Background and purpose of the proposals
On 8th January proposals for a new ‘Prepackaged Insolvency Resolution Process’ ("PIRP") were issued by the Indian Ministry of Corporate Affairs for public consultation, and we have considered them from a foreign perspective.
The proposals are continuing evidence of the Indian Government’s admirable ongoing commitment to swift further development and improvement of the insolvency framework that was introduced five years ago in the Insolvency and Bankruptcy Code (“IBC”).
Singapore’s Insolvency, Restructuring and Dissolution Act (the “IRDA“), together with 48 pieces of subsidiary legislation, comes into force today, 30 July 2020 (available here).
In AnAn Group (Singapore) Pte Ltd v VTB Bank (Public Joint Stock Company) [2020] SGCA 33, Justice Steven Chong, delivering the judgment of the Court, (1) overturned the decision of the High Court which allowed a creditor (VTB Bank) to proceed with its winding up petition against a debtor (AnAn), and (2) upheld the arbitration agreement pursuant to which the dispute underlying the debt should first be resolved.
It is timely, with further reform of the new Indian Bankruptcy Code (IBC) in prospect, to outline our thoughts on some of the current issues on which various market participants have requested an understanding of the approach and learnings of overseas practitioners.
On 1 February 2017, the Supreme Court of Singapore and the United States Bankruptcy Court for the District of Delaware announced that they will formally implement the Guidelines for Communication and Cooperation between Courts in Cross-border Insolvency Matters ("Guidelines").
The Indian Insolvency and Bankruptcy Code 2016 (Code) introduces a completely new insolvency and resolution regime for India. Key provisions of the Code and related regulations came into effect this month, the latest of them being the provisions relating to the liquidation of corporates and related regulations which came into effect on 15th December. The provisions of the Code that are now in effect introduce a new corporate insolvency resolution process and liquidation process, along with corresponding rules and regulations.
Introduction
The Insolvency and Bankruptcy Code, 2016 (Code) has just been passed by both Houses of the Indian Parliament. The key objectives of the Indian government in driving this legislation forward were to improve India‘s poor ranking on the ease of doing business index created by the World Bank Group and to stimulate the growth of the Indian capital markets, and the stated intention of the Code is to replace the relevant insolvency, restructuring and winding up provisions which are spread over a number of Indian statutes.
Our role
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.
Alstom v Insigma, the (in)famous SIAC arbitration administered under ICC rules, was recently up for yet another round of judicial sparring following years of proceedings in several fora, which left Alstom Technology Limited (“Alstom”) with a HK$261 million award but limited assets against which to execute.
Following the rejection of Stylo's proposed CVA earlier this year and the successful "unfair prejudice" challenge of Powerhouse's CVA in 2007, the recently approved CVA proposal put forward by JJB Sports, widely described by commentators as "ground-breaking", has generated significant interest in the CVA process and the use of a CVA to effect a solvent restructuring of a listed company without resorting to administration and a suspension of trading in its shares.