Payments made by a company to its holding company shortly before its winding up were held to have amounted to an unfair preference of the holding company and could be clawed-back from it
The Singapore High Court has considered for the first time whether an action brought to avoid transactions that allegedly violated insolvency laws should be stayed in favour of arbitration. The court held that such disputes are not suitable for arbitration due to the public interest involved.
The Singapore Court of Appeal decision of Chee Yoh Chuang & Anor (as Liquidators of Progen Engineering Pte Ltd (in liquidation)) v Progen Holdings Ltd considered how the lawought to balance the rights of creditorswith the companies directors' desire to keep the company afloat when the company has financial difficulties and when payments were made to creditors.
In an application by Win-Win Aluminium Systems Pte Ltd (the
“Company”) pursuant to section 210 of the Companies Act, the Company
sought an order to convene a meeting of creditors for the purposes of
approving a scheme of arrangement.
The case of Noerwest Pte Ltd (in liquidation) v Newport Mining Ltd [2010] SGHC144 involved the sale of the shares of a company which owned phosphate mining and production fascilities in the Sichuan province.
In the recent Singapore High Court decision of Kong Swee Eng v Rolles Rudolf Jurgen August, the court held, among other things, that the concept of overreaching applies to a sale exercised by a mortgagee pursuant to a contractual right in a charge (as opposed to a statutory power of sale) and that the winding up of a company does not frustrate the sale and purchase of shares in the company.
In Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) v Larsen Oil and Gas Pte Ltd [2010] SGHC 186 the Singapore High Court considered whether an action brought to avoid transactions that allegedly violated insolvency laws should be stayed in favour of arbitration.
The case of Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) v Larsen Oil and Gas Pte Ltd [2010] SGHC 186 (“Petroprod Ltd”) is significant as the Singapore High Court decided that claims which arise from avoidance provisions in Singapore insolvency laws are non-arbitrable as they exist for the benefit of the general body of creditors as a whole.
In Pacific King Shipping Pte Ltd & Anor v Glory Wealth Shipping Pte Ltd, one of the key issues which the Singapore High Court had to consider was whether the defendant was precluded from commencing winding up proceedings against the plaintiffs via section 254(2)(a) read with section 254(1)(e) of the Companies Act (the “CA”) on the basis of a debt that was founded on a foreign arbitration award which had not been enforced.
Are you already a board member or executive of a Slovak company or about to become one? If so, you should know about the proposed amendment to the Slovak Commercial Code. The amendment aims to address the so-called “white horses” and “tunneling (asset stripping)” of the companies.