When goods are delivered to a professional storage operator (we will refer to them as a warehouseman) for safe keeping, they may become subject to a lien. A lien is a security right which gives the warehouseman rights over the goods that can take precedence over the rights of others, including the owner. The warehouseman is entitled to exercise the lien when he or she is left unpaid for services rendered and in so doing will gain legal control over the goods.

Beluga Chartering GmbH (in liquidation) & Ors v Beluga Projects (Singapore) Pte Ltd (in liquidation) & Anor (deugro (Singapore) Pte Ltd, non-party) [2014] SGCA 14

The theory of universality in insolvency, along with globalisation, has gained much traction across many jurisdictions in recent years. Briefly, the universality theory proposes that an insolvency proceeding has worldwide effect over all the assets of the insolvent company, wherever they may be.

Introduction

When an unregistered foreign company becomes insolvent in both its place of incorporation and in Singapore, should its assets in Singapore be remitted to the foreign liquidator or be held in Singapore to satisfy locally incurred liabilities first? This was the question that the Singapore Court of Appeal  faced 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] SGCA 14.

Facts

On 6 May 2014, the Ministry of Law ("MinLaw") issued its response to the feedback received from the public consultation on the final report (the "final report") of the Insolvency Law Review Committee (the "Committee") in relation to proposed recommendations affecting Singapore's personal and corporate insolvency regimes.

Singapore’s Court of Appeal has just laid down guidance on how professionals should approach their fee engagements with clients.¹ The judgment reveals an expectation of strict adherence to the terms of the letter of engagement. It also serves as an admonishment to retain a detailed inventory of the work done.

Background

As part of the Singapore Budget 2013, the Ministry of Law has proposed a major review of Singapore's bankruptcy and insolvency regime, with a particular focus on making it easier to discharge personal bankruptcies due to business failure or unsecured consumer credit.

The Insolvency Law Reform Committee will also be finalizing its report on the Omnibus Insolvency Bill soon. This Bill is intended to address certain perceived weaknesses in the existing personal bankruptcy and corporate insolvency mechanisms, resulting in a better and more efficient regime.

The Singapore High Court in Beluga Chartering GmbH (in liq) v Beluga Projects (Singapore) Pte Ltd (in liquidation) & Anor considered whether Singapore liquidators of Singapore-registered subsidiary companies were able to repatriate the applicant's ("Beluga Chartering") Singapore assets to Germany, where Beluga Chartering was incorporated.

This case involved a foreign company, Beluga Chartering GmbH ("Beluga") that had both creditors and assets in Singapore. However, as it had not carried on business here, it had not been required to register as a branch.

In March this year, the High Court in Beluga Chartering¹ addressed a unique provision of Singapore's Companies Act that requires local liquidators to ring-fence a foreign company's assets for the settlement of the debts it incurred in Singapore before they transmit its assets to overseas liquidators and creditors. This decision exploring the implications of section 377 on Singapore's cross-border insolvency legal framework is timely considering the ongoing review of Singapore's insolvency laws.

A summary of the factual background