Introduction

In Allenger, Shiona (Trustee-in-bankruptcy of the Estate of Pelletier, Richard Paul Joseph) v Pelletier, Olga and another [2020] SGHC 279, Rajah and Tann Singapore's Fraud, Asset Recovery and Investigations team led by partners Danny Ong and Yam Wern-Jhien, assisted by Bethel Chan and Chen Lixin, prevailed in a significant decision examining principles governing the grant of freezing injunctions against foreign defendants in the context of a cross-border insolvency and asset recovery claim.

A recent judgment of the Supreme Court of Western Australia, Dalian Huarui Heavy Industry International Company Ltd v Clyde & Co Australia [2020] WASC 132 (available here), demonstrates that the use of interim measures to provide security for an amount in dispute can be a very powerful remedy when structured through the creation of a trust.

The Singapore legal system is historically based on English law, with an ever increasing local jurisprudence. A strict application of the rule of law, up-to-date regulations and legal instruments and  fast-reacting legal institutions make Singapore a popular legal hub for the region.  

Considerations for Distressed Transactions

Clean Sales

If a company is already trading insolvent or is on the brink of insolvency, certain provisions may jeopardise a “clean sale”, such as:

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The COVID-19 pandemic is posing the biggest existential threat to commercial entities in a generation. Companies across the globe are getting to grips with multiple operational challenges and many are rightly concerned about their business continuity and restructuring options should the pressure begin to become insurmountable.

This article is produced by CMS Holborn Asia, a Formal Law Alliance between CMS Singapore and Holborn Law LLC.

Impact of COVID-19 on corporate failures and directors’ conduct

Given the uncertainties surrounding the COVID-19 pandemic, it is anticipated that the number of formal insolvencies in Singapore will trend upwards across numerous sectors as companies see a decline in their financial position.

This note sets out the circumstances in which a creditor may successfully lift a statutory moratorium against a company in administration in England and Wales, and in Singapore.

English law

This note discusses two recent decisions of the Court of Appeal of Singapore that dealt with the standard of review to be applied in winding up proceedings where a debtor asserts that there is a dispute which parties agreed to resolve by way of arbitration.

Winding up proceedings

It is quite often that we see contracts providing for disputes arising under the contract to be resolved by way of arbitration.

This article is produced by CMS Holborn Asia, a Formal Law Alliance between CMS Singapore and Holborn Law LLC.

The coronavirus pandemic has left companies increasingly concerned about the possibility of winding-up as a result of a failure to pay debts. In a situation where a party’s disputed debt is subject to an arbitration clause, the debtor may wish to seek a stay or dismissal of any winding-up applications commenced against it before the court in favour of arbitration.

The Singapore Court of Appeal has clarified the standard of review that applies to winding-up applications where the underlying relationship between the debtor and creditor is subject to an arbitration agreement.

Background

Under Section 254(2)(a) of the Singapore Companies Act, a company can be wound-up by the court upon the application of a creditor who has served a statutory demand on the company for a debt of SGD 10,000 or more and the debt continues to remain unpaid for three weeks thereafter.

Through the three budgets as announced by the Singapore Government, a total of S$9 billion will be disbursed to businesses and individuals in April 2020 to counter the impact that the COVID-19 pandemic has had on the business community in Singapore. Businesses and workers in Singapore will receive reliefs through various measures announced by the Singapore Government in the Solidarity Budget and Reliance Budget, through the enhanced Wage Credit Scheme, Foreign Workers Levy, and the Jobs Support Scheme.