SWIFT(LY) Resolving Banking Disputes

It is a well-known maxim that “time is money”, and this is especially apt when you’re faced with a banking or financial dispute.  

Banking-related legal disputes can involve complex technicalities and issues which require deep knowledge and expertise, and careful preparation and execution.  

To navigate the intricate nature of these disputes, you need good counsel and a strategy designed to put your best case forward (and fast). The sooner you engage an experienced legal team, the more time there is to prepare a compelling case on your behalf and consider and advise on related applications. This article will guide you through various legal mechanisms that we can employ as counsel to expedite the resolution of your banking dispute. 

1. If your dispute is being arbitrated before the Singapore International Arbitration Centre (“SIAC”)

  • Arbitration-Mediation-Arbitration (“Arb-Med-Arb”) Hybrid Protocol 

The Arb-Med-Arb protocol is an innovation by the SIAC and the Singapore International Mediation Centre (“SIMC”) that allows parties to submit the dispute to mediation shortly after arbitration has commenced. Mediation is generally cheaper and faster than protracting a matter through an entire trial. 

Since the mediator is not one of the arbitrators appointed in the case, even if mediation is unsuccessful, parties can continue the arbitration process. The opportunity to mediate while arbitration proceedings are ongoing increases the likelihood of settlement. Further, since mediation occurs while the arbitration is still in its infancy, there is flexibility to facilitate a fair settlement.  

A successful mediation can also lead to a result that satisfies both parties and is party-led, as opposed to one that is imposed upon them by a third party. The benefit of this arrangement is that a recorded settlement agreement reached after parties have mediated can then be recorded as an arbitral award, which enjoys close to universal enforceability under the New York Convention on the Recognition and Enforcement of Arbitral Awards.  This is especially useful when dealing with cross-border assets, individuals, or institutions. 

  • The Insolvency Angle
    • Usually: Non-Payment of Statutory Demand à Winding Up in Court 

A creditor may apply to wind up a company which is unable to pay a debt indebted to it in a sum exceeding S$15,000 after serving the debtor company with a statutory demand. The debtor has the right to apply to set aside the disputed debt in court.  

However, the situation differs if the disputed debt arises from a contract containing an arbitration clause, as explained next. 

    • Exception: Arbitration Angle à Dispute Winds Up before Tribunal 

Under Singapore law, the apex court has decided that an insolvency court cannot determine the substantive merits of disputed debts arising from contracts containing valid arbitration agreements (AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) [2020] 1 SLR (“VTB”)). Therefore, the validity of the underlying debt is a question for a duly constituted tribunal in arbitration to determine, where there is a valid arbitration agreement.  

Our own Managing Director, Shobna Chandran acted for the Respondent, Russian State-owned VTB Bank in VTB, before the Singapore Court of Appeal in 2020, and again in 2021.  

In the 2021 Court of Appeal case, the opposing party had applied for VTB to bear the remuneration and expenses of the liquidators and liquidator’s solicitors. Managing Director Shobna Chandran was part of the legal team who successfully resisted the application on VTB’s behalf both at the High Court and before the Court of Appeal. 

Where your case involves a disputed debt or brings an arbitration angle to your insolvency dispute, it is important for counsel to be well-versed in both arbitration law and practice and the intricacies of insolvency law.  Our expertise combined with the potential to utilise the mediation at an early stage will help you to bring an end to your case earlier. 

2. If your dispute is before the Singapore International Commercial Court (“SICC”): Litigation-Mediation-Litigation Hybrid Protocol

The SICC and the SIMC have similarly established a Litigation-Mediation-Litigation protocol (“LML Protocol”), where litigation proceedings with respect to international commercial disputes underway before the SICC can be resolved potentially via amicable resolution (i.e., mediation). 

The LML Protocol provides for a case management stay of SICC proceedings for up to 8 weeks once mediation has commenced. The LML Protocol can be agreed to separately between parties even after the dispute has arisen, even if absent from their initial, often standard form, financial contracts. 

Even parties in an international banking dispute no longer need to feel hamstrung by physical and jurisdictional distance in their mediation and settlement efforts, as a mediated settlement agreement can now be recorded as an enforceable Court order, pursuant to the Singapore Convention on Mediation, in 56 countries, including the United States, Singapore, and Japan, among others.  

3. If your dispute is before the Singapore High Court or Court of Appeal 

We have previously written on appellate advocacy and the need for speed when you are seeking to appeal a judgment to either the High Court, Appellate Division, or the Court of Appeal. Please read our article on our ability to assist you in appellate matters as counsel here. 

If you are at or entering the trial phase of your matter, the following mechanisms can assist in either expediting resolution of the dispute or narrowing the issues in dispute to limit costs and time incurred in court:    

  • Summary Judgment 

As soon as all documents and arguments in respect of each party’s legal case have been tendered in court, a party with a strong view to the strength of its legal case can move to apply for a summary judgment. Summary judgment application can be taken out on the merits of an entire case, or on discrete individual issues. 

A summary judgment is likely granted when a party can convince or satisfy the Court that there is no reason for its case to undergo the entire litigation process when it can be decided on the face of documentary evidence and sworn affidavits alone.  

Summary judgment is useful in the event the pleadings reveal that some of the contractual clauses that form the subject-matter of the dispute or other legal issues claimed by the other party are straightforward.  This confines the issues that have to proceed to trial and limits its scope. It can also provide a necessary morale boost if some of the issues are decided in your favour and early right before a contentious trial or hearing. One issue that can be determined by way of a summary judgment is the scope and applicability of non-reliance and exclusion clauses which are commonly found in banking / mis-selling disputes (see the Court of Appeal case in Orient Centre Investments Ltd v Societe Generale [2007] 3 SLR(R) 566). 

    • If you are faced with disputes such as the ones referred to above, obtaining the advice of prudent legal counsel with respect to seeking to apply for a summary judgment (or even striking out the case) will go a long way to exclude such issues from being ventilated at an entire trial.
  • Summary Determination 

In a similar fashion, the summary determination mechanism can be employed where there is a question of law that can be decided by the Court without needing a full trial, or the court needs to decide how to construe or interpret a document. A question of law is one that involves no factual disputes, i.e., where the Court simply needs to decide a legal question with no analysis of the facts. 

A determination by the court may be made if it would save time and costs, even if it does not dispose of the entire dispute (Ong & Co Pte Ltd v Ngu Tieng Ung [1999] 4 SLR 379 at [8]). Indeed, the courts have reiterated that the underlying purpose of this mechanism is to save time and costs for the parties (TMT Asia Ltd v BHP Billiton Marketing AG (Singapore Branch) and another [2015] 2 SLR 540 at [32];ANB v ANF [2011] 2 SLR 1 at [61]). 

Conclusion

Choosing the right advocate to evaluate and execute the right strategy is pivotal to your success. Our Managing Director, Shobna Chandran, has extensive experience in banking and finance disputes.   

Seasoned barristers like Shobna Chandran have a deep understanding of the trial and appellate process and expertise in navigating the nuances of banking disputes.  

Let us help you navigate the disputes process with confidence and determination, galvanising our expertise and knowledge to ensure time and cost efficiency for your benefit. Your success and satisfaction are our top priority, as we are committed to delivering exceptional results for our clients.  

For more information, kindly contact Shobna Chandran. 

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