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The Omnibus is finally here: changes to Singapore’s insolvency laws

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).

Singapore, Insolvency & Restructuring, Litigation, Herbert Smith Freehills LLP, Coronavirus
Stuck in the middle? Singapore court warns parties in a chain from taking inconsistent positions in either direction, but blocks winding-up proceedings in favour of arbitration

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.

Singapore, Insolvency & Restructuring, Litigation, Herbert Smith Freehills LLP, Coronavirus
Singapore Court of Appeal introduces a lower standard of review for debtors defending a disputed debt that is subject to an arbitration agreement

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.

Singapore, Arbitration & ADR, Insolvency & Restructuring, Litigation, Herbert Smith Freehills LLP
Court of Appeal rejects illegality defence in claim against liquidator

The Court of Appeal has refused to allow a liquidator of a company that was the vehicle for a VAT fraud to rely on the defence of illegality in defending a claim for breach of duty under section 212 of the Insolvency Act 1986: Top Brands Ltd and others v Sharma (as former liquidator of Mama Milla Ltd) [2015] EWCA Civ 1140.

United Kingdom, Insolvency & Restructuring, Litigation, Tax, White Collar Crime, Herbert Smith Freehills LLP, Fraud, Liquidator (law), Insolvency Act 1986 (UK), Court of Appeal of England & Wales
Supreme Court confirms company in liquidation not prevented from claiming against directors on the basis of fraud attributable to the company

The Supreme Court has unanimously upheld a Court of Appeal decision refusing to strike out a claim by a “one-man” company in liquidation, which had been the vehicle for a VAT fraud, against its former directors and overseas suppliers alleged to have been involved in the fraud: Jetivia SA v Bilta (UK) Limited [2015] UKSC 23 (see our post on the Court of Appeal decision 

United Kingdom, Insolvency & Restructuring, Litigation, White Collar Crime, Herbert Smith Freehills LLP, Fraud, Liquidation, Supreme Court of the United States
Court of Appeal finds company in liquidation not prevented from claiming against directors on basis fraud attributable to company

The Court of Appeal has unanimously upheld an order refusing to strike out a claim by a “one-man” company in liquidation, which had been the vehicle for a VAT fraud, against its former directors and overseas suppliers alleged to have been involved in the fraud.

United Kingdom, Insolvency & Restructuring, Litigation, White Collar Crime, Herbert Smith Freehills LLP, Fraud, Value added tax, Liquidation, HM Revenue and Customs (UK), Court of Appeal of England & Wales