Partner Katie Chung and Special Counsel Lukas Lim contributed a case report, where in Singapore Commodities Group Co Pte Ltd v Founder Group (Hong Kong) Ltd (in liquidation) [2026] SGCA 24, the Singapore Court of Appeal dismissed a winding-up application over a disputed debt within the scope of an arbitration agreement, reaffirming the AnAn v VTB Bank [2020] 1 SLR 1158 and Founder Group v Singapore JHC Co Pte Ltd [2023] 2 SLR 554 line of authorities. The court also ordered indemnity costs against the unsuccessful applicant. The decision provides important guidance for creditors and debtors in commodities and cross-border insolvency disputes.

Reproduced from Practical Law with the permission of the publishers.

The Singapore Court of Appeal (CA) has dismissed a winding-up application on a disputed debt within the scope of the arbitration agreement in the parties' contract, said to be evidenced by audit confirmation letters (ACL). The contract, containing a CIETAC arbitration clause, was governed by PRC law. The appellant commenced CIETAC arbitration seeking a declaration that no debt was owed. The respondent filed a winding-up application against the Singaporean appellant, which was stayed pending the outcome of the arbitration, after the appellant paid security into court.

The tribunal refused the declaration but made no express finding that the debt existed. The respondent then applied for payment of the security, or alternatively that the appellant be wound up. The Singapore High Court ordered payment, but the CA reversed this, holding that the award had not established the debt. The CA reinstated the winding-up application and remitted it to the High Court.

The High Court found that the appellant had admitted its debt under the ACL, which meant its dispute of the debt was an abuse of process, and granted a winding-up order.

On appeal, the CA held:

• Under AnAn v VTB Bank [2020] 1 SLR 1158 and Founder Group v Singapore JHC Co Pte Ltd [2023] 2 SLR 554, where a debt falls prima facie within a valid arbitration agreement, the applicant has no standing as a creditor until the dispute is resolved in arbitration, subject to the abuse of process safeguard.
• The Privy Council's reasoning in Sian Participation Corp v Halimeda International Ltd [2025] AC 1321, that such a dispute is not caught by the arbitration agreement, and the court may decide if the debt is disputed on genuine and substantial grounds, is not reconcilable with AnAn.
• The abuse of process inquiry is a two-stage test: a clear and unequivocal admission of liability and quantum, and resiling without a clear and convincing reason. The ACL were not admissions, as their effect fell to be determined under PRC law and the tribunal had found they did not evidence the debt. Besides, the equivocal award gave the appellant a clear reason to maintain its dispute.

The court ordered indemnity costs against the unsuccessful applicant.

The decision reinforces the strict separation between winding-up proceedings and arbitral fora in Singapore and signals the court's willingness to award indemnity costs where a winding-up application is pursued in disregard of an unresolved arbitral dispute.

Case: Singapore Commodities Group Co Pte Ltd v Founder Group (Hong Kong) Ltd (in liquidation) [2026] SGCA 24 (13 February 2026) (Chong JCA, Hock JCA and Ramesh JAD).