Dispute Resolution Singapore Client Alert July 2015 Singapore High Court determines proprietary interests of customers of insolvent brokerage firm, MF Global Singapore Pte Ltd In the latest instalment arising out of the insolvency of MF Global, the Singapore High Court had to decide whether certain customers of the insolvent brokerage firm had any proprietary interests in the assets of the firm, and whether these assets were held on trust for these customers.

Introduction

On 14 July 2015, the Singapore Parliament passed the Bankruptcy Amendment Bill, which seeks to establish certain reforms in Singapore’s bankruptcy regime.

Senior Minister of State for Law Indranee Rajah said in Parliament that the changes address the striking of a balance between the need to hold bankrupts accountable and allowing them to have the opportunity to make a fresh start in their financial affairs after a reasonable period of time.

In this Update, we highlight key aspects of these reforms, which include:

In the recent landmark decision of Re Vanguard Energy Pte Ltd [2015] SGHC 156, the Singapore High Court confirmed that litigation funding may, in the context of insolvency and under the appropriate circumstances, be permitted in Singapore.

Re Vanguard Energy Pte Ltd [2015] SGHC 156

On 14 July 2015, the Bankruptcy (Amendment) Bill 2015 (the “Bill”) was passed in Parliament. It is not yet in force. The Bill will amend the Bankruptcy Act to create a more rehabilitative regime for bankrupts and ensure better utilisation of public resources.

When the Bill comes into force, it will effect the following changes to the Bankruptcy Act:

Introduction

The case of Re Vanguard Energy Pte Ltd was heard in Singapore recently, with judgment handed down by the High Court on 9 June 2015.

Of significance to liquidators and underlining the importance of this case to the insolvency profession in Singapore, Judicial Commissioner Chua Lee Ming stated that “it is undeniable that litigation funding has an especially useful role to play in insolvency situations”.

Key Points This decision brings clarity to liquidators taking appointments in Singapore on a number of aspects.

Manharlal Trikamdas Mody E Anor v Sumikin Bussan International (HK) Limited [2014] SGHC 123

The Singapore High Court in the case of Manharlal Trikamdas Mody E Anor v Sumikin Bussan International (HK) Limited [2014] SGHC 123 decided a number of important issues in the fields of bankruptcy, assignment and ex parte applications.

Court’s power to summon persons connected with company in liquidation

Under section 285 of the Companies Act of Singapore (Cap 50, 2006 Rev Ed), when a company is in liquidation, the Court may summon before it any person whom the Court considers capable of giving information concerning the promotion, formation, trade dealings, affairs or property of the company. Such person may be examined on oath regarding the above-mentioned matters and the Court may also require him to produce any books or papers in his custody or power relating to the company.

The Singapore High Court in Parakou Shipping Pte Ltd (in liquidation) v Liu Cheng Chan & Orsgranted an application by a company in liquidation for a Mareva injunction to restrain its former officers and other companies which they controlled from dissipating assets. The court also considered the question of whether the company in liquidation acted with sufficient urgency and diligence in commencing the action and applying for the Mareva injunction.

The parties