Green Hospital Supply, Inc v Yi [2025] VSC 250

The stay be terminated upon the application made by the plaintiff in the event that the defendant does not do all things necessary to be done on her part to have the matters the subject of the proceeding referred to and determined in accordance with the arbitration agreement between the parties with reasonable expedition.

3 By summons filed on 16 April 2025, the plaintiff seeks orders lifting the stay and establishing a timetable for the further conduct of the proceeding.

4 The plaintiff contends that the condition for lifting the stay has been satisfied, as the defendant has failed to do all things necessary to progress the arbitration with reasonable expedition.

5 The plaintiff commenced this proceeding seeking to recover USD12,510,000 allegedly owed by the defendant pursuant to the terms of the SPA.

6 On 23 October 2024, the plaintiff obtained a freezing order and other ancillary orders.

7 Clause 9.13 of the SPA contains the following provisions pertaining to arbitration.

9.13. Arbitration

9.13.1. Arbitration Procedure

Any dispute arising out of or in connection with this contract, including any question regarding this existence, validity or termination, shall be referred to and finally resolved by arbitration administered by the Singapore International Arbitration Centre ("SIAC") in accordance with the Arbitration Rules of SIAC for the time being in force, which rules are deemed to be incorporated by reference in this section.

The seat of the arbitration shall be in Singapore.

The Tribunal shall consist of 1 (one) arbitrator.

The language of the arbitration shall be English.

8 On 6 November 2024, by consent, the proceeding was stayed and referred to arbitration, subject to the condition set out above.[1]

9 On 26 November 2024, the plaintiff filed a Notice of Arbitration with the Singapore International Arbitration Centre ('SIAC'). The notice set out that, pursuant to sch 4.2, item 3 of the SPA, the defendant was required to pay USD6,300,000 by 30 April 2024 and USD6,210,000 by 31 May 2024, but had failed to do so.

10 On 24 December 2024, the plaintiff paid its share of the arbitration costs on 24 December 2024.

11 The defendant was required to file a response to the Notice of Arbitration by 10 December 2024 but failed to do so. The defendant also failed to pay her share of the arbitration costs.

12 During December 2024, in correspondence between the parties' solicitors, the plaintiff expressed concerns that the defendant's inaction in the arbitration constituted delaying tactics designed to avoid her payment obligations under the SPA.

13 The defendant provided photographs purporting to show her hospitalization in December 2024 as justification for delay. However, expert evidence establishes that one such photograph was identical to one previously provided to the plaintiff on 24 May 2024 and another was a photograph of a digital screen displaying an earlier photograph, casting doubt on the veracity of the defendant's representations.

14 On or about 7 February 2025, the defendant's solicitors ceased to act for her in this proceeding and in the arbitration.

15 On 17 March 2025, the SIAC suspended its administration of the arbitral proceeding pursuant to Rule 34(6)(a) of the 2016 SIAC Rules.

16 The plaintiff submits that the stay should be lifted because:

(a) first, the defendant has not done all things necessary on her part to have the matters determined in accordance with the arbitration agreement with reasonable expedition;

(b) secondly, the stay was an interlocutory order that may be the subject of a further order in the proceeding;

(c) thirdly, the consent order made on 6 November 2024 constituted a variation of the parties' agreement to arbitrate and the defendant's conduct has resulted in the arbitration agreement becoming 'inoperative' within the meaning of art 8 of the UNCITRAL Model Law on International Commercial Arbitration;

(d) fourthly, there is no risk of inconsistent findings as the arbitration has been suspended with no prospect of any further steps being taken; and

(e) finally, lifting the stay is consistent with the overarching purpose of facilitating the just, efficient, timely and cost-effective resolution of the real issues in dispute.

17 The plaintiff also seeks orders for the filing and service of any defence and a date by which the plaintiff may file any application for summary judgment.

18 The plaintiff has served its summons and supporting material on the defendant by email to addresses previously used in the proceedings and by registered post to the address identified in the Notice of ceasing to act.

19 The Court has power to lift a stay that was imposed for case management purposes and in the interests of justice. As Hargrave J explained in UDP Holdings Pty Ltd (Receivers and Managers Appointed) v Ironshore Corporate Capital Ltd:

Such an order is properly characterised as a temporary stay made for case management purposes and in the interests of justice. Such a stay should be until further order, so as to allow any affected party to apply for the stay to be lifted where circumstances change.[2]

20 His Honour also observed that if a stay is ordered in such circumstances and the arbitration becomes unduly protracted, the Court can lift the stay if it is just and convenient to do so.

21 Similarly, in Civil Mining & Construction Pty Ltd v Cheshire Contractors Pty Ltd,[3] Henry J recognized that, even in circumstances where parties have been referred to arbitration pursuant to a contractual arbitration clause, if the dispute cannot be determined by arbitration due to some event or decision in the arbitration process, such a development may ground an application to lift the stay.[4]

22 In the present case, the parties expressly agreed that the stay could be lifted if the defendant did not do all things necessary on her part to have the matters determined by arbitration with reasonable expedition.

23 The evidence clearly establishes that this condition has been satisfied. The defendant has failed to file a Response to the Notice of Arbitration and failed to pay her share of the arbitration costs. These failures have resulted in the suspension of the arbitration.

24 The defendant's conduct strongly suggests an intention to delay the resolution of the dispute. The evidence regarding the allegedly misleading photographs purporting to show the defendant's hospitalization supports this inference.

25 I accept the plaintiff's submission that the consent order of 6 November 2024 constituted a variation to the arbitration agreement and that the defendant's conduct has rendered the arbitration agreement 'inoperative' within the meaning of art 8 of the UNCITRAL Model Law.

26 As Rees J observed in WCX M4-M5 Link AT Pty Ltd v Acciona Infrastructure Projects Australia Pty Ltd (No 2):

An arbitration agreement may be 'inoperative' as it is unenforceable, has been amended by a further agreement, is the subject of res judicata, has been set aside by a Court, has been frustrated or discharged by breach or by reason of waiver, estoppel, election or abandonment or has otherwise been repudiated.[5]

No amendment, supplement, modification or clarification to this Agreement shall be valid or binding unless set forth in writing and duly executed by all of the Parties to this Agreement.

28 In this case, the parties' agreement to arbitrate was amended by them signing a minute of consent order that the stay of proceeding was subject to the condition that the stay could be lifted if the defendant did not take all necessary steps to progress the arbitration with reasonable expedition. As the defendant has failed to fulfill this obligation, the pre-condition to lifting the stay has been met.

29 Further, there is no risk of inconsistent findings as the arbitration has been suspended with no indication that the defendant intends to take any further steps in the arbitration.

30 Finally, lifting the stay is consistent with the overarching purpose under the Civil Procedure Act 2010 (Vic) of facilitating the just, efficient, timely and cost-effective resolution of the real issues in dispute.

31 The defendant has had ample opportunity to engage with both the arbitration process and this proceeding, but has failed to do so.

32 For the reasons outlined above, I am satisfied that the stay should be lifted and the proceeding should proceed in accordance with the timetable proposed by the plaintiff.

(a) The stay of the proceeding imposed by paragraph 1 of the orders made on 6 November 2024 is lifted.

(b) The defendant file and serve any defence to the plaintiff's statement of claim by 23 May 2025.

(c) The plaintiff file any application for summary judgment by 7 June 2025.

(d) The defendant pay the plaintiff's costs of the application.

[2] [2016] VSC 400; (2016) 51 VR 60, 72 [39].

[5] [2022] NSWSC 505, [117].