SINGAPORE INSOLVENCY, RESTRUCTURING AND DISSOLUTION BILL PASSED
On 1 October 2018, The Insolvency, Restructuring and Dissolution Bill was passed in Singapore.
This will consolidate personal and corporate insolvency laws into the Insolvency, Restructuring and Dissolution Act, with the Bankruptcy Act to be repealed and the relevant corporate insolvency provisions in the Companies Act being removed.
On 1 October 2018, the Singapore Parliament passed the Insolvency, Restructuring and Dissolution Bill (the "Bill"), an omnibus legislation which will consolidate Singapore's personal insolvency, corporate insolvency and restructuring laws, which are currently under separate legislative regimes.
The overhaul follows recent amendments to the corporate insolvency and restructuring provisions of the Singapore Companies Act, and is part of a wider effort to boost the debt restructuring ecosystem in Singapore.
Key provisions introduced by the bill
Dispute Resolution
Singapore
Newsletter
December 2018
In This Issue:
Key Legal Developments
1. Arbitration 2. Construction
3. Commercial Litigation
4. Restructuring & Insolvency
5. Reforms to Singapore's civil justice system
Upcoming Events
Key Resources
For more information, please contact:
Nandakumar Ponniya Principal +65 6434 2663 nandakumar.ponniya @bakermckenzie.com
Celeste Ang Principal +65 6434 2525 celeste.ang @bakermckenzie.com
In a noteworthy decision to participants in the energy industry, the High Court of England & Wales examined what constitutes a valid liquidated damages clause in the event of delayed completion of a solar project. And last week in Singapore, the High Court considered the enforceability of liquidated damages provisions on termination of power purchase agreements.
Singapore’s new restrictions on ipso facto clauses are welcome news to the local restructuring community, and a strong step towards establishing it as one of the region’s premier restructuring hubs. But how will these restrictions affect innocent counterparties and existing commercial contracts, ask partner Guan Feng Chen and associate Jonathan Tang at Morgan Lewis Stamford?
New restrictions on ipso facto clauses
In the recent High Court judgment in VTB Bank (Public Joint Stock Company) v Anan Group (Singapore) Pte Ltd,(1) the plaintiff successfully obtained a winding-up order on a debtor company six weeks after the service of a statutory demand for an underlying debt of $250 million.
At first blush, it may seem counterintuitive for financiers to compete to provide loans to debtor companies that have just filed for protection under an insolvency or restructuring procedure, but they have been proven to do so on a large scale in US Chapter 11 cases and for a variety of reasons, whether to protect an existing loan position or taking an opportunity to garner significant, safe returns as a new lender.
The Act is a groundbreaking development in Singapore's corporate rescue laws and includes major changes to the rules governing schemes of arrangement, judicial management, and cross-border insolvency. The Act also incorporates several features of chapter 11 of the U.S. Bankruptcy Code, including super-priority rescue financing, cram-down powers, and prepackaged restructuring plans. The legislation may portend Singapore's emergence as a center for international debt restructuring.
In a recent landmark judgment, the Singapore High Court has ruled that it has the power to alter priorities between maritime claimants in “exceptional circumstances”.
In THE POSIDON (2017) SGHC 138, Piraeus Bank (Bank) commenced two mortgagee actions in Singapore, arising from the ship owner’s default under a loan agreement, and arrested two vessels, THE POSIDON and THE PEGASUS. These vessels were subsequently sold by judicial sale.