SINGAPORE Trends and Developments Contributed by: KOH Swee Yen, SC, Wendy LIN, TIONG Teck Wee and Monica CHONG Wan Yee, WongPartnership LLP
That interim relief is being sought against third parties in aid of a Singapore-seated arbitration is not sufficient in itself to demonstrate that Singapore is the appropriate forum – Alphard Maritime Ltd v Samson Maritime Ltd and Others [2025] SGHC 154 (“Alphard Maritime”) The General Division of the High Court set aside an ex parte Mareva injunction granted against the contract- ing defendants and a prohibitory injunction granted against third-party creditors and a subsequent pur- chaser. The dispute arose from an alleged settlement agreement for the sale of vessels and shares belonging to the first and second defendants to the claimants. The alleged settlement agreement also provided that any disputes would be resolved by way of an SCMA arbitration. However, before receiving any payment from the claimants, the first and second defendants contracted to sell part of the assets to a third party, the third defendant, at a higher price. The proceeds were used to reduce the first and second defendants’ pre-existing liabilities owed to lenders and an award creditor. The claimants commenced an SCMA arbitration against the first and second defendants who were par- ties to the arbitration agreement. Before the Singapore courts, the claimants obtained an ex parte Mareva injunction against the first and second defendants and a prohibitory injunction to restrain the third defendant from taking any steps to deal with the first and sec- ond defendants’ assets, and also to restrain third-par- ty creditors of the first and second defendants from pursuing them for repayment of the debts, pursuant to Section 12A of the IAA. The first to third defend- ants successfully applied to set aside the injunctions against them. In coming to its decision, the Court first found that the Mareva injunction could not stand as there was no real risk of dissipation of assets by the first and second defendants. The Court held that dealings for legitimate commercial reasons – such as sales at or above value and payments to genuine creditors – will ordinarily not be “unjustified” and therefore are not dissipative. The absence of evidence of dishonesty reinforced this conclusion; the transactions were disclosed in public corporate filings and there was no suggestion of con- cealment, double payment or undervalue transfers.
What is worth highlighting is the Court’s decision in setting aside the prohibitory injunction against the third defendant. In this regard, the Court held that an interim injunction against a non-party under Section 12A of the IAA requires in personam jurisdiction and for Singapore to be the appropriate court to hear the matter. The latter requires more than just the arbitra- tion being seated in Singapore. Possible bases for finding that Singapore is the appropriate court include (a) where the non-party is a party to the arbitration agreement even though not the arbitration itself, (b) where the non-party holds or controls assets within the jurisdiction for which there is a good arguable case that those assets belong beneficially to a party to the arbitration, or (c) where the non-party is a cor- porate entity within the jurisdiction that is owned by a party to the arbitration such that dissipation of that entity’s assets would in effect be dissipation of value otherwise available for the satisfaction of any eventual award against the party to the arbitration. On the facts, the Court found that the injunction sought against the third defendant involved none of these situations, and Singapore was not the appropriate court vis-à-vis the third defendant. The test for an injunction pending appeal (ie, an Erinford injunction) should include a balancing exercise of the prejudice caused to parties - DJY v DJZ and another [2025] SGHC 59 The General Division of the High Court clarified the law on Erinford injunctions. Traditionally, courts asked whether there was a good arguable appeal and wheth- er refusal of an injunction would render the appeal nugatory. This decision refined that approach. A stay of execution pending appeal and an injunc- tion pending appeal are two sides of the same coin. While the circumstances may vary, generally, a stay of execution pending appeal applies where a defendant seeks to restrain a successful claimant from enjoying the fruits of its litigation pending an appeal, and an Erinford injunction applies where a claimant seeks to do the same to a successful defendant. Hence, the same principles applied to both. It is well established that the test for an Erinford injunc- tion concerns two primary factors: first, whether there is a likelihood that the appeal will succeed, and sec-
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