Introduction

In the midst of the COVID-19 pandemic, many businesses have been severely impacted. The Singapore government thus introduced the Simplified Insolvency Programme ("SIP"), which seeks to support micro and small companies ("MSCs") to restructure their debts or to wind up. The SIP has come into effect on 29 January 2021.

The SIP comprises two separate programmes which eligible MSCs may apply for:

The COVID - 19 pandemic has had a tremendous and unprecedented impact on the global economy.To mitigate this, many governments have introduced temporary relief measures to help local businesses.

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

A. Overview

In Denka Advantech Pte Ltd v Seraya Energy Pte Ltd [2020] SGCA 119, the Singapore Court of Appeal (“SGCA”) had the opportunity to consider the applicable law with regard to penalty and liquidated damages (“LD”) clauses.

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.