Significance: Singapore High Court recognised a foreign bankruptcy order from Indonesia and considers the legal principles and restrictions on the effecting of the order.
Update: this decision has been reversed on appeal. Discussion on the appeal decision is found here.
[19]: Recognition should be granted to a foreign bankruptcy order if the following requirements are met:
(a) First, the foreign bankruptcy order is made by a court of competent jurisdiction.
(b) Second, that court must have jurisdiction on the basis of:
(i) the debtor’s domicile or residence; or
(ii) submission by the debtor to the jurisdiction of the court.
(c) Third, the foreign bankruptcy order must be final and conclusive.
(d) Fourth, no defences to recognition apply.
[18] A foreign judgment may be final and conclusive, though it is subject to appeal. Recognition will not be denied, but a stay or other order may be made to preserve the position pending appeal.
[21] Aedit Abdullah J was not convinced that that was a valid distinction to draw in order to deny the use of the foreign judgment doctrine in this area. He was not persuaded that the fact that a bankruptcy order affects the whole world renders it different from other judgments or orders: corporate insolvency orders have the same effect after all. The effect of a bankruptcy order should be taken into account in considering the scope of recognition and assistance. But given the modified universalist approach modified endorsed in Beluga Chartering GmbH (in liquidation) and others v Beluga Projects (Singapore) Pte Ltd (in liquidation) and another (deugro (Singapore) Pte Ltd, non-party) [2014] 2 SLR 815 (CA), which applies just as much to bankruptcies as to corporate insolvencies as a matter of principle, cooperation should be extended. Some of the authorities invoked were much older, and came from an era in which there was less international cooperation and a different view was taken not just of foreign bankruptcies but also insolvencies.
[22] Recognition of the foreign appointment of insolvency practitioners does, however, throw up a number of issues in comparison to recognition and enforcement of foreign money judgments. The assistance of the court would be required, particularly in dealings with assets, monies and information. These go beyond what is entailed in the enforcement of foreign judgments, for instance. The effects on third parties may also be more extensive. For that reason, it may be appropriate for the court to impose restrictions or requirements, for example, on the expatriation or taking possession of certain assets. In this regard, the requirements of the Model law may provide some suitable guidance.
[51] Assistance would generally follow from recognition in bankruptcy cases, though the scope of such assistance would be bounded by any concerns compatible with the general approach of modified universalism as endorsed in Beluga. Thus, limitations may be placed on the repatriation of funds out of Singapore, and orders for possession and sale may be required if other interests in Singapore are affected.
[52] In the circumstances, full recognition was granted to the Indonesian Bankruptcy Orders. The applicants were empowered to administer the respondents’ property in Singapore, save that leave of court should be obtained in respect of transfers of real or immovable property and for the repatriation of any assets out of Singapore. While the applicants were authorised to seek and receive information on the respondents’ finances from various banks, any moneys were to remain in the existing accounts.
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