A winding up application is meant to be used against a company that genuinely cannot pay its debts, not as a pressure tactic to force payment of a debt that is honestly disputed. Singapore’s courts have developed a specific standard, commonly called the AnAn standard, for deciding when a disputed debt should stop a winding up application in its tracks, particularly where the dispute is covered by an arbitration agreement. A May 2026 Court of Appeal decision has now clarified exactly how far a narrow exception to that standard, for disputes raised in “abuse of process”, actually extends.
This guide explains what the AnAn standard is, the statutory basis for winding up applications and standing as a creditor, and what the 2026 Court of Appeal decision means for any Singapore company facing a winding up application over a debt it disputes.
1. What This Application Is
When a creditor believes a Singapore company cannot pay its debts, it can apply to the General Division of the High Court to have the company wound up. But a company facing such an application is not without defences. Where the company genuinely disputes the debt on which the application is founded, and particularly where that dispute is subject to a valid arbitration agreement, the company can resist the winding up application on the basis that the applicant has not established the necessary standing as a “creditor” in the first place.
This is not a technical loophole. It reflects a deliberate policy choice: parties who agreed to resolve their disputes by arbitration should not be able to sidestep that agreement by dressing a disputed claim up as a winding up application, which carries reputational and commercial consequences a company should not face until the underlying debt is actually established.
2. Legal Basis: The Insolvency, Restructuring and Dissolution Act
- Section 125(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) allows the court to wind up a company that is unable to pay its debts (the “Insolvency Ground”).
- Section 125(1)(i) IRDA allows the court to wind up a company where it is just and equitable to do so (the “Just and Equitable Ground”).
- Section 124(1) IRDA sets out who may apply for a winding up order, including the company itself, a creditor, a contributory, or the Official Receiver. Where the debt underlying the application is disputed, the applicant’s standing as a “creditor” is precisely what is in question.
- Section 130(1) IRDA allows the court to make orders as to security, including permitting a company to pay a disputed sum into court pending resolution of the underlying dispute, rather than being wound up outright.
The governing case law is the Court of Appeal’s decision in AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Co) [2020] 1 SLR 1158, later applied in Founder Group (Hong Kong) Ltd v Singapore JHC Co Pte Ltd [2023] 2 SLR 554. Together these establish that where a debtor disputes a debt that is subject to a valid arbitration agreement, the court will generally not conduct its own merits review of the dispute (unlike the “triable issue” standard that otherwise applies to disputed debts). Instead, the arbitration agreement generally precludes the applicant from establishing its standing as a creditor at all, unless the debtor’s dispute is itself an abuse of the court’s process.
3. Who Can Raise This Defence
Any Singapore company facing a winding up application can raise this defence where:
- The applicant’s claim to be a creditor rests on a debt the company genuinely disputes
- The contract giving rise to the alleged debt contains a valid arbitration agreement covering that dispute
- The company has not, through its own conduct, disqualified itself from relying on the dispute by acting in abuse of the court’s process
The 2026 decision in Singapore Commodities Group Co, Pte Ltd v Founder Group (Hong Kong) Ltd [2026] SGCA 24 is a useful illustration. The respondent liquidator sought to wind up the appellant over an alleged debt of approximately US$14.1 million arising from a copper cathode sale contract. The appellant disputed the debt and had commenced arbitration under the contract’s CIETAC arbitration clause. Although the arbitral tribunal ultimately reached a stalemate, neither proving nor disproving the debt, the Court of Appeal held that the general AnAn rule still applied: because the dispute over the debt fell within a valid arbitration agreement and the tribunal had not found the debt to be owed, the applicant could not establish standing as a creditor, and the winding up application had to be dismissed.
4. Step-by-Step: How the Defence Is Run
- Identify the arbitration agreement. Confirm the contract underlying the alleged debt contains a valid, applicable arbitration clause covering the dispute over the debt.
- Formally dispute the debt. Respond to any statutory demand or winding up application setting out, on a genuine and good faith basis, why the debt is not owed or not owed in the amount claimed.
- Commence or point to the arbitration. Where arbitration has not yet begun, commence it promptly, since a company that never actually pursues the arbitration it relies on may weaken its own position.
- Resist the winding up application. Argue that the applicant lacks standing as a creditor because the dispute is subject to arbitration and there has been no abuse of process.
- Address any abuse of process allegation head-on. If the applicant argues the company’s dispute is an abuse of process (for example, because of prior admissions of the debt), be prepared to explain those prior statements rather than simply resiling from them without justification.
- Consider offering security instead of an outright dismissal. Under Section 130(1) IRDA, paying a disputed sum into court can resolve the immediate winding up threat while the underlying dispute is arbitrated.
- Let the arbitration run its course. The winding up application is typically stayed pending the arbitration’s outcome, after which the court applies the AnAn framework in light of what the tribunal decided.
5. Documents Typically Required
| Document | Purpose |
|---|---|
| The contract containing the arbitration agreement | Establishes that the dispute over the debt falls within a valid arbitration clause |
| The statutory demand and/or winding up application | Sets out the debt as alleged by the applicant |
| Affidavit setting out the grounds of dispute | Explains, in good faith, why the debt is not owed or is disputed as to quantum |
| Evidence of any prior admissions or communications about the debt | Relevant to whether the dispute could be characterised as an abuse of process |
| Notice of arbitration or request for arbitration | Demonstrates the dispute is genuinely being pursued through the agreed forum |
| Any arbitral award or tribunal ruling | Once available, this shapes how the court will apply the AnAn framework to the remaining winding up application |
6. Timeline and Costs
| Stage | Typical Timeframe |
|---|---|
| Responding to a statutory demand | 21 days from service, if the company intends to apply to set it aside |
| Initial hearing of the winding up application | Several weeks to a few months after filing, depending on the court’s list |
| Arbitration of the underlying debt dispute | Can take many months to over a year, depending on the institution, complexity and whether either party appeals within the arbitral process itself |
| Court’s application of the AnAn framework after arbitration | A further hearing is usually needed once the arbitral outcome is known, as illustrated by the multiple rounds of hearings in the Singapore Commodities Group litigation |
| Any appeal to the Court of Appeal | Typically a further several months to over a year |
| Cost Component | Typical Range |
|---|---|
| Setting aside a statutory demand or resisting a winding up application | Legal fees vary widely by complexity, but disputes of this kind, often running through multiple hearings and appeals, can involve substantial legal costs over their lifetime |
| Arbitration costs | Institutional fees, arbitrator fees and legal costs, which scale with the value and complexity of the dispute |
| Security payment into court (if ordered) | Equivalent to the disputed sum, tying up that amount of the company’s cash until the dispute resolves |
| Costs orders | The losing party on each application or appeal is typically ordered to pay a contribution to the other side’s costs |
7. What Happens After the Court’s Decision
If the company succeeds in showing the applicant lacks standing because the debt is genuinely disputed and covered by an arbitration agreement, the winding up application is dismissed, and any sum paid into court as security is typically returned to the company, as happened in the 2026 Court of Appeal decision. The underlying dispute over whether the debt is actually owed remains to be resolved in arbitration (or, if the arbitration has already concluded without a clear finding, the parties may be left to pursue the debt claim through a fresh forum). If, instead, the court finds the company’s dispute was raised in abuse of process, the court can proceed to decide the merits of the debt dispute itself and, if satisfied the debt is owed and the company cannot pay it, make a winding up order.
8. Frequently Asked Questions
Does having an arbitration clause automatically stop any winding up application?
No. The arbitration agreement only matters where the debt itself is genuinely disputed and that dispute falls within the scope of the clause. A company that admits the debt is owed cannot use an arbitration clause to avoid a winding up application over an undisputed sum.
What counts as “abuse of process” when disputing a debt?
The Court of Appeal has been cautious about expanding this exception. Simply changing position from an earlier statement is not automatically abuse of process; the court looks at the full context, including whether the earlier statement was truly an unequivocal admission and whether there is a legitimate explanation for the change in position.
Can the company be wound up while the arbitration is ongoing?
Generally the winding up application is stayed pending the arbitration’s outcome, rather than being dismissed outright or allowed to proceed in parallel, since the point of the AnAn framework is to let the agreed dispute resolution forum decide the debt first.
What if the arbitral tribunal reaches an inconclusive result, as happened in the 2026 case?
The Court of Appeal confirmed that an inconclusive arbitral outcome, where the tribunal neither proves nor disproves the debt, still generally means the applicant has not established the debt is owed, so it cannot establish standing as a creditor for a winding up application founded on that debt.
Should a company still pay a disputed sum into court even if it plans to fight the winding up application?
This is a strategic decision. Paying a sum into court under Section 130(1) IRDA can remove the immediate winding up pressure and demonstrate good faith, but the terms of any payment-in order matter enormously, as the multiple rounds of litigation in the Singapore Commodities Group case show; get proper legal advice on the wording before agreeing to pay in.
Need Help With This Matter?
If your company is facing this situation, Raffles Corporate Services can assist with the groundwork: ACRA filings, compliance documentation, and coordinating with experienced Singapore law firms. For matters requiring court proceedings, we work with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice.
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This article is for general information only and does not constitute legal advice. For advice specific to your situation, please consult a qualified Singapore Advocate and Solicitor.
Related Reading
Companies navigating this issue should also read our guides on setting aside a statutory demand, restraining the presentation of a winding up petition as an abuse of process, and validation orders under Section 130 IRDA for keeping payments running during a winding up petition. If your dispute involves an arbitration clause more generally, see our guide to emergency arbitrator applications for urgent interim relief options.
For the statutory text, see the Insolvency, Restructuring and Dissolution Act 2018 on Singapore Statutes Online, and for the Court of Appeal’s judgment, see the Singapore Courts website.
The Editorial Team, Raffles Corporate Services