## Facts

- HKL Group Co. Ltd. (HKL) sold sand to Rizq International Holdings Pte Ltd (Rizq) under an agreement dated September 28, 2011, for shipments from Cambodia to Singapore for resale to a third-party buyer.
- The payment arrangement was “back-to-back”: Rizq was to pay HKL immediately upon receiving payment from the buyer.
- In a joint letter dated May 15, 2012, the parties specified that Rizq would pay HKL within 24 hours of receiving the buyer’s payment, and HKL arranged to receive notice of those payments.
- HKL issued seven invoices for shipments in 2012; HKL deferred payment on the first four invoices subject to conditions linked to Rizq’s resale arrangement.
- The buyer paid Rizq, but Rizq did not pay HKL as required; HKL sued in the Singapore High Court for the unpaid invoice amounts.
- The contract contained an arbitration clause referring disputes to an “Arbitration Committee at Singapore under the rules of the International Chamber of Commerce,” although no such “Arbitration Committee” existed in Singapore.
- Rizq applied for a mandatory stay of the court action in favor of arbitration under § 6(2) of the International Arbitration Act (IAA); HKL sought default judgment based on Rizq’s failure to file a defense.

## Issues

1. Whether the arbitration clause was “null and void, inoperative or incapable of being performed” under § 6(2) IAA because it named a non-existent administering body while invoking ICC Rules.
2. Whether there was a “dispute” within the scope of the arbitration clause and § 6(2) IAA where HKL claimed nonpayment was undisputed and defenses were contrived.
3. Whether HKL could obtain default judgment notwithstanding a pending application for a mandatory stay in favor of arbitration.

## Decision

- The court held the arbitration clause, though defective in its institutional reference, was not null and void, inoperative, or incapable of being performed.
- The court granted a stay of the court proceedings under § 6(2) IAA in favor of arbitration seated in Singapore, allowing the parties to proceed with arbitration under workable administrative arrangements.
- The court declined to enter default judgment for HKL because the mandatory stay regime applied once a valid arbitration agreement and an arguable dispute within its scope were shown.

## Legal Principles

- Courts should, where possible, construe an arbitration agreement to give effect to the parties’ objectively manifested intention to arbitrate, even if institutional or procedural details are poorly drafted.
- A defective designation of an administering institution does not necessarily invalidate an arbitration agreement if the essential consensus to arbitrate disputes arising out of the contract is clear.
- For a stay under § 6(2) IAA, the threshold for a “dispute” is low; the court generally does not decide the merits and will refer even weakly contested liability or quantum issues to arbitration.
- If § 6(2) IAA applies, the stay is mandatory unless the court is satisfied the arbitration agreement is null and void, inoperative, or incapable of being performed, and this framework can displace default-judgment efforts in the court action.

## Conclusion

The court enforced a poorly drafted ICC-rules arbitration clause by interpreting it as a workable agreement to arbitrate in Singapore and stayed the court action under § 6(2) IAA, holding that a minimally arguable contest over payment sufficed to constitute a “dispute” for referral to arbitration.


HKL Grp. Co. Ltd. v. Rizq Int’l Holdings Pte Ltd, [2013] SGHCR 5 (Sing. H.C. Feb. 19, 2013)