Beluga Chartering Gmb H v Beluga Projects (Singapore) Pte Ltd

JurisdictionSingapore
CourtHigh Court (Singapore)
Judgment Date12 March 2013
Date12 March 2013
Docket NumberCompanies Winding Up No 5 of 2012 (Summons No 3435 of 2012)

[2013] SGHC 60

High Court

Vinodh Coomaraswamy JC

Companies Winding Up No 5 of 2012 (Summons No 3435 of 2012)

Beluga Chartering Gmb H (in liquidation)
Plaintiff
and
Beluga Projects (Singapore) Pte Ltd (in liquidation) and another (Deugro (Singapore) Pte Ltd, non-party)
Defendant

Sim Kwan Kiat and Pang Chong Ren Alexander (Rajah & Tann LLP) for theapplicant

Liquidators for the first respondent in person

Wee Ying Ling Beverly (Insolvency & Public Trustee's Office) for the secondrespondent

Bala Chandran s/o Kandiah (Mallal & Namazie) for the non-party.

Ayerst (Inspector of Taxes) v C & K (Construction) Ltd [1976] AC 167 (refd)

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Banque des Marchands de Moscou (Koupetschesky) v Kindersley [1951] Ch 112 (refd)

English, Scottish and Australian Chartered Bank, Re [1893] 3 Ch 385 (refd)

Eros Films Ltd, Re [1963] Ch 565 (refd)

FHR European Ventures LLP v Mankarious [2013] EWCA Civ 17 (refd)

HIH Casualty and General Insurance Ltd, Re [2006] 2 All ER 671 (refd)

HIH Casualty and General Insurance Ltd, Re [2007] Bus LR 250; [2007] 1 All ER 177 (refd)

HIH Casualty and General Insurance Ltd, Re [2008] 1 WLR 852 (folld)

Hitachi Plant Engineering & Construction Co Ltd v Eltraco International Pte Ltd [2003] 4 SLR (R) 384; [2003] 4 SLR 384 (refd)

Joo Yee Construction Pte Ltd v Diethelm Industries Pte Ltd [1990] 1 SLR (R) 171; [1990] SLR 278 (refd)

Lee Wah Bank Ltd, Re [1926] MC 5 (refd)

Lister & Co v Stubbs (1890) 45 Ch D 1 (refd)

Ng Wei Teck Michael v Oversea-Chinese Banking Corp Ltd [1998] 1 SLR (R) 778; [1998] 2 SLR 1 (refd)

Power Knight Pte Ltd v Natural Fuel Pte Ltd [2010] 3 SLR 82 (refd)

Rawang Tin Mining Co, Ltd, & The Chartered Bank of India, Australia And China, Re The [1890] Ky 14 (refd)

RBG Resources plc v Credit Lyonnais [2006] 1 SLR (R) 240; [2006] 1 SLR 240 (not folld)

Stein v Blake [1996] AC 243 (refd)

Sumitomo Bank Ltd v Thahir Kartika Ratna [1992] 3 SLR (R) 638; [1993] 1 SLR 735 (refd)

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Tong Aik (Far East) Ltd v Eastern Minerals & Trading (1959) Ltd [1965] 2 MLJ 149 (refd)

Banking Act (Cap 19, 2008 Rev Ed) s 62

Bishop of Singapore Ordinance (Cap 355, 1985 Rev Ed) s 2 (1)

Companies Act (Cap 50, 2006 Rev Ed) ss 350 (2) , 365, 377 (3) (c) , Pt X Div 5 (consd) ; ss 4 (1) , 19 (3) , 130 B, 254 (1) , 272 (2) (j) , 273 (3) , 300, 328, 328 (1) (a) , 350 (1) , 351, 352, 354, 366 (1) , 368, 377 (3) , 377 (4) , 377 (7) , Pt X Divs 1, 2, 3, 4, Pt XI Div 2

Companies Act (Cap 50, 1967 Rev Ed) ss 329, 332

Companies (Amendment) Act 1984 (Act 15 of 1984) s 54

Companies (Amendment) Act 1987 (Act 13 of 1987)

Central Provident Fund Act (Cap 36, 2001 Rev Ed) s 3 (2)

Central Sikh Gurdwara Board Act (Cap 357, 1985 Rev Ed) s 2 (1)

Finance Companies Act (Cap 108, 2011 Rev Ed) s 44 A

Insurance Act (Cap 142, 2002 Rev Ed) s 49 FR

Limited Liability Partnerships Act (Cap 163 A, 2006 Rev Ed) s 4

Minister for Finance (Incorporation) Act (Cap 183, 1985 Rev Ed) s 2 (1)

Payment and Settlement Systems (Finality and Netting) Act (Cap 231, 2003 Rev Ed) Pts II and III

Securities and Futures Act (Cap 289, 2006 Rev Ed) Pt III Div 4

Companies Ordinance (SS Ord No 5 of 1889)

Companies Act 1965 (No 79 of 1965) (M'sia)

Companies Act 1961 (Vic) ss 314 (2) , 344, 346, 352 (3)

Companies Act 1948 (c 38) (UK) ss 404, 406, 407-414, 455

Companies Act 1862 (c 89) (UK) s 133 (1)

Insolvency Act 1986 (c 45) (UK) s 426

Insolvency Rules 1986 (UK) r 4.181

Insolvency Law—Cross-border insolvency—Repatriation of assets—Whether Singapore liquidators had power to transmit proceeds realised in Singapore liquidation of foreign company to principal liquidation in foreign country for pari passu distribution amongst worldwide creditors—Whether Singapore liquidators were bound by ring-fencing obligation under s 377 (3) (c) Companies Act (Cap 50, 2006 Rev Ed)—Section 377 (3) (c) Companies Act (Cap 50, 2006 Rev Ed)

Insolvency Law—Cross-border insolvency—Winding up of foreign companies—Whether ancillary liquidation doctrine was part of Singapore insolvency scheme—Whether Divs 1, 2, 4 and 5 of Pt X of Companies Act (Cap 50, 2006 Rev Ed) envisioned ancillary liquidation doctrine—Divisions 1, 2, 4 and 5 of Pt X of Companies Act (Cap 50, 2006 Rev Ed)

Beluga Chartering Gmb H (‘Beluga Chartering’) was a company incorporated in Germany. It had two wholly-owned subsidiaries incorporated in Singapore (‘Singapore Subsidiaries’). Beluga Chartering bore all the operational costs and expenses for the Singapore Subsidiaries from the time of their incorporation.

Winding up proceedings of Beluga Chartering were commenced in Germany on 1 June 2011. On 17 February 2012, the High Court in Singapore wound Beluga Chartering up under Div 5 of Pt X of the Companies Act (Cap 50, 2006 Rev Ed) (‘the Act’) on grounds of insolvency. Two Singapore liquidators were appointed (‘the Singapore Liquidators’). At the time of the winding up, Beluga Chartering's only known asset in Singapore was a sum of US $1,259,647.42. This sum represented a debt of due from a company known as deugro Singapore Pte Ltd to Beluga Chartering (‘deugro Asset’). Beluga Chartering also owed a debt of €502,600 to a Danish company within the same group as deugro Singapore (‘deugro Liability’). The deugro Liability was later assigned to deugro Singapore in a bid to set it off against the deugro Asset.

On 31 March 2011, the Singapore Subsidiaries as joint plaintiffs sued Beluga Chartering for a sum of S$1,415,631.21, representing work done by each of the Singapore Subsidiaries on behalf of Beluga Chartering. The Singapore Subsidiaries secured judgment in default of appearance for the total sum prayed for. In order to ensure that the judgment debt could be satisfied, the Singapore Subsidiaries then sought and obtained from the High Court an injunction prohibiting Beluga Chartering from disposing of its assets in Singapore, including the deugro Asset, up to the sum of the judgment debt (‘the Injunction’). At the same time, the Singapore Subsidiaries obtained a Garnishee Order in respect of the deugro Asset. The Garnishee Order was never made final because it was discharged upon the winding up of Beluga Chartering in Singapore.

With funding from Beluga Chartering cut, the Singapore Subsidiaries were unable to pay their expenses and debts, which included salaries and CPF contributions for their employees in Singapore. The unadjudicated claims against the Singapore Subsidiaries totalled S$1,227,873. Both Singapore Subsidiaries were eventually placed in creditors' voluntary liquidation in September 2011 and January 2012 respectively.

The Singapore Liquidators applied under s 273 (3) of the Act, seeking directions from the High Court permitting them to transmit the deugro Asset, after setting-off the deugro Liability, to the German liquidator (‘the German Liquidator’) for distribution to Beluga Chartering's worldwide creditors in a single insolvency governed by German law. Specifically, the Singapore Liquidators sought the High Court's determination of two questions of law: (a)whether the provisions of Pt X of the Act applied to Beluga Chartering and its Singapore Liquidators without exception or modification, such that the Singapore Liquidators were required to comply with Pt X in the carrying out of their duties; and (b)subject to the determination of issue (a), whether the Singapore Liquidators had the power, either under Pt X of the Act or the general law, to repatriate Beluga Chartering's assets in Singapore to the German Liquidator, to be administered in accordance with German law, notwithstanding the existence of unsatisfied judgment debts against Beluga Chartering incurred in Singapore. The Singapore Liquidators also sought an order directing the discharge of the Injunction such that the deugro Asset could be applied to the payments ordered by the High Court pursuant to the liquidation in Singapore.

Held, answering the first question in the affirmative and stating, in respect of the second question, that the Singapore Liquidators have an obligation under s 377 (3) (c)of the Act to repatriate Beluga Chartering's assets in Singapore to the German Liquidator, subject to the qualifications in that section:

(1) Singapore's statutory insolvency scheme derived many fundamental features from English legislation and common law. This included the English common law principle of ancillary liquidation. The ancillary liquidation doctrine was introduced into Singapore law in 1926 and remained a part of Singapore's insolvency scheme as confirmed in RBG Resources plc v Credit Lyonnais[2006] 1 SLR (R) 240 (‘RBG’): at [41] .

(2) Divisions 1, 2 and 4 of Pt X of the Act envisioned every Singapore liquidator of a Singapore company to be a worldwide liquidator with worldwide duties and powers. Likewise, Div 5 of Pt X of the Act envisioned the Singapore liquidation of a foreign company to be the only liquidation. None of these divisions expressly or impliedly enacted the ancillary liquidation doctrine, restricted the territorial scope of the liquidator's duties, or provided a mechanism for determining whether, when and to what extent the Singapore liquidator would prevail over or defer to any ancillary foreign liquidator of either the Singapore or foreign company: at [68] , [69] and [80] to [83] .

(3) Division 5 of Pt X of the Act governed the winding up of every foreign company, regardless of whether it was carrying on business in Singapore, had a place of business in Singapore, or had registered under s 368 of the Act. The relevant registration which removed a legal entity from the scope of the term ‘unregistered company’ used in s 350 (1) of the Act was registration under s 19 (3) of the Act and not registration under s 368 of the Act: at [86] .

(4) Unlike the provisions...

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5 cases
  • Beluga Chartering Gmb H v Beluga Projects (Singapore) Pte Ltd
    • Singapore
    • Court of Three Judges (Singapore)
    • 26 February 2014
    ...(refd) Banque Indosuez SA v Ferromet Resources Inc [1993] BCLC 112 (refd) Beluga Chartering Gmb H v Beluga Projects (Singapore) Pte Ltd [2013] 2 SLR 1035 (refd) Cambridge Gas Transportation Corp v Official Committee of Unsecured Creditors of Navigator Holdings plc [2007] 1 AC 508 (refd) CCI......
  • Re Guangdong International Trust & Investment Corporation Hong Kong (Holdings) Ltd (In Creditors’ Voluntary Liquidation
    • Hong Kong
    • High Court (Hong Kong)
    • 10 October 2018
    ...UKPC 26; [2007] 1 AC 508 at [14]–[15]. [6] [2011] NSWCA 168; (2011) 81 NSWLR 285. [7] Beluga Chartering v Beluga Projects (Singapore) [2013] SGHC 60; [2013] 2 SLR 1035 at [167]; reversed on other grounds,[2014] SGCA 14; [2014] 2 SLR [8] Sweet and Maxwell, 2016. [9] Re Bank of Credit and Com......
  • Beluga Chartering GmbH (in liquidation) and others v Beluga Projects (Singapore) Pte Ltd (in liquidation) and another(deugro (Singapore) Pte Ltd, non-party)
    • Singapore
    • Court of Three Judges (Singapore)
    • 26 February 2014
    ...GmbH (in liquidation) v Beluga Projects (Singapore) Pte Ltd (in liquidation) and another (Deugro (Singapore) Pte Ltd, non-party) [2013] 2 SLR 1035 (“the GD”) After hearing the parties and the amicus curiae Professor Yeo Tiong Min SC (“Prof Yeo”), we allowed the appeal and held that s 377(3)......
  • Seah Teong Kang v Seah Yong Chwan
    • Singapore
    • Court of Three Judges (Singapore)
    • 10 September 2015
    ...LLP) for the respondent. Atwell v Roberts [2013] WASCA 37 (refd) Beluga Chartering Gmb H v Beluga Projects (Singapore) Pte Ltd [2013] 2 SLR 1035, HC (refd) Beluga Chartering Gmb H v Beluga Projects (Singapore) Pte Ltd [2014] 2 SLR 815, CA (refd) Bryen v Reus (1960) 61 SR (NSW) 396 (refd) Co......
  • Request a trial to view additional results
2 books & journal articles
  • CROSS-BORDER INSOLVENCY AND ITS IMPACT ON ARBITRATION
    • Singapore
    • Singapore Academy of Law Journal Nbr. 2014, December 2014
    • 1 December 2014
    ...v Beluga Projects (Singapore) Pte Ltd[2014] 2 SLR 815 at [87]. 70 For example, s 227B(2) of the Companies Act (Cap 50, 2006 Rev Ed). 71[2013] 2 SLR 1035 at [66]. See also Ian Fletcher, The Law of Insolvency (Sweet & Maxwell, 4th Ed, 2009) at para 30–042, where the learned author said: As a ......
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2013, December 2013
    • 1 December 2013
    ...733 (on the nature of the statutory trust when a company is wound up); and Beluga Chartering GmbH v Beluga Projects (Singapore) Pte Ltd[2013] 2 SLR 1035 (HC), [2014] 2 SLR 815 (CA) (on cross-border insolvency). Bankruptcy Stay of proceedings 17.2 In Chimbusco International Petroleum (Singap......

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