Founder Group v Singapore Commodities: Winding Up Stay & Payment Out Order Dispute
In the General Division of the High Court of Singapore, Founder Group (Hong Kong) Ltd (in liquidation) sought a winding-up order against Singapore Commodities Group Co, Pte Ltd, based on an unpaid debt of US$14.12m. The defendant denied the debt and initiated arbitration. The winding-up application was stayed pending arbitration, with the defendant paying the debt amount into court. After the arbitration concluded without a definitive finding on the debt's existence, the claimant applied for the money to be paid out. The court granted the Payment Out Order because the defendant failed in the arbitration and allowed the claimant to withdraw the winding-up application, ordering the defendant to pay $85,000 in costs.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Payment Out Order granted; Claimant granted leave to withdraw the winding up application; Defendant to pay claimant's costs.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Stay of winding-up application and payment out of court. The court ordered payment out because the defendant failed in arbitration.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Founder Group (Hong Kong) Ltd (in liquidation) | Claimant | Corporation | Payment Out Order Granted | Won | |
| Singapore Commodities Group Co, Pte Ltd | Defendant | Corporation | Payment Out Order Granted | Lost |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Vinodh Coomaraswamy | Judge | Yes |
4. Counsels
4. Facts
- Claimant sought to wind up the defendant based on an unpaid debt of US$14.12m.
- Defendant denied the debt and commenced arbitration.
- Winding-up application was stayed upon the defendant paying US$14.12m into court.
- Arbitration concluded without a definitive finding on the debt's existence.
- Claimant applied for the money paid into court to be paid out to them.
- Defendant did not object to the payment out order if the basis of the order is that the Sum is to be paid out to the claimant because the defendant failed in the Arbitration and not because the Award did find that the Debt does exist.
5. Formal Citations
- Founder Group (Hong Kong) Ltd (in liquidation) v Singapore Commodities Group Co, Pte Ltd, Companies Winding Up No 120 of 2022 (Summons No 620 of 2024), [2024] SGHC 280
6. Timeline
| Date | Event |
|---|---|
| Contract signed for the sale of copper cathodes. | |
| Invoice issued by the claimant to the defendant for US$14.12m. | |
| Defendant's books show that the defendant owes the Debt to the claimant. | |
| Audit confirmations sent by the defendant’s Singapore and PRC auditors to the claimant. | |
| Claimant went into liquidation. | |
| Liquidators issued a letter of demand to the defendant. | |
| Liquidators' solicitors issued a letter of demand to the defendant. | |
| Parties attempted to agree to terms of a standstill. | |
| Defendant commenced Arbitration with CIETAC. | |
| Claimant received a further audit confirmation from the defendant’s Singapore auditor. | |
| Claimant received a letter from CIETAC enclosing the defendant’s request for arbitration. | |
| Claimant presented the CWU against the defendant. | |
| CWU stayed until the conclusion of the Arbitration upon the defendant paying a sum equivalent to the Debt into court. | |
| Defendant applied for leave under s 130(1) of the Act to pay the Sum into court. | |
| Defendant paid the Sum into court. | |
| Tribunal issued the Award. | |
| Claimant's solicitors asked for the stay of the CWU to be lifted. | |
| Stay of the CWU lifted by consent. | |
| Claimant filed the Payment Out Application. | |
| Joint hearing for the Payment Out Application and the CWU. | |
| Defendant appealed against the decision on both the Payment Out Application and the CWU. | |
| Notes of Argument. | |
| Judgment issued. |
7. Legal Issues
- Payment into Court
- Outcome: The court ordered payment out because the defendant failed in arbitration.
- Category: Procedural
- Sub-Issues:
- Conditions for payment out of court
- Effect of arbitration award on payment out
- Stay of Winding-Up Application
- Outcome: The court initially stayed the winding-up application pending arbitration.
- Category: Procedural
- Sub-Issues:
- Conditions for granting a stay
- Effect of payment into court on stay
8. Remedies Sought
- Winding-Up Order
- Payment Out Order
9. Cause of Actions
- Winding-Up Application
10. Practice Areas
- Commercial Litigation
- Insolvency Litigation
- Arbitration
11. Industries
- Commodities Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Nuoxi Capital Limited (in liquidation) v Peking University Founder Group Company Limited | Court of First Instance | Yes | [2022] 2 HKC 1 | Hong Kong | Cited to show that PUFG is broadly speaking, the commercial arm of Peking University. |
| Nuoxi Capital Limited (in liquidation in the British Virgin Islands) v Peking University Founder Group Company Limited | Court of First Instance | Yes | [2022] 5 HKLRD 837 | Hong Kong | Cited to show that PUFG is broadly speaking, the commercial arm of Peking University. |
| Peal Furniture Co Ltd v Adrian Share (Interiors) Ltd | English Court of Appeal | Yes | [1977] 1 WLR 464 | England | Discusses the principle that if a company were insolvent, the plaintiffs would be given a preference over the general body of creditors, which would produce a result which in a general sense would be inequitable. |
| W A Sherratt Ltd v John Bromley (Church Stretton) Ltd | English Court of Appeal | Yes | [1985] 2 WLR 742 | England | Discusses the principle that where a defendant pays money into court in satisfaction of a claim, the plaintiff is a secured creditor of the defendant to the extent of the money paid into court in the defendant’s subsequent insolvency. |
| Shandong Chenming Paper Holdings Ltd v Arjowiggins HKK 2 Ltd | Hong Kong Court of Final Appeal | Yes | [2022] 5 HKC 318 | Hong Kong | Discusses the principle that the payment in was plainly made to secure the creditor’s interest in obtaining repayment of the debt, being the subject of the statutory demand, pending the outcome of any such appeal. |
| Ng Kin Siu v Gentle Soar Limited | Hong Kong Court of First Instance | Yes | [2024] HKCU 935 | Hong Kong | Discusses the principle that where a sum of money, calculated by reference to the amount of the debt owed by a company, is paid into Court as security to obtain a stay or adjournment of winding up proceedings pending appeal, the whole of the sum so paid in, together with accrued interest, should be paid out to the respondent who is successful in resisting the appeal. |
| Cheng Lip Kwong v Bangkok Bank Ltd | Court of Appeal | Yes | [1992] 1 SLR(R) 941 | Singapore | Discusses the principle that the respondents are secured creditors to the extent of the security paid into court or such part of it as would be sufficient to satisfy the taxed costs of the respondents. |
13. Applicable Rules
| Rule Name |
|---|
| Rules of Court 2021 |
| Order 3 r 2(2) of the Rules of Court 2021 |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding-Up
- Payment into Court
- Payment Out Order
- Arbitration Award
- Stay of Proceedings
- Security for Debt
15.2 Keywords
- winding up
- payment into court
- payment out order
- arbitration
- insolvency
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Insolvency Law | 90 |
| Commercial Disputes | 60 |
| Arbitration | 50 |
| Breach of Contract | 40 |
| Contracts | 30 |
16. Subjects
- Insolvency
- Civil Procedure
- Arbitration