The Royal Bank of Scotland NV v TT International Ltd

JurisdictionSingapore
CourtCourt of Three Judges (Singapore)
Judgment Date31 January 2012
Date31 January 2012
Docket NumberCivil Appeals Nos 44 and 47 of 2010

Court of Appeal

Chan Sek Keong CJ

,

Andrew Phang Boon Leong JA

and

V K Rajah JA

Civil Appeals Nos 44 and 47 of 2010

The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others
Plaintiff
and
TT International Ltd and another appeal
Defendant

Lee Eng Beng SC, Low Poh Ling, Nigel Pereira and Raelene Pereira (Rajah & Tann LLP) for the fourth appellant in CA 44/2010;

Thio Shen Yi SC (TSMP Law Corporation), Doris Chia and Aveline Chan (David Lim & Partners) for the appellant in CA 47/2010;

Alvin Yeo SC, Chang Man Phing, Tan Yee Siong and Lawrence Foo (Wong Partnership LLP) for the respondent in both appeals.

Bacnet Pty Ltd v Lift Capital Partners Pty Ltd (in liquidation) [2010] FCAFC 36 (folld)

Brash Holdings Ltd (Administrator appointed) v Katile Pty Ltd [1996] 1 VR 24 (refd)

British Aviation Insurance Co Ltd, Re The [2006] BCC 14; [2006] 1 BCLC 665 (refd)

BTR plc, Re [1999] 2 BCLC 675 (refd)

BTR plc, Re [2000] 1 BCLC 740 (refd)

Daewoo Singapore Pte Ltd v CEL Tractors Pte Ltd [2001] 2 SLR (R) 791; [2001] 4 SLR 35 (folld)

Dorman, Long and Co Ltd, Re [1934] Ch 635 (folld)

Econ Corp Ltd, Re [2004] 1 SLR (R) 273; [2004] 1 SLR 273 (refd)

ERPIMA SA v Chee Yoh Chuang [1997] 1 SLR (R) 923; [1998] 1 SLR 83 (refd)

Fustar Chemicals Ltd (Hong Kong) v Liquidator of Fustar Chemicals Pte Ltd [2009] 4 SLR (R) 458; [2009] 4 SLR 458 (folld)

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Hawk Insurance Co Ltd, Re [2001] 2 BCLC 480 (folld)

Hellenic & General Trust Ltd, Re [1976] 1 WLR 123 (distd)

Horizon Knowledge Solutions Pte Ltd, Re [2004] SGHC 270 (refd)

Landmark Corp Ltd, Re [1968] 1 NSWR 759 (folld)

Milverton Group Ltd v Warner World Ltd [1995] 2 EGLR 28 (folld)

Ng Huat Foundations Pte Ltd, Re [2005] SGHC 112 (folld)

Norfolk Island And Byron Bay Whaling Co Ltd, Re (1969) 90 WN (Pt 1) (NSW) 351 (refd)

Oriental Insurance Co Ltd, The v Reliance National Asia Re Pte Ltd [2008] 3 SLR (R) 121; [2008] 3 SLR 121 (folld)

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Telewest Communications plc, Re [2005] BCC 29, CA (refd)

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Bankruptcy Act (Cap 20, 2000 Rev Ed)

Bankruptcy Rules (Cap 20, R 1, 2006 Rev Ed) rr 179, 198, 201

Companies Act (Cap 50, 2006 Rev Ed) ss 210, 210 (1) , 210 (3) , 250 (1) (g) (consd) ; ss 210 (4) , 210 (5) , 211, 327 (1)

Companies Regulations (Cap 50, Rg 1, 1990 Rev Ed) regs 72, 75 (consd) ; regs 79, 80, 82

Companies (Winding Up) Rules (Cap 50, R 1, 2006 Rev Ed) r 93 (consd) ; rr 92, 95, 124, 128

Companies Act 1961 (NSW) s 181

Companies Act 1985 (c 6) (UK) s 425 (consd)

Companies Act 2006 (c 46) (UK) s 895

Corporations Act 2001 (Cth) s 411

Corporations Regulations 2001 (Cth) regs 5.6.23, 5.6.23 (2) , 5.6.26, 5.6.11 (2)

Joint Stock Companies Arrangement Act 1870 (c 104) (UK) s 2

Insolvency Act 1986 (c 45) (UK) s 210

Insolvency Rules 1986 (SI 1986 No 1925) (UK) r 4.79

Companies—Schemes of arrangement—Classification of scheme creditors—Whether and when scheme creditors should be classified separately for voting purposes—Whether contingent creditors and/or related party creditors (subsidiaries or substantial shareholders of company) should be classified separately for voting purposes—Section 210 Companies Act (Cap 50, 2006 Rev Ed)

Companies—Schemes of arrangement—Classification of scheme creditors—Whether issues of creditors' classification should be considered by court at application stage—Section 210 Companies Act (Cap 50, 2006 Rev Ed)

Companies—Schemes of arrangement—Creditors' proofs of debt—Proposed scheme manager completing adjudication of proofs of debt after creditors voted—Opposing scheme creditors being denied access to relevant proofs of debt—Whether scheme creditors were entitled to examine proofs of debt submitted by other scheme creditors—Whether scheme creditors should be notified of admission or rejection of proofs of debtbefore casting votes at creditors' meeting—Whether scheme creditors might appeal proposed scheme manager's decisions to admit or reject its own and other creditors' proofs of debt—Section 210 Companies Act (Cap 50, 2006 Rev Ed)

Companies—Schemes of arrangement—Discounting of creditors' votes—Whether votes of related party creditors and contingent creditors should be discounted—Section 210 Companies Act (Cap 50, 2006 Rev Ed)

Companies—Schemes of arrangement—Scheme manager's duties—Proposed scheme manager concurrently acting for chairman and executive director of Company—Whether and to what extent a proposed scheme manager had to act objectively and transparently—Whether a proposed scheme manager might be placed in position of conflict of interest—Section 210 Companies Act (Cap 50, 2006 Rev Ed)

TT International Limited (‘the Company’) was incorporated in Singapore and was listed on the Main Board of the Singapore Exchange Securities Trading Limited in June 2000. The financial crisis in 2008 significantly affected the Company's business. Its financial position became precarious when some bank creditors' recalled their facilities and demanded prompt repayment of the sums due. On 31 October 2008, the Company appointed nTan Corporate Advisory Pte Ltd as an independent financial advisor and announced in an informal creditors' meeting that it would be implementing a scheme of arrangement (‘the Scheme’).

On 29 January 2009, the Company applied for and received approval from the court pursuant to s 210 (1) of the Companies Act (Cap 50, 2006 Rev Ed) (‘the Act’) to summon a meeting of its creditors to propose the Scheme. In the ensuing months, the key terms of the proposed Scheme were the subject of a number of discussions and meetings between the Company and its bank creditors. Despite the stalemate, the Company proposed the Scheme for voting by creditors in September 2009. After the creditors had voted at a creditors' meeting held on 16 October 2009 (‘the Scheme Meeting’), they were informed that the proposed Scheme Manager had not completed the adjudication of the proofs of debt. At a much later date, 17 December 2009, the proposed scheme manager reported that the Scheme had been passed by a majority of creditors representing 75.06% in value, barely exceeding the statutory threshold (of 75%). The proposed scheme manager was also concurrently the nominee for the individual voluntary arrangements filed by the chairman and an executive director (who was the chairman's wife) of the Company.

The events above prompted the opposing scheme creditors (‘the Opposing Creditors’) to seek copies of the proofs of debt lodged by certain scheme creditors and other information regarding the other scheme creditors' claims. The Company provided some information on a ‘goodwill basis’ but the proposed scheme manager was adamant that access to the relevant proofs could and would not be given to the Opposing Creditors. Dissatisfied with the adjudication of several proofs of debt as well as the Company's response to their information requests, the Opposing Creditors objected to the Scheme on various grounds.

In the High Court, the Judge disagreed with the Opposing Creditors' arguments and approved the Scheme. The Judge held that contingent creditors and related creditors (subsidiaries or substantial shareholders of the Company) were entitled to vote in the same class as other unsecured scheme creditors. The Judge also systematically dismissed objections raised by the Opposing Creditors against the proposed scheme manager's admission or rejection of specific proofs of debt. Finally, the Judge held that the Company need not provide supporting documentation for each proof of debt whenever the same was requested by any opposing creditor. The Opposing Creditors appealed to the Court of Appeal.

Held, allowing the appeal:

(1) A court should consider issues of creditors' classification when hearing the initial application for an order to summon the scheme creditors' meeting (s), rather than at the subsequent application for the court's sanction of the scheme. The application for an order to summon the scheme creditors' meeting was to be made on an expedited basis,and a company had to unreservedly disclose all material informationto the court to assist it in arriving at a properly considered determination on how the scheme creditors' meeting was to be conducted: at [62].

(2) A proposed scheme manager had to act transparently and objectively. He would be in a position of conflict of interest if he aligned his interests with those of the company without good reason. On the facts, the proposed scheme manager was conflicted because he was also the nominee for the individual voluntary arrangements filed by the chairman of the Company and his wife, an executive director: at [71] and [78].

(3) A scheme creditor was entitled to examine the proofs of debt submitted by other scheme creditors in respect of a proposed scheme, as long as the information sought was relevant to his voting rights. The scheme creditor would thus be entitled to access only if he had produced prima facie evidence of impropriety in the admission or rejection of the proofs of debt: at [93].

(4) A scheme creditor had to be notified of the proposed scheme manager's decisions to admit or reject its own and other creditors' proofs of debtbefore...

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21 cases
  • The Royal Bank of Scotland NV v TT International Ltd
    • Singapore
    • Court of Three Judges (Singapore)
    • 27 September 2012
    ...NV, Re [1994] 1 BCLC 667 (refd) Pheon Pty Ltd, Re (1986) 11 ACLR 142 (refd) Royal Bank of Scotland NV, The v TT International Ltd [2012] 2 SLR 213 (folld) Wah Yuen Electrical Engineering Pte Ltd v Singapore Cables Manufacturers Pte Ltd [2003] 3 SLR (R) 629; [2003] 3 SLR 629 (folld) Companie......
  • The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd (nTan Corporate Advisory Pte Ltd and others, other parties) and another appeal
    • Singapore
    • Court of Three Judges (Singapore)
    • 30 September 2015
    ...(see The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another appeal [2012] 2 SLR 213 (“The Royal Bank of Scotland v TT International”)). In setting aside the Scheme, the CA gave a number of directions, including a direction that a fur......
  • Re Pacific Andes Resources Development Ltd and other matters
    • Singapore
    • High Court (Singapore)
    • 27 September 2016
    ...Ltd, Re [2015] SGHC 321 (refd) Rodenstock GmbH, Re [2011] EWHC 1104 (Ch) (refd) Royal Bank of Scotland NV, The v TT International Ltd [2012] 2 SLR 213 (refd) Sea Assets Ltd v Perusahaan Perseroan (Persero) PT Perusahaan Penerbangan Garuda Indonesia [2001] EWCA Civ 1696 (refd) Societe Nation......
  • Re Swiber Holdings Ltd
    • Singapore
    • High Court (Singapore)
    • 1 October 2018
    ...of Appeal in The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another appeal [2012] 2 SLR 213 (“TT International”) at [70]. Chao JA went on to discuss Re PCCW and Re Dee Valley, and added at [78] that “the general concern with vote-spl......
  • Request a trial to view additional results
5 books & journal articles
  • DOES JUDICIAL MANAGEMENT IN MALAYSIA SUFFICIENTLY EMBODY A RESCUE CULTURE?
    • Singapore
    • Singapore Academy of Law Journal Nbr. 2020, December 2020
    • 1 December 2020
    ...[2018] 10 CLJ 412 at [42]–[43]. 38 Leadmont Development Sdn Bhd v Infra Segi Sdn Bhd [2019] 8 MLJ 473; [2018] 10 CLJ 412 at [104]. 39 [2012] 2 SLR 213. The “no realistic prospect” and “the court should not act in vain” approach laid down in Re TT International was reiterated by the Singapor......
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2015, December 2015
    • 1 December 2015
    ...decision here focused on the duty to disclose. The judge endorsed the approach in The Royal Bank of Scotland NV v TT International Ltd[2012] 2 SLR 213, holding that an applicant under s 210(1) has the duty to disclose all material information for the court to make a considered determination......
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2016, December 2016
    • 1 December 2016
    ...of the learned judge writing extrajudicially. 70 Pacific Andes Resources Development Ltd [2016] SGHC 210 at [63]. 71 [1962] VR 252. 72 [2012] 2 SLR 213. 73 The Royal Bank of Scotland NV v TT International [2012] 2 SLR 213 at [158]. 74 The Royal Bank of Scotland NV v TT International [2012] ......
  • Insolvency Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2012, December 2012
    • 1 December 2012
    ...definition of ‘creditors’ under s 210 of the Companies Act (Cap 50, 2006 Rev Ed); The Royal Bank of Scotland NV v TT International Ltd[2012] 2 SLR 213 (‘The Royal Bank of Scotland NV’) – principles and procedures relating to a scheme of arrangement; and [2012] 4 SLR 1182– remuneration of sc......
  • Request a trial to view additional results

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