Dispute

In Tjong Very Sumito v Antig Investments Pte Ltd [2009] SGCA 41 the Singapore Court of Appeal tackled a problem which has long bedevilled arbitration law. A claim is brought by party X against party Y. Y seeks a stay of the proceedings on the basis that there is an arbitration clause. A’s riposte is that there is no dispute between the parties. It is settled in England that the English courts will not hear arguments on the matter, and will grant a stay: Halki Shipping Corporation v Sopex Oils Ltd [1998] 1 WLR 726. However, the position where there has been an admission of liability by Y is as yet unresolved. Tjiong Very Sumito throws clear light on this point. The case was heard by Justices of Appeal V K Rajah and Andrew Phang, the court’s judgment being delivered by the former.

Sumito: the facts

On 23 November 2004 the parties entered into a Share Sale and Purchase Agreement (SPA) under which Sumito agreed to sell, and Antig agreed to buy, 72% of the paid up share capital of PT Deefu, an Indonesian coal mining company. The SPA was governed by the law of Indonesia, but any disputes were to be resolved by arbitration in Singapore under the auspices of the Singapore International Arbitration Centre (SIAC). Subsequently, in the course of 1995, the SPA was supplemented by four Supplemental Agreements (SSPAs). The fourth SSPA varied the SPA by setting out new payment terms: the balance of the price, some US$8,500,000.00 was to be paid. The effect of the variation was that U$2m was to be paid to a third party agent, Aventi, on 13 June 2007, and a further US$3.7m was to be paid to Aventi on 13 June 2008.