In establishing that a debtor had unfairly preferred one creditor over others, it was not necessary to show that the debtor knew that it was insolvent or imminently insolvent, and further that the pressure on a debtor to pay one creditor only vitiates the desire to prefer if there were good commercial reasons for the payment to be made: -- Jurong Technologies Industrial Corp Ltd (under judicial management) v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA [2010] SGHC 357 (Singapore, High Court, 9 December 2010)

Introduction

The Singapore High Court has confirmed that it will recognize the status and powers of a foreign liquidator in the liquidation of an unregistered foreign company in Singapore.

Life cycle of a company

Statistics from the Accounting and Corporate Regulatory Authority ("ACRA") of Singapore reveal that the increasing number of companies formed in Singapore (2004:17,151; 2009:26,414) is matched by a corresponding increase in the number of companies ceasing operations (2004:5,882; 2009:22,388).

The Insurance (Amendment) Bill 2011 (the "Bill") was passed in Parliament on 11 April 2011.

Introduction

An unfair preference transaction will only be voided under the Companies Act if it is influenced by a desire to prefer the receiving party in the event of insolvency, and not if it is motivated by proper commercial considerations. In Tam Chee Chong and another v DBS Bank Ltd [2010] SGHC 331, the Singapore High Court had the opportunity to consider what constitutes proper commercial considerations.

Where a plaintiff sought to claw-back payments made to the defendant on the basis that they amounted to an unfair preference, or a transaction at an undervalue, or had been made with intent to defraud, held that such a claim could not be arbitrated but had to be dealt with in court proceedings:

In Larsen Oil and Gas Pte Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] SGCA 21, the Singapore Court of Appeal endorsed, and elaborated on, the stance taken by the High Court concerning the relationship between arbitration and insolvency

In Larsen Oil and Gas Pte Ltd v Petroprod Ltd (in official liquidation in the Cayman Islands and in compulsory liquidation in Singapore) [2011] SGCA 21, the Singapore Court of Appeal endorsed, and elaborated on, the stance taken by the High Court concerning the relationship between arbitration and insolvency.

Where a contract contains a non-assignment clause, a liquidator may not, as part of his liquidation of an insolvent company's assets, assign the contract to a third party without first seeking the consent of the contracting counterparty:

-- Owners of Strata Plan 5290 v CGS & Co Pty Ltd (Australia, New South Wales, Court of Appeal, 30 June 2011)

A winding up application may be resisted by reason of a cross-claim against the petitioning creditor.

"Subject to contract" clauses are often used in commercial transactions to indicate that an agreement is incomplete until the terms of a formal contract have been settled