Indonesia’s growing economy offers a wealth of opportunities for foreign investors. Nonetheless, as in any jurisdiction, investors should obtain proper advice before entering commercial engagements with local counterparties.
Investors or companies may, as part of their wider investment thesis or business plan, make distressed asset purchases to strategically acquire assets which they may otherwise not be able to conveniently or affordably obtain. While the face value of the asset purchased may be lower than that acquired in a “solvent” transaction, purchasers should be aware that such acquisitions carry a heavy tail liability risk, which may take the form of a potential clawback as a transaction at an undervalue.
Introduction
The intersection of the arbitration and insolvency regimes has once again come under judicial scrutiny. In Aryan (SEA) Private Limited v Pure Group (Singapore) Pte Ltd [2025] SGHC 99 (Aryan), the General Division of the High Court of Singapore (GD) considered whether an application to restrain a winding-up petition raised a dispute that prima facie fell within the scope of an arbitration agreement, or whether the application amounted to an abuse of process.
The Insolvency and Bankruptcy Board of India (“IBBI”) recently notified the IBBI (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2025 dated May 19, 2025 and the IBBI (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2025 dated May 26, 2025 (collectively referred as “Amendment Regulations”), amending certain key provisions under the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”).
Key takeaways
The Insolvency and Bankruptcy Code, 2016 (IBC), heralded a new era for debt resolution in India. Envisioned as a comprehensive framework, it aimed to streamline and expedite the reorganisation and insolvency processes for corporate entities, partnership firms, and individuals alike, with the overarching goal of maximising asset value.
In its ruling of April 18, 2024 (case no. IX ZR 129/22), the Federal Court of Justice (BGH) once again clarified that external lenders such as banks can be treated as shareholders under insolvency law under certain circumstances – especially if they are granted a position similar to that of a member through contractual provisions such as profit participation and investment reservation.
On 12 June 2025, the Council of the EU announced that member states have agreed on a general approach to a directive aimed at bringing national insolvency standards closer together. This draft directive is designed to make the EU more attractive to foreign and cross-border investors by reducing the legal uncertainties and complexities associated with differing national insolvency laws.
The Protection of Employees (Employers’ Insolvency) (Amendment) Bill 2025 aims to provide greater protection to employees where their employer becomes insolvent. The Bill will allow greater access to a Social Insurance Fund to protect employee pay-related entitlements and claims for historic entitlements over the previous 40 years. The devil is in the detail, however, with very specific caps and limitations.
In Re King & Wood Mallesons and other matters [2025] SGHC 67, the General Division of the High Court of Singapore (High Court) granted recognition and reliefs under the UNCITRAL Model Law on CrossBorder Insolvency (Model Law) in respect of a consolidated reorganisation of three Chinese companies in the People’s Republic of China (PRC). This decision provides guidance to insolvency office-holders appointed under PRC law on the procedural requirements to seek recognition under the Model Law in Singapore.