In Jurong Aromatics Corp Pte Ltd (receivers and managers appointed) and others v BP Singapore Pte Ltd and another matter  SGHC 215, the Singapore High Court considered the nature of charges and whether contractual clauses prohibiting assignments applied to prevent the charge from arising. The court also considered decrystallisation, estoppel, waiver, and whether insolvency set-off applied.
What has not been considered in these reports is that suppliers who consigned goods to Robinsons should consider if it is indeed a consignment at law and whether title or property of goods have passed to Robinsons, or if not then whether they can take back the goods.
Significance: In a rare split decision, the majority of the Court of Appeal (Sundaresh Menon CJ and Tay Yong Kwang JA; Woo Bih Li J dissenting) refused recognition of foreign bankruptcy order due to breach of natural justice.
The majority found that the evidence did not prove that:
(i) notices of the bankruptcy application in Indonesia were properly served on the appellants;
(ii) the appellants had actual knowledge of the bankruptcy proceedings but chose not to appear in them.
The appellants were thus deprived of the opportunity to challenge validity of service or liability under the guarantees and object to the making of the bankruptcy orders.
The Court left open the issue of the correctness of the legal principles on recognition of foreign bankruptcy orders: at .
Supreme Court case summary found here.
Continue reading “Case: Paulus Tannos v Heince Tombak Simanjuntak and others  SGCA 85 – majority of Court of Appeal refused recognition of foreign bankruptcy order due to breach of natural justice”
Ang Chek Chin v ANS Import & Export Pte Ltd (formerly known as Ang Ngee Seng Import & Export Pte Ltd)  SGHC 177
(Coram: Audrey Lim J)
Significance: Generally, a person who is not of the class of persons (company, creditor, contributory, official receiver or liquidator) should not be allowed to appear to be heard on the application to wind up the company. However, in appropriate circumstances, a person who would be directly affected by a winding up order may have the right to be added as a party to the proceedings.
S 285 of the Companies Act to summon a person is not meant for the purpose of determining whether a winding up should be granted but predicated on a winding up order made or provisional liquidator being appointed. The proper procedure for summoning witnesses is in s 257(2) of the CA, which allows the court on a winding up application to do certain things including directing a trial and directing that oral evidence be taken.
Re Design Studio Group Ltd and other matters  SGHC 148
Significance: The High Court granted the applicants super-priority to a debt arising from rescue financing under s 211E of the Companies Act, now s 67 of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA“). Notably, the financing was a ‘roll-up’, i.e. using newly input post-petition finances to pay off existing pre-petition debt, such that the pre-petition debt is effectively paid off and “rolled up” into the super-priority post-petition debt.
Re PT MNC Investama TBK  SGHC 149 – Foreign company held to have standing to apply for moratorium for a scheme of arrangement
Significance: Indonesian company successfully applied for a moratorium under section 211B of the Companies Act, now section 65 of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA“) (which came into force on 31 July 2020). The court, per Aedit Abdullah J, was satisfied that the applicant has a substantial connection to Singapore as per s 351(1)(d) and s 351(2A) of the Companies Act, now s 246(e) of the IRDA.
WHAT TO DO IF A COMPANY THAT OWES ME MONEY HAS BEEN WOUND UP?
By Ronald JJ Wong and Stacey Lopez
In this article, we address some questions you may have if you are a creditor of a Singapore company that has entered or is entering into liquidation or winding up due to insolvency or otherwise.
If your business has been affected by COVID-19, consider if you may seek temporary relief under the new law or object to another party relying on such relief.
First, determine if your contract falls within the Scheduled Contracts.
Second, analyse or get legal advice on whether the inability to perform obligations is to a material extent due to a COVID-19 event.
Third, if you are the defaulting party, serve a notification for relief. If you are the non-defaulting party, consider whether to apply to the assessor for determination if such relief is entitled.
Fourth, if you have ongoing legal proceedings or action or arbitral proceedings, consider if you are barred from continuing further steps.
If your organization requires the conduct of meetings e.g. Annual General Meetings, take note of alternative arrangements for the conduct of meetings which would be compliant with circuit breaker and other measures.
If you are a property owner or tenant, consider if you may be required or entitled to pass or receive the benefits of property tax reductions.
Significance: Singapore Court of Appeal sets out principles on reasonably necessary disclosure required for court to grant leave for calling a creditors’ meeting to consider a proposed scheme of arrangement. Court holds that applicant did not provide necessary financial disclosure required and refused to grant leave.
Continue reading “Case Update: Pathfinder Strategic Credit LP and another v Empire Capital Resources Pte Ltd  SGCA 29 – Necessary Disclosure for Leave for Creditors’ Meeting for Scheme of Arrangement”
When a debtor becomes insolvent, how will its creditors (persons who are owed money by the debtor) be paid out from the available assets of the debtor? What are subordinated debts?