Re Sembawang Engineers and Constructors Pte Ltd

• Jurisdiction: Singapore
• Court: High Court (Singapore)
• Judge: Aedit Abdullah JC
• Judgment Date: 23 September 2015
• Neutral Citation: [2015] SGHC 250
• Citation: [2015] SGHC 250
• Plaintiff Counsel: Patrick Ang, Low Poh Ling and Chew Xiang (Rajah & Tann Singapore LLP)
• Defendant Counsel: Jonathan Tang (Wongpartnership LLP)
• Date: 23 September 2015
• Subject Matter: Schemes of arrangement,Companies
• Published date: 04 November 2015
• Hearing Date: 18 September 2015
• Docket Number: Originating Summons No 859 of 2015

Aedit Abdullah JC [delivering the oral judgment]:

I made a number of brief oral remarks when conveying my decision on an application under s 210(1) of the Companies Act (Cap 50, 2006 Rev Ed) (“the Companies Act”) by Sembawang Engineers and Constructors Pte Ltd (“the Company”) for it to be granted liberty to convene a meeting with its creditors, within six months or such other extended period ordered by the court, for the purpose of considering and, if thought fit, approving with or without modification a scheme of arrangement proposed to be made between the Company and its creditors (the “Proposed Scheme”). My remarks are set out below.

While an application of this nature is normally heard ex parte, a number of creditors of the Company as well as its related entity, Punj Lloyd Pte Limited, were present in court as this application was scheduled together with other winding-up applications, and several of them had been informed of the application. Three of the creditors had also presented applications to wind-up the Company. These applications were scheduled for hearing before me on the same day. Counsel for Rigel Technology (S) Pte Ltd (“Rigel”), one of the creditors applying for the Company to be wound-up, opposed the Company’s s 210(1) application.

In written submissions, which were well prepared despite the lack of time, Rigel argued that the Company’s Proposed Scheme was lacking in details and that the Proposed Scheme was not likely to be approved by the court given its lack of specificity. It also pointed out that some of the measures in the Proposed Scheme were conditional upon Punj Lloyd Pte Ltd and Punj Lloyd Ltd (the Company’s ultimate India incorporated holding company) carrying out certain actions or securing relevant approvals which were matters that the creditors of the Company had no control over. It was also argued that the application should be refused as the Company was hopelessly insolvent: Re Pheon Pty Ltd (1986) 11 ACLR 142. It was suggested that insolvency was to be measured in the commercial sense – ie, the inability to meet current demands: Sri Hartamas Development Sdn Bhd v MBf Finance Bhd [1990] 2 MLJ 31. It was argued that the company was hopelessly insolvent as there was a clear shortfall to meet current demands. The winding-up applications against the Company were also cited as reasons to refuse the application, as was also the lack of any assurance that the Company could continue as a going concern.

In oral...