Fastfreight Pte Ltd v Bulk Trident Shipping Ltd

[1] The dispute between the plaintiff and defendant in these proceedings arises in the context of an ongoing arbitration between the parties that is taking place in London.

[3] The plaintiff is a charterer incorporated in Singapore. It is a vessel operator which works with clients and ship owners to provide freight solutions. The defendant is a company incorporated in Liberia. It is the registered owner of the “ANNA-DOROTHEA” (the “Vessel”).

[4] The plaintiff and defendant entered into a time charterparty (the “Charterparty”) by way of a fixture recap dated 13 April 2021 (the “Recap”) for the carriage of bulk cargo from India to China by the Vessel. The Charterparty dated 18 September 2020 incorporated terms of a pro forma New York Produce Exchange (“NYPE”) 1993 charter (the “NYPE Form”). The NYPE Form was amended by the terms of the Recap, which included certain additional clauses (the “Additional Clauses”). The Charterparty contained an arbitration agreement pursuant to clause 22 of the Recap and clause 45 of the NYPE Form. The arbitration agreement provided for disputes arising out of the Charterparty to be arbitrated in London and for English law to be the governing law.

[5] At around the same time, the plaintiff entered into a voyage charterparty (the “Sub-Charterparty”) with Shyam Metalics and Energy Ltd (the “sub-charterer”) by way of a Fixture Note dated 12 April 2021. Under the terms of the Sub-Charterparty, the plaintiff was under an obligation to ensure that the Vessel would “… proceed to the discharging port(s) … and there deliver the cargo”.

[7] The defendant commenced arbitration in London against the plaintiff (the “London arbitration”). The defendant made various claims against the plaintiff in relation to alleged breaches under the Charterparty, including a claim for unpaid hire in the sum of US$2,147,717.79 for the period of 4 May 2021 to 28 August 2021. The plaintiff raised a counterclaim against the defendant totalling US$7,661,844.39 for damages derived from (a) the loss and damage claimed by the sub-charterer against the plaintiff; (b) the amount of demurrage which would have fallen due to the plaintiff under the Sub-Charterparty if not for the defendant’s alleged breaches of the Charterparty; and (c) overpaid hire. I pause to note that the sum representing the plaintiff’s counterclaim was inconsistently stated in the plaintiff’s written submissions and the affidavit filed by the plaintiff’s Syed Asad Raza Naqvi in support of OS 66/2022. Syed Asad Raza Naqvi’s affidavit did not exhibit the documents in support of the sum, but it referenced his affidavit filed in support of HC/ADM 103/2021 (“ADM 103/2021”), which were proceedings brought by the plaintiff to arrest the Vessel in Singapore (see [18] below). In this judgment, I have referred to the sums in the documentary evidence contained in Syed Asad Raza Naqvi’s ADM 103/2021 affidavit of 13 January 2022.

[8] Shortly after the commencement of the London arbitration, the defendant applied for a partial final award for the unpaid hire which, as already mentioned (at [7]), was for a sum of US$2,147,717.79. The defendant’s application was premised on its construction of clause 11 of the NYPE Form, which states:

[9] The defendant took the view that, in view of clause 11, the parties had effectively agreed to a “pay now, argue later” regime in respect of charter hire.

[10] The plaintiff contested the application. In the plaintiff’s view, no hire even fell due to begin with because the Vessel was off-hire and, as such, clause 11 was inapplicable. As earlier mentioned (at [6]), three members of the Vessel’s crew tested positive for COVID-19 before the Vessel arrived at the Lanqiao port, and consequently, she was not allowed to berth at the port to discharge the cargo. The plaintiff claims that the defendant was in breach of its guarantee that, on delivery and upon reaching the first load port, the Vessel’s crew was to be free of COVID-19. The guarantee in clause 32 of the Recap provides:

[11] The plaintiff also argues that the Vessel was off-hire in view of clause 17 of the NYPE Form and clause 67 of the Additional Clauses. Clause 17 of the NYPE Form provides:

[12] Clause 67 of the Additional Clauses provides:

[13] As already described above (at [6]), the Vessel did not ultimately deliver the cargo at the Lanqiao port. The plaintiff alleges that this was a result of the defendant’s inability or failure to comply with the plaintiff’s legitimate orders as charterer, and that this exposed the plaintiff to claims against it by the sub-charterer. This formed the basis of part of the plaintiff’s cross-claim in the London arbitration.

[15] Instead, the plaintiff amended its counterclaim in the London arbitration to include a claim for the PFA Sum (such that the plaintiff’s cross-claim was now for an increased amount of US$9,809,562.18) and sought leave to appeal against the PFA in the English courts. On 1 April 2022, the plaintiff was granted leave to appeal on a question of law, the question being:

[16] In granting leave for the plaintiff to appeal, Andrew Baker J found that although “[t]he arbitrators answered the question of law ‘Yes’ … the contrary [was] also well arguable” and “the arbitrators’ decision on the question of law … [was] open to serious doubt”.

[17] Counsel for the plaintiff informed me at the hearing on 27 May 2022 that the appeal before the English courts is likely be heard in October 2022.

[18] On 28 December 2021, the plaintiff arrested the Vessel in Singapore to obtain security for its cross-claim in the London arbitration: ADM 103/2021. The plaintiff included the PFA Sum as part of the quantum of security it demanded on the basis that “[the plaintiff had] incurred a liability to pay [the PFA Sum]”. The defendant furnished the full sum of security demanded by way of a letter of undertaking dated 5 January 2022 for the sum of US$11,269,629.34 issued by the defendant’s protection and indemnity club. According to the defendant, it was required to put up US$7,869,629.34 as cash collateral to procure the said letter of undertaking.

[20] In the course of these proceedings in Singapore, on 16 February 2022, the defendant’s Singapore solicitors wrote to the plaintiff’s Singapore solicitors stating that the defendant had reason to believe that the plaintiff was unable to carry on its business as a going concern or pay its debts as and when they fell due. The defendant requested that the plaintiff provide its financial statements for the financial years ending 31 December 2020 (“FY 2020”) and 31 December 2021 (“FY 2021”) as evidence of its solvency. On 23 February 2022, the plaintiff provided a redacted copy of its audited financial statements for FY 2020 (the “2020 Financial Statements”).

[21] The plaintiff argues that the injunction should be granted because the plaintiff has a cross-claim of a value that exceeds the PFA Sum and the cross-claim is subject to the arbitration agreement between parties. The cross-claim is for the sum of US$9,809,562.18. This sum comprises the following:

[22] The plaintiff also contends that the PFA Sum is a disputed debt in light of its cross-claim, as well as because of its appeal against the PFA before the English courts. The plaintiff emphasises that, in view of the arbitration agreement between the parties, it only needs to meet a prima facie standard in showing that the PFA Sum is a disputed debt or that it has a cross-claim of a value exceeding the PFA Sum. This standard is lower than the “unlikely to succeed” standard (or triable issue standard) that would typically apply where the relevant cross-claim or disputed debt is not subject to arbitration.

[23] The plaintiff also argues that the balance of convenience favours the grant of the injunction. According to the plaintiff, there is a lower risk of injustice if the injunction is granted since it would mean that the status quo is maintained pending the outcome of the London arbitration. Although the defendant would have to await the final outcome of the London arbitration before it presents a winding-up application against the plaintiff (if it is so entitled to do so at that juncture), the defendant would suffer no prejudice if the injunction is granted. On the other hand, if the injunction is not granted, a winding-up application would trigger an event of default under the plaintiff’s financing instruments and also cause serious reputational damage. The financial implications of such an application being presented would also severely affect the plaintiff’s ability to pursue its counterclaim against the defendant in the London arbitration.

[24] The defendant argues that it should not be restrained from presenting a winding-up application as the PFA Sum is not one that is prima facie disputed and there is no prima facie cross-claim. According to the defendant, the PFA Sum cannot be characterised as a “disputed debt” because the intention and effect of the PFA is such that the plaintiff is immediately obliged and required to make payment of the PFA Sum to the defendant, regardless of the plaintiff’s claims of off-hire (see [10]–[11] above). The defendant also submits that there is no prima facie cross-claim because there is no merit in the plaintiff’s assertions that there exists a cross-claim exceeding or equal to the PFA Sum. In this regard, the defendant points to the tribunal’s finding in the PFA that clause 11 of the NYPE Form required the plaintiff to make payment of hire that is indisputably due to the defendant free of any cross-claims or deductions from hire for any reason whatsoever. In other words, the alleged cross-claim does not extinguish the plaintiff’s liability to pay the PFA Sum.

[25] The defendant further argues that the plaintiff has brought OS 66/2022 in abuse of the court’s process. In line with the principles elucidated in AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) [2020] 1 SLR 1158 (“AnAn Group”) at [56], the defendant submits that it should not be restrained from presenting a winding-up application on the basis of a dispute or cross-claim raised by the plaintiff in abuse of the court’s process. The defendant points to inconsistent positions taken by the plaintiff in the London arbitration and the proceedings before the Singapore courts as to the effect of the PFA and the plaintiff’s liability to immediately pay the PFA Sum. The plaintiff acknowledged in the London arbitration that the PFA was immediately enforceable in a “pay now, argue later” fashion. In ADM 103/2021, which the plaintiff commenced to arrest the Vessel, the plaintiff demanded security of a sum that included the PFA Sum. The plaintiff’s basis for including the PFA Sum was that it had “incurred a liability to pay” that sum. However, the plaintiff subsequently refused to pay the PFA Sum, or provide security for or compound the sum. The defendant argues that, since the plaintiff relied on its liability to pay the PFA Sum to obtain security in the sum of US$11,269,629.34 in ADM 103/2021, it must not be allowed to now argue, in abuse of the court’s process, that there is a disputed debt or cross-claim in respect of the PFA Sum.

[26] Finally, the defendant also seeks to argue that the court should take into account the solvency of the plaintiff in determining whether to grant the injunction and that there are reasonable grounds on which to believe that the plaintiff is insolvent. To determine solvency, the defendant relies on the “cash flow test” endorsed in Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd) [2021] 2 SLR 478 at [56] and [65], which assesses whether the debtor’s current assets (ie, assets realisable within a 12-month timeframe) exceed its current liabilities (ie, debts which would fall due within a 12-month timeframe). According to the defendant’s expert, Mr Martin John Tupila (“Mr Tupila”), there are indications that the plaintiff was insolvent during FY 2020. On the assumption that the plaintiff’s financial performance in FY 2021 was similar to that in the preceding two years, Mr Tupila opined that is unlikely that the plaintiff is able to meet its current liabilities. The defendant also alleges that the plaintiff has been evasive about its financial position since it has only provided the 2020 Financial Statements and has never explicitly stated that it is currently solvent despite the defendant’s allegations. The defendant thus invites the court to draw “the necessary adverse inferences”.

[27] As an alternative argument, the defendant argues that, should the court allow the plaintiff’s application, the injunction should be granted only on the condition that the plaintiff furnishes security of a value equal to the PFA Sum, pending the outcome of the London arbitration.

[28] The Court of Appeal in Metalform Asia Pte Ltd v Holland Leedon Pte Ltd [2007] 2 SLR(R) 268 considered (at [62] and [82]) that, in the two following circumstances, the court may restrain the presentation of a winding-up application: (a) where the debtor-company disputes the creditor’s debt on bona fide and substantial grounds; and (b) where the debtor-company has a genuine cross-claim based on substantial grounds equal to or exceeding the creditor’s undisputed debt. A debtor-company relying on either ground to resist a winding-up application would have to demonstrate to the court that there is a triable issue as to the existence of the relevant ground it seeks to rely on: Pacific Recreation Pte Ltd v S Y Technology Inc and another appeal [2008] 2 SLR(R) 491 at [23] and [25]. However, the standard of review is different when the court is faced with either a disputed debt or a cross-claim that is subject to an arbitration agreement. In such a case, the prima facie standard of review is to be adopted: AnAn Group at [56]. This means that the court will ordinarily dismiss a winding-up application if the debtor-company is able to show, on a prima facie basis, that the disputed debt or cross-claim falls within the scope of a valid arbitration agreement between the parties (provided that the dispute is not raised by the debtor-company in abuse of the court’s process): AnAn Group at [110].

[29] Although AnAn Group itself concerned a debtor-company resisting a winding-up application, the principles in AnAn Group apply equally in a case such as the present, where the alleged debtor-company seeks to restrain a purported creditor from presenting a winding-up petition: BWG v BWF [2020] 1 SLR 1296 (“BWG v BWF”) at [128].

[30] In determining whether there is a disputed debt or cross-claim that is subject to a valid arbitration agreement between the parties on the prima facie standard, the court will not inquire into the merits of the defences raised by the debtor-company: AnAn Group at [82]. As explained by the Court of Appeal in AnAn Group (at [77]), parties to an arbitration agreement should not be allowed to bypass the arbitration agreement by presenting a winding-up application in an attempt to get the court to resolve their disputes. Party autonomy should be given effect to, and the parties’ agreed method of dispute resolution should be upheld. The court will not examine the merits of the debtor-company’s defences in place of the arbitral tribunal and in so doing undercut the parties’ pre-dispute bargain. However, in making a prima facie determination, the court is fully entitled to determine whether a dispute exists which falls within the scope of the arbitration agreement by construing the arbitration agreement to discover its full ambit and determining whether there has been a clear and unequivocal admission of liability: Merrill Lynch Pierce, Fenner & Smith Inc v Prem Ramchand Harjani and another [2009] 4 SLR(R) 16 at [19]–[20].

[31] If the plaintiff is able to show, on a prima facie standard, that there is a disputed debt or a cross-claim that is subject to an arbitration agreement, then an injunction restraining the commencement of winding-up proceedings should be granted: BWG v BWF at [128]. However, this is subject to the caveat stated above at [28] that the disputed debt or cross-claim was not raised in abuse of the court’s process.

[32] If the injunction is granted, it may also be appropriate for the injunction to be granted subject to certain conditions. In AnAn Group, the Court of Appeal stated (at [111] and [112]) that, where the creditor is able to demonstrate legitimate concerns about the solvency of the debtor, and no triable issue was raised by the debtor, the court could stay rather than dismiss the winding-up application. The creditor would then be given liberty to apply to the court to proceed with the winding-up if, for example, it could be shown that the debtor had no genuine desire to arbitrate the dispute, and that it was taking active steps to stifle the arbitration. Similarly, in BWF v BWG (at [131]), the Court of Appeal took the view that an injunction may be granted with liberty for parties to apply where there are legitimate concerns about the solvency of the debtor-company.

[33] In view of the contentions raised by the parties, four main issues arise for determination:

[34] The plaintiff argues that the PFA Sum is prima facie in dispute in view of its cross-claim that no hire is ultimately due under the terms of the Charterparty, and the appeal before the English courts against the PFA (as earlier mentioned at [21]–[22] above). On the other hand, the defendant argues that the PFA Sum is presently due regardless of the plaintiff’s cross-claim concerning the Vessel being off-hire and the pending appeal against the PFA, given the final and binding partial award by the tribunal.

[35] There can be no question that the dispute over whether hire must be paid first, even though the plaintiff may take the position that the Vessel was off-hire, is subject to the parties’ arbitration agreement. That dispute was referred to arbitration. The PFA issued by the tribunal has resolved that issue in favour of the defendant. The tribunal has determined that the plaintiff is required to pay the disputed amount of hire over to the defendant, but that the plaintiff can proceed with its cross-claim in the arbitration to make good, inter alia, its claim that the Vessel was off-hire at the material time, and thus the hire received by the defendant pursuant to the PFA must be repaid. Therefore, in so far as the contractual framework and arbitration process agreed between the parties is concerned, there is no doubt that the PFA Sum is presently payable to the defendant.

[36] However, it does not necessarily follow that there is no longer any dispute over the PFA Sum, such that the defendant is entitled to commence winding-up proceedings in a Singapore court. The defendant’s contractual right to payment of the PFA Sum is being disputed by the plaintiff through its appeal to the English courts. The plaintiff is entitled to pursue this avenue of appeal that is available under the law of the seat of the arbitration chosen by the parties, ie, English law, and in that limited sense, there is still a dispute that falls within the scope of the parties’ arbitration agreement. As Baker J held, it is “well arguable” that the tribunal had erred in law in deciding that the “no deductions” clause in the Charterparty (see [15]–[16] above) applied when the Vessel was off-hire. Put another way, the tribunal might well have been wrong in deciding that the plaintiff was required to pay the disputed hire to the defendant first, even though the plaintiff’s position was that the Vessel was off-hire at the material time. That question is presently before the English courts, and it is the English courts that will have the final say as to whether the PFA Sum is indeed due and payable. Given that, I am not prepared to accept that the PFA Sum is a debt that is indisputably due such that the defendant is entitled to proceed with a winding-up application under Singapore law on the basis of that debt.

[38] When there are pending setting aside proceedings in relation to an arbitral award, the decision to grant an adjournment of enforcement proceedings is a matter of discretion for the enforcing court: Man Diesel Turbo SE v IM Skaugen Marine Services Pte Ltd [2019] 4 SLR 537 at [46]. I agree with counsel for the defendant that there is a likelihood that the Singapore courts will not grant leave for enforcement of the PFA because it is presently the subject of an appeal before the English courts, in accordance with the law of the seat of the arbitration (see [15] above). In fact, it would be a most anomalous situation if the defendant can seek to wind the plaintiff up on the basis of the PFA Sum, when that sum presently is not capable of being the subject of enforcement proceedings under Singapore law (by reason of leave not being obtained under the IAA to enforce the PFA). In view of the foregoing, I find that, on a prima facie standard, the PFA Sum is still a disputed debt that falls within the scope of the parties’ arbitration agreement.

[39] The plaintiff also argues that the injunction should be granted in view of its cross-claim of US$9,809,562.18, which exceeds the PFA Sum. As earlier set out (at [21]), the plaintiff’s cross-claim is in respect of the following:

[40] In respect of [39(a)], the plaintiff is able to provide evidence of the sub-charterer’s claim against it in the form of a letter of demand from the sub-charterer. The plaintiff is also able to point to the clauses that the defendant is allegedly in breach of: clauses 8 and 11 of the NYPE Form and clause 32 of the Recap, which, according to the plaintiff, renders the defendant liable in respect of the sub-charterer’s claim against the plaintiff. With regard to [39(b)], the plaintiff has provided an invoice substantiating its claim of overpaid hire. For [39(c)], the plaintiff is able to provide an explanation as to the basis for its counterclaim. As earlier set out (at [10]–[11]), the plaintiff takes the view that the Vessel was off-hire and it should not be liable to pay the PFA Sum.

[41] The defendant argues that the plaintiff’s cross-claim is “frivolous and vexatious”, and that the plaintiff has raised the cross-claim in abuse of the court’s process. In this regard, the defendant raises three points:

[42] In respect of [41(a)], the defendant repeatedly emphasises the finality of the PFA and that the PFA Sum is presently owing regardless of any cross-claim. I have already dealt with whether the PFA Sum is an undisputed debt for the purposes of a winding-up in the Singapore courts (see [34]–[38] above). For the purposes of the analysis as to whether there is a cross-claim, the defendant ignores the fact that the plaintiff’s case is that it is ultimately not liable for any hire, even though it may have to pay it over to the defendant first given the PFA, because the Vessel was off-hire during the material time. In other words, the plaintiff has raised, on a prima facie standard, that it has a cross-claim that is subject to the parties’ arbitration agreement that will at least equal the amount in the PFA Sum.

[44] I do not agree that the plaintiff’s cross-claim can be described as being not genuine or abusive of the court’s processes. As emphasised by the Court of Appeal in AnAn Group (at [99]), the threshold for showing abusive conduct is “very high”. The plaintiff had arrested the defendant’s Vessel in Singapore waters to obtain security for its cross-claim in the London arbitration. The defendant’s complaints are effectively that the plaintiff had overstated its claim amount in the admiralty proceedings it commenced. This is because its claim amount included the PFA Sum, which the plaintiff had hitherto not paid to the defendant. Nonetheless, the defendant put up security for the release of its arrested vessel in the amount of US$11,269,629.34. Also, I noted counsel’s confirmation that the defendant, up to the date of the hearing before me, had not applied to set aside any part of the plaintiff’s claim. I am not convinced that the plaintiff can be described as acting in abuse of the court’s process. What the Court of Appeal had in mind when it talked about the abusive conduct exception in AnAn Group is for instance, where a party has admitted to the creditor’s claim as regards both liability and quantum but seeks a stay for no reason other than its alleged inability to pay (AnAn Group at [99(a)]). Here, even if one is to accept that the plaintiff has overstated the amount of its cross-claim, and the PFA Sum amount should be excluded from consideration because the plaintiff has not paid that sum over to the defendant, the remaining portion of the plaintiff’s cross-claim still exceeds the PFA Sum claimed by the defendant as the basis for winding-up.

[46] In view of the above, I find that, on a prima facie standard, there is a cross-claim subject to the arbitration agreement that exceeds the PFA Sum. The defendant obviously cannot deny that the cross-claim falls within the scope of the arbitration agreement. I should add that the defendant is essentially trying to get this court to determine whether there is any merit to the plaintiff’s cross-claim in the arbitration. That is precisely what this court cannot do because it would then be usurping the role of the arbitral tribunal and undermining the agreement between the parties that their disputes are to be decided in arbitration, not in the courts. Any investigation into the merits of the plaintiff’s cross-claim is entirely inconsistent with the premise for adopting the prima facie standard of review. The Court of Appeal in AnAn Group (at [75]) rejected the triable issue standard in favour of the prima facie standard because the former, when applied in the context of disputes subject to arbitration, “offends against the principle of party autonomy”. As the Court of Appeal went on to explain (at [77]–[78]):

[47] Given my finding that there is, on a prima facie basis, a cross-claim subject to the arbitration agreement that exceeds the PFA Sum, I find that an injunction restraining the defendant from commencing winding-up proceedings should be granted.

[51] In respect of [50(a)], I have already found that the PFA Sum is not an undisputed debt for the purposes of winding-up proceedings in Singapore (see [38] above).

[52] With regard to [50(b)], counsel for the defendant acknowledged at the hearing before me that the defendant could apply to moderate the quantum of security in ADM 103/2021 or apply to set aside the arrest of the Vessel. In my view, either of these possible courses of action might provide a more appropriate means of addressing the defendant’s concerns in respect of the quantum of security it had to put up to secure the release of the Vessel, as opposed to winding-up the plaintiff.

[53] As for [50(c)], the defendant alleges that the plaintiff was balance sheet insolvent since FY 2020. Although the 2020 Financial Statements show a net asset position of US$460,677, the defendant relies primarily on the significant uncollected receivables (totalling US$11,954,052) in the plaintiff’s balance sheet to argue that the plaintiff is insolvent. The defendant’s expert, Mr Tupila, points out that the plaintiff’s own auditor had issued a qualified opinion because it was unable to conclude on the recoverability of the plaintiff’s receivables. The plaintiff’s auditor flagged that the plaintiff had past due receivables that were long outstanding. Although the plaintiff’s management stated that it was confident of recovery, and the plaintiff has initiated legal action to recover receivables that have fallen due for more than a year, the auditor took the position that it was unable to come to a conclusion as to the recoverability in the absence of satisfactory audit evidence. Thus, Mr Tupila’s position is, in essence, that there is some doubt about the net asset position in so far as it includes the receivables.

[54] Mr Tupila opined that, based on the 2020 Financial Statements, the plaintiff was not in a position to settle its current liabilities without converting substantially all its trade receivables into cash. On the assumption that the plaintiff’s financial performance in FY 2021 was consistent with that in FY 2020, the plaintiff would have had to convert the overwhelming majority of its trade receivables into cash to meet its current liabilities at the end of FY 2020. Mr Tupila therefore concluded in his report dated 29 March 2022 that the information in the 2020 Financial Statements was “insufficient to demonstrate that [the plaintiff] is currently solvent on a cash flow basis” [emphasis in original].

[55] However, according to the plaintiff’s expert, Mr Thio Khiaw Ping Kelvin (“Mr Thio”) in his report dated 26 April 2022, the plaintiff’s net current asset position should be adjusted to US$6,220,493 as at 31 December 2020. Mr Thio’s calculations were as follows:

[56] In essence, Mr Thio took into consideration that, even if the long outstanding receivables cannot be collected (as argued by Mr Tupila), the net current asset position should also take into account the commercial reality that certain liabilities to related parties and the plaintiff’s director would not fall due to be payable. In short, one would not expect these related parties and the plaintiff’s director to commence any recovery actions against the plaintiff. Mr Thio thus concluded that, based on the adjusted net current asset position, assuming the plaintiff’s financial performance in FY 2021 was consistent with that in FY 2020, the plaintiff would still be solvent even if the issues with recoverability of trade receivables persisted. Mr Tupila, in a further report dated 17 May 2022, disagreed with Mr Thio’s conclusions. Amongst other things, Mr Tupila disagreed with Mr Thio’s treatment of debts owed to related parties and the plaintiff’s director.

[57] In my judgment, there is insufficient evidence for the court to find that the plaintiff is insolvent. As it stands, the 2020 Financial Statements record a net asset positive position. The evidence as to the trade receivables is equivocal. It would not be appropriate for the court to infer that the receivables cannot be collected and, on that basis, conclude that the plaintiff is insolvent. It is also speculative for the court to assume that the plaintiff’s financial performance after FY 2020 would remain the same. Further, counsel for the defendant accepted that the defendant is unable to point to any other creditors pursuing claims or winding-up proceedings against the plaintiff. In short, there is no real evidence of the plaintiff not being able to meet its current liabilities as they fall due. The circumstances here are similar to those in Diamond Glass Enterprise (outlined at [49] above) in so far as there is insufficient evidence to show that the debtor is at a real risk of insolvency.

[61] For the above reasons, I will grant the injunction sought in the Originating Summons, save that it is to last only until the conclusion of the London arbitration. I also grant parties liberty to apply.