. |
| Nippon Catalyst Pte Ltd v PT Trans-Pacific Petrochemical Indotama and another | High Court | Yes | [2018] SGHC 126 | Singapore | Cited for the principle that it is generally presumed that parties intend a dispute resolution clause to survive the cessation of the substantive contract. |
| The “Navios Koyo” | Court of Appeal | Yes | [2021] SGCA 99 | Singapore | Cited for the principle that conditions which do not facilitate or seek to give effect to the arbitration agreement ought to be subject to a higher level of scrutiny. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Mediation Act 2017 | Singapore |
| Arbitration Act (Cap 10, 2002 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Superwallet Platform
- DEVO+
- Founders Shareholders’ Agreement
- Dispute Resolution Clause
- Mediation
- Arbitration
- Stay of Proceedings
15.2 Keywords
- arbitration
- mediation
- stay of proceedings
- contract
- fintech
- cryptocurrency
16. Subjects
- Arbitration
- Contract Law
- Civil Procedure
17. Areas of Law
- Arbitration Law
- Contract Law
- Civil Procedure