A case study of W Y Steel Construction Pte Ltd v Tycoon Construction Pte Ltd (in liquidation) [2016] SGHC 80

Overview

In the race between Singapore and Hong Kong to become the leading dispute resolution centre in Asia, Singapore may be taking the lead.

Singapore is forging ahead with plans to approve third party funding of disputes.

Draft legislation aimed at permitting third party funding of international arbitration (including related litigation and mediation), enforcement proceedings and proceedings to stay was published by Singapore’s Ministry of Law on 30 June 2016.

A milestone year

The acceptance of the Committee’s recommendation is a boost in Singapore’s bid to become a debt restructuring hub, and it is likely to be exciting to see how and when these recommendations will be implemented.

On 20 July 2016, Singapore’s Ministry of Law accepted the recommendations of the Committee to Strengthen Singapore as an International Centre for Debt Restructuring (the “Committee”).

Counterparties of Swiber Holdings Limited ("Swiber") and its group companies would do well to keep a close tab on any debts outstanding from the group.

Swiber, an SGX-listed company in the oil fields services sector, issued an announcement in the early hours of Thursday 28 July 2016 stating that it filed an application in the Singapore High Court for a voluntary winding up on Wednesday afternoon, together with an application to place the company under provisional liquidation.

Introduction

A statutory demand is an important step in the bankruptcy process, as it allows the creditor to initiate a bankruptcy application against the debtor. It is thus vital that any statutory demand issued must conform to the legislative requirements. In the recent case of Ramesh Mohandas Nagrani v United Overseas Bank Ltd [2015] SGHC 266, the Singapore High Court had to decide whether to set aside a statutory demand based on alleged irregularities in its contents, and touched on what makes a statutory demand invalid.

Financial difficulties are not uncommon in the course of a business’ lifespan, and though there may be the threat of insolvency, there are a number of alternative avenues through which a company may stave off winding up proceedings. In Re Conchubar Aromatics Ltd [2015] SGHC 322, the Singapore High Court examined restraint orders against insolvency proceedings under s210 of the Companies Act, which deals with schemes of arrangement.

S210 prescribes a series of stages for the implementation of schemes of arrangement, including the following:

Applicability of the Doctrine of Anticipatory Breach to Executed Contracts

In a rare appeal before five judges in the Singapore Court of Appeal, two questions of great practical significance pertaining to contract law were authoritatively and definitively answered:-

Seah Teong Kang v Seah Yong Chwan [2015] SGCA 48

On 10 September 2015, the Singapore Court of Appeal issued a judgment in Seah Teong Kang v Seah Yong Chwan on section 259 of the Companies Act. Section 259 provides:

“Any disposition of the property of the company, including things in action, and any transfer of shares or alteration in the status of the members of the company made after the commencement of the winding up by the Court shall unless the Court otherwise orders be void.”

MF Global Singapore Pte Ltd v Vintage Bullion DMCC [2015] SGHC 162

The Singapore High Court in MF Global Singapore Pte Ltd v Vintage Bullion DMCC considered a contention by customers of an insolvent brokerage firm that profits made from certain leveraged foreign exchange and leveraged commodity transactions with the firm were held on trust for the customers. The court disagreed. This meant that the customers can only stand as unsecured creditors over the profits. 

Facts

S210(1) of the Companies Act allows the Court to order a meeting between a company and its creditors to consider compromises or arrangements. In Re Sembawang Engineers and Constructors Pte Ltd [2015] SGHC 20, the Singapore High Court granted an application by Sembawang Engineers and Constructors Pte Ltd (the “Company”) for a s210(1) order. The applicant Company was successfully represented by Patrick Ang, Low Poh Ling and Chew Xiang from Rajah & Tann Singapore LLP.