Domestic Procedures
Since 1 October 2022, the Singapore International Commercial Court now has jurisdiction to hear cross-border restructuring and insolvency matters. In addition, foreign lawyers may be appointed to make submissions in restructuring and insolvency proceedings in the SICC. Lawyers may even enter into conditional fee agreements with their clients for selected proceedings provided that certain safeguards are met.
Singapore is getting serious about becoming the region’s international insolvency hub. In this inaugural podcast from the International Insolvency Institute, Hon. Kevin Carey (Ret.) of Hogan Lovells discusses Hon. Christopher S. Sontchi‘s forthcoming move from Delaware bankruptcy judge to International Judge of the Singapore International Commercial Court (SICC).
Introduction
In the context of insolvency, the principle of "modified universalism" (Universalism) is defined by Lord Sumption in Singularis Holdings v Prince Waterhouse Coopers as:
Intercreditor agreements between secured creditors are intended to limit the potential for litigation and result in predictable commercial outcomes with respect to recoveries from collateral in enforcement actions and bankruptcies. Despite the extensive drafting efforts of sophisticated counsel to eliminate ambiguities in these agreements, the interpretation of intercreditor agreements has been the subject of substantial bankruptcy litigation.
Further to K&L Gates’ Singapore Restructuring and Insolvency Alert dated 5 December 2016,[1] Singapore’s revised restructuring and insolvency legislation has come into effect.
In a recent trilogy of decisions concerning the high-profile insolvency of Jersey company Orb arl and its sole shareholder Gail Cochrane, the Royal Court of Jersey provided a clear endorsement of the capability of the Jersey insolvency regime to deal with complex cross-border insolvency matters. This update considers some of the salient points from the saga so far.
The three Royal Court decisions are as follows:
In October 2016, Singapore’s Ministry of Law (“MOL”) launched a public consultation to gather public feedback on proposed amendments to the Companies Act for debt restructuring.[1]
Earlier this year, both the lower and upper houses of Malaysia’s parliament, passed the Companies Bill 2015 (“theBill”) which will harmonise Malaysia's insolvency laws and bring them more in line with modern international standards. Once the Bill comes into effect (it is currently awaiting Royal Assent), it will replace Malaysia’s existing Companies Act 1965.
In a June 3, 2016 decision1 , the United States Bankruptcy Court for the District of Delaware (“the Bankruptcy Court”) invalidated, on federal public policy grounds, a provision in the debtorLLC’s operating agreement that it viewed as hindering the LLC’s right to file for bankruptcy. Such provision provided that the consent of all members of the LLC, including a creditor holding a so-called “golden share” received pursuant to a forbearance agreement, was required for the debtor to commence a voluntary bankruptcy case.