Court’s power to summon persons connected with company in liquidation
Under section 285 of the Companies Act of Singapore (Cap 50, 2006 Rev Ed), when a company is in liquidation, the Court may summon before it any person whom the Court considers capable of giving information concerning the promotion, formation, trade dealings, affairs or property of the company. Such person may be examined on oath regarding the above-mentioned matters and the Court may also require him to produce any books or papers in his custody or power relating to the company.
The Singapore High Court in Parakou Shipping Pte Ltd (in liquidation) v Liu Cheng Chan & Orsgranted an application by a company in liquidation for a Mareva injunction to restrain its former officers and other companies which they controlled from dissipating assets. The court also considered the question of whether the company in liquidation acted with sufficient urgency and diligence in commencing the action and applying for the Mareva injunction.
The parties
Between 16 January 2015 and 24 February 2015, the Ministry of Law (the “MinLaw”) conducted a public consultation to seek feedback on proposed amendments to the Bankruptcy Act (the “Act”) which principally sets out Singapore’s bankruptcy regime. Set out below is a summary of the key proposed amendments.
Institutional creditor must appoint private trustee
The Singapore High Court in Beluga Chartering GmbH (in liq) v Beluga Projects (Singapore) Pte Ltd (in liquidation) & Anor considered whether Singapore liquidators of Singapore-registered subsidiary companies were able to repatriate the applicant's ("Beluga Chartering") Singapore assets to Germany, where Beluga Chartering was incorporated.
This case involved a foreign company, Beluga Chartering GmbH ("Beluga") that had both creditors and assets in Singapore. However, as it had not carried on business here, it had not been required to register as a branch.
In March this year, the High Court in Beluga Chartering1 addressed a unique provision of Singapore's Companies Act that requires local liquidators to ring-fence a foreign company's assets for the settlement of the debts it incurred in Singapore before they transmit its assets to overseas liquidators and creditors. This decision exploring the implications of section 377 on Singapore's cross-border insolvency legal framework is timely considering the ongoing review of Singapore's insolvency laws.
A summary of the factual background
The term “globalisation” is associated with expansion and the free movement of capital and resources. Funds raised in Country A can be invested in a variety of different countries for better returns. In times of economic expansion, it can be unfashionable to consider insolvency issues. This may explain why insolvency practitioners find themselves holding many discussions among themselves.
The Ministry of Law (“MinLaw”) is conducting a public consultation on key recommendations made in a final report by the Insolvency Law Review Committee ( the “Committee”) in relation to Singapore’s personal and corporate insolvency regimes. The public consultation period runs from 7 October 2012 to 2 December 2013.
Alvin Yeo SC and Melvin Lum acted for the Second Intervener, Thomas Chan, in his claim for $3,275,935.81 as interest for the late completion of the sale of a property ("Property").
The liquidators of the plaintiff Dynasty Line Ltd. ("Dynasty") brought proceedings against the first defendants ("Sia") and second defendant ("Lee") for breaches of duty owned to Dynasty while they were its directors.