1. Introduction 

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 BWG v BWF [2020] SGCA (“BWG”) the Singapore Court of Appeal considered the application of the “prima facie dispute” ground which a Singapore debtor (the Respondent) raised to resist winding up proceedings when there was a valid arbitration agreement. The Court of Appeal considered this in circumstances where the Appellant alleged that the debtor’s position in the winding up proceedings is allegedly an abuse of process which is inconsistent with the position the debtor has taken in other proceedings against X.

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.

During the COVID-19 crisis, many companies are facing unexpected financial distress, and taking steps to stabilise their business and bolster their finances.

Many directors will not have experienced these issues before, and should be aware of how their duties are impacted when the company is in financial distress.

This guide has been prepared on the basis of Hong Kong law principles. Many of the principles will also be applicable to other common law jurisdictions.

How are companies responding to the current crisis?