United Securities Sdn Bhd (in receivership and liquidation) and another v United Overseas Bank Ltd
Judge | Judith Prakash JCA |
Judgment Date | 10 August 2021 |
Neutral Citation | [2021] SGCA 78 |
Citation | [2021] SGCA 78 |
Defendant Counsel | Lee Eng Beng SC and Cheong Tian Ci Torsten (Rajah & Tann Singapore LLP) |
Hearing Date | 07 May 2021 |
Plaintiff Counsel | Abraham Vergis SC (Providence Law Asia LLC) (instructed), Suresh s/o Damodara, Ong Ziying Clement, Lim Qiu'en and Ning Jie (Damodara Ong LLC) |
Docket Number | Civil Appeal No 10 of 2021 |
Published date | 13 August 2021 |
Court | Court of Appeal (Singapore) |
Subject Matter | Insolvency Law,Cross-border insolvency,Stay of proceedings,Recognition of foreign insolvency proceedings |
This appeal arose from a set of parallel proceedings in Singapore and Malaysia which concerned the issue of the respondent’s and the first appellant’s respective rights and obligations under a loan agreement and deed of debenture. Whereas the respondent is seeking to have the issue determined in Singapore, the appellants seek to have it determined in Malaysia.
As part of the appellants’ efforts to halt the Singapore proceedings, they applied to the Singapore High Court for recognition of certain Malaysian proceedings under the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency (30 May 1997) (“the Model Law”), given the force of law in Singapore via s 252 of the Insolvency, Restructuring and Dissolution Act (Act 40 of 2018) (“IRDA”). For convenience, we shall refer to the Model Law as enacted in Singapore as “the SG Model Law”. The appellants contended that upon recognition of the Malaysian Proceedings as either a “foreign main proceeding” or a “foreign non-main proceeding” pursuant to the SG Model Law there should be a stay of the Singapore proceeding. In his oral grounds of decision rendered on 12 January 2021, the High Court Judge (“the Judge”) recognised one of the Malaysian proceedings as being a “foreign main proceeding” covered by the SG Model Law, but nevertheless declined to grant a stay of the Singapore proceeding. Dissatisfied, the appellants appealed against the Judge’s decision.
We heard and dismissed the appeal on 7 May 2021. As the principles applicable to recognition of foreign proceedings under the SG Model Law and the effects of such recognition have not been fully explored in local jurisprudence, this appeal afforded us an opportunity to consider such principles, having regard to the UNCITRAL authorities, textbooks, as well as foreign case law.
The Model Law Before we go on to discuss the facts and issues in this appeal, it may be helpful to make some brief comments on the Model Law. The account that follows is a paraphrase of the account in
The Model Law was developed by UNCITRAL and endorsed by the General Assembly of the United Nations in 1997. The Model Law does not lay down any substantive principles of insolvency law; those are governed by the domestic laws of the individual jurisdictions. Instead, it provides procedural mechanisms to facilitate more efficient disposition of cases in which the insolvent debtor has assets or debts in more than one jurisdiction. The SG Model Law therefore gives effect to four principles:
Most relevant for present purposes are the recognition principle and the relief principle. These prescribe the circumstances in which insolvency proceedings in a foreign jurisdiction should be recognised by Singapore courts and be given effect to by the imposition of a stay of local proceedings against the debtor in question. Such recognition is only given to those proceedings which qualify as a “foreign main proceeding” or a “foreign non-main proceeding”. The definitions of these terms as set out in Art 2 of the SG Model Law are set out below:
For the purposes of this Law —
…- ‘foreign main proceeding’ means a foreign proceeding taking place in the State where the debtor has its centre of main interests;
- ‘foreign non-main proceeding’ means a foreign proceeding, other than a foreign main proceeding, taking place in a State where the debtor has an establishment;
- ‘foreign proceeding’ means a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, under a law relating to insolvency or adjustment or debt in which proceeding the property and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation;
…
Once the court holds that the relevant foreign proceeding meets either of these definitions, then the provisions of Arts 20 and 21 of the SG Model Law come into play. Articles 20 and 21 read:
and the provisions of paragraph 1 of this Article are to be interpreted accordingly.
being a right which would have been exercisable if the debtor had been made the subject of a winding up order under this Act.
To continue reading
Request your trial-
Re PT Garuda Indonesia (Persero) Tbk and another matter
...of reorganisation or liquidation. In United Securities Sdn Bhd (in receivership and liquidation) and another v United Overseas Bank Ltd [2021] 2 SLR 950 (“United Securities”), the Court of Appeal recognised (at [53]) that the following cumulative requirements must be satisfied for a proceed......
-
Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd
...as follows: The Court of Appeal in United Securities Sdn Bhd (in receivership and liquidation) and another v United Overseas Bank Ltd [2021] 2 SLR 950 (“United Securities”) had implicitly affirmed in obiter that the relevant foreign law under Art 2(h) of the SG Model Law must be one which d......
-
Insolvency Law
...adopted at the United Nations General Assembly, 52nd Session (30 January 1998). See United Securities Sdn Bhd v United Overseas Bank Ltd [2021] 2 SLR 950. 4 Re DSG Asia Holdings Pte Ltd [2021] SGHC 209. 5 Lim Siew Soo v Sembawang Engineers and Constructors Pte Ltd [2021] 4 SLR 556. 6 The Oc......