Speakers: Andrew Chan & Ashley Bell
Chair: Michael Hwang SC
As modern business becomes more international and cross-border in nature, it is inevitable that the areas of insolvency and arbitration intersect. This leads to fundamental tensions between the private intentions of parties expressed in arbitration clauses, and in the broader public issues that are addressed by insolvency laws.
On 25 February 2016, we were privileged to have Andrew Chan of Allen & Gledhill LLP and Ashley Bell of DLA Piper share with us their insights into the intersection between insolvency and arbitration. Chairing the session was the illustrious Mr Michael Hwang SC. The talk was jointly organised by the Singapore Institute of Arbitrators and the Turnaround Management Association, and was well attended with 34 attendees, attesting to the interest in the topic.
The topics that were covered ranged from the effect of insolvency on an arbitration agreement to recognition and assistance of foreign insolvency proceedings, and on whether insolvency proceedings could be subject to arbitration. Andrew and Ashley also expounded on anti-suit injunctions and insolvency, and whether cross-border insolvency meant an immediate stay of proceedings.
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One area of interest which was discussed was whether insolvency claims were capable of arbitration. In Singapore, the position set out in Larsen Oil and Gas Ptd Ltd v Petropod Ltd [2011] 3 SLR 414 and Tomolugen Holdings Ltd and another v Silica Investors Ltd and other appeals [2016] 1 SLR 373 is that they are not. This prompted the Chairman, Mr Michael Hwang SC to pose the question whether it was possible for an arbitrator to make an order for parties to voluntarily wind up a company. As this issue has not yet been decided, Andrew Chan ventured that based on the general principles pertaining to both arbitration and liquidation, this might very well be possible.
Another issue of interest was the enforcement of an arbitration award when there was an ongoing rehabilitation of the company. Ashley Bell presented on the Hong Kong court’s decision on this issue in HKIE v Aoki [2005]. In that case, an arbitration was commenced in Hong Kong, but before the award was rendered the respondent entered into a court-supervised rehabilitation process in Japan. When the Applicant applied to enforce the award, the Hong Kong courts allowed judgment to be entered, but took into account the Japanese rehabilitation proceedings and exercised its discretion to refuse enforcement. This suggests that where there are ongoing court supervised insolvency proceedings in a foreign jurisdiction, local courts may still refuse to enforce a local arbitration award on grounds of international comity as a public policy grounds.
A cocktail mixer capped off the successful event, and participants took the opportunity to mingle and pose further questions to Andrew and Ashley. We look forward to more such events in the coming months.
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Reported by:
THAM WEI CHERN - Director, Duane Morris & Selvam LLP