KUFPEC Singapore Holding Ltd v Sanderson Capital Resources Ltd & Anor

An interim injunction requires a serious issue to be tried. A contractual stop-notice mechanism cannot be expanded beyond the clear meaning of the defined claim triggering it by reliance on a wider factual matrix or related contractual schedules. Where an escrow agreement makes automatic payments subject to an order, judgment, award, decision or decree determining entitlement, that determination overrides the automatic payment schedule. A partial arbitral award may constitute a final adjudication for that purpose even though further issues remain for a later phase of the arbitration.

The claimant sought an interim injunction preventing Citibank from releasing approximately US$12 million held in escrow to Sanderson Capital Resources Ltd. The escrow arrangements arose from two share sale and purchase agreements concerning indirect interests in Indonesian oil and gas assets.

The claimant relied on a December 2016 stop notice based on damages claims arising from an alleged breach under SPA1. It argued that those claims were Relevant Claims under the escrow agreement, that the payment provisions suspended automatic release, and that the arbitration had not produced a final adjudication because a damages phase remained outstanding. The issue was whether there was a serious issue to be tried warranting interim relief.

1. Application dismissed. The claimant failed to establish a serious issue to be tried, so the court did not need to determine the balance of convenience or adequacy of damages.
2. The escrow agreement made a Relevant Claim a precondition to a stop notice. The expression had to be understood by reference to the Relevant Claim defined in the applicable underlying agreement. The claimant’s damages claim under SPA1 was not a Relevant Claim within SPA1 and could not trigger the stop-notice mechanism. Schedule 4, although part of the escrow agreement, was expressly for Citibank’s reference only and could not transform the clear language of clause 5.1(c)(ii).
3. The contractual structure gave priority to clause 5.1(a) and (b) over the automatic payment schedule in clause 5.1(c). Clause 5.1(b) required payment pursuant to an order, judgment, award, decision or decree determining entitlement to the escrow funds. It was not a proviso or exception to clause 5.1(c); rather, clause 5.1(c) was subject to it.
4. The arbitral tribunal’s March 2017 partial award was a final adjudication for the purposes of clause 5.1(b). It ordered withdrawal of the earlier stop notice and authorised release of the escrow balance. The existence of the later stop notice, the outstanding damages phase, and further procedural orders did not deprive that award of its final and determinative character.
5. Questions concerning the effect of clause 5.9 of SPA1 on the damages phase, and the calculation of any retained amount, were matters for the arbitral tribunal.