The Restructuring Review: Singapore


The first five months of 2020 have seen a global economic downturn, which some have observed to be on a scale not experienced since the Great Depression of the 1930s.2 In April 2020, the International Monetary Fund's World Economic Outlook cut global growth forecasts dramatically to predict a 3 per cent contraction worldwide, including a predicted negative 6 per cent contraction for advanced economies.3 As a small and open economy, Singapore has been no exception to these dramatic changes in the global economic environment. The Singapore economy contracted by 0.7 per cent in the first quarter of 2020 (compared with a growth of 1.0 per cent in the previous quarter), and its 2020 GDP growth forecast has since been revised to –7.0 per cent to –4.0 per cent,4 down from an earlier forecast of –0.5 per cent to 1.5 per cent.5

While the full effects of the above have yet to be observed, it is not surprising in the context of the global economic downturn that 2020 has already seen a significant uptick in restructuring activity in Singapore. We discuss the recent developments in the law.


i Restructuring and insolvency legal framework

In last year's edition, we discussed substantive changes to the existing legal framework to be effected with the passing of the omnibus Insolvency, Restructuring and Dissolution Act in October 2018 (the Insolvency Act), which was originally slated to come into force on a date to be announced in or around the second half of 2019. The new Insolvency Act promised significant deviations from the existing restructuring and insolvency legal framework, particularly in the area of ipso facto clauses in contracts.6 At the time of writing, the Insolvency Act has yet to come into force, and while no confirmed date has been announced, it is now expected to come into force in the second half of 2020. During the interim, the Ministry of Law has been actively taking steps to lay the groundwork for the Insolvency Act coming into force, including conducting a public consultation for certain draft subsidiary legislation to be promulgated under the Insolvency Act in March 2020.7

The main source of legislation in Singapore governing corporate restructuring and insolvency therefore remains the Companies Act, with certain provisions in the Bankruptcy Act imported into the Companies Act with necessary modifications. Both Acts are supplemented by various subsidiary legislation.8 Under the framework, there are three broad areas of court-supervised insolvency and restructuring procedures for companies: schemes of arrangement, judicial management and liquidation.

Schemes of arrangement

Part VII of the Companies Act sets out the statutory framework for schemes of arrangement. A scheme of arrangement is a statutory mechanism for securing agreement between a company and its creditors, members or shareholders in respect of a compromise or arrangement without the need for unanimous consent. Thus, under the scheme, creditors may, for example, agree to rearrange or extinguish debts owed by the company to them in part or in whole, or to defer repayment of the same. The court plays a supervisory role at two key junctures: first, in granting leave for a creditors' meeting to be convened to consider the scheme of arrangement, and second, in sanctioning the scheme of arrangement (which has been approved by the creditors).

A crucial tool is the availability of the statutory moratorium. There are two separate moratorium regimes under the Companies Act: the original moratorium to restrain further proceedings in any action or proceeding against the company;9 and the newer 'enhanced' moratorium introduced in 2017, under which an interim 30-day moratorium arises automatically upon an application being made for a moratorium.10 The enhanced moratorium also restrains secured creditors from enforcing their security,11 can have in personam worldwide effect,12 and can be extended to related companies.13 Recent applications for moratoriums have predominantly been under the enhanced moratorium regime.

Other provisions include the availability of cross-class cramdowns on minority dissenting creditors where the requisite majority is obtained in respect of all creditors as a whole, provided that the scheme does not discriminate unfairly between the classes of creditors and is fair and equitable.14 The court can also approve a pre-packaged scheme where it is satisfied that the requisite majority of creditors would have approved the scheme,15 therefore saving time and costs.

Finally, the court is empowered to confer various levels of 'super-priority' for rescue financing in certain circumstances.16 To obtain an order under Section 211E(1)(a) of the Companies Act, the applicant must show that it has expended reasonable efforts to secure other types of financing without super-priority.17 For an order under Section 211E(1)(b) of the Companies Act, the debtor must demonstrate that reasonable efforts have been undertaken to explore other types of financing without priority status.18 Evidence must be placed before the court of, for example, failed negotiations.19 Other considerations include whether: (1) the proposed financing is in the exercise of sound and reasonable business judgment; (2) alternative financing is available on any other basis; (3) such proposed financing is in the best interests of the creditors; (4) any better proposals are before the court; (5) the proposed financing is necessary to preserve the assets of the estate and is necessary, essential and appropriate for the continued operation of the debtors' business; (6) the terms of the proposed financing are fair, reasonable and adequate; and (7) the financing agreement was negotiated in good faith and at arm's length.20 There is a relative paucity of reported decisions on the principles governing a Singapore court's grant of super-priority financing. At the time of writing, there has only been one reported decision,21 and there have only ever been two successful applications for super-priority financing (discussed further in Section III).

Judicial management

Part VIIIA of the Companies Act sets the statutory framework for judicial management. Judicial management may be utilised where a company is, or is likely to become, unable to pay its debts, either as a tool for corporate rescue or to carry out a more advantageous realisation of a company's assets than would be possible in a winding up. In judicial management, a judicial manager, who is appointed to replace the company's existing management, is empowered to do all such things as may be necessary for the management of the affairs, business and property of the company. After a judicial management order is made, the judicial manager will formulate a statement of proposals for the rehabilitation of the company or the realisation of its assets, which must be approved by the company's creditors.22

A statutory moratorium arises automatically upon an application being made for judicial management,23 which is extended upon the making of a judicial management order.24 As in the scheme of arrangement enhanced moratorium, the judicial management moratorium restrains secured creditors from enforcing their security. Super-priority in rescue financing is also available in the judicial management regime.25


Under the Companies Act, a company may be wound up compulsorily by the court or voluntarily.26 In a compulsory liquidation, parties with standing under the Companies Act, including creditors of a company,27 may apply to the court for an order that a company be wound up.

The Companies Act provides a list of grounds upon which the court may make an order to wind up a company,28 including that the company is 'unable to pay its debts'.29 A statutory presumption that the company is unable to pay its debts arises if (1) a statutory demand for a sum exceeding S$10,000 has been duly issued to the company and the company for three weeks thereafter neglects to pay the sum or to secure or compound for it to the creditor's reasonable satisfaction, the company is deemed to be unable to pay its debts;30 or (2) if an execution or other process issued on a judgment of any court against the company is returned unsatisfied in whole or in part, the company is also deemed to be unable to pay its debts.31

The creditor can also prove that the company is unable to pay its debts (including contingent and prospective debts, if any).32 In general, courts typically deploy two tests – the 'cash-flow' test (i.e., the company is unable to pay its debts as they fall due) and the 'balance-sheet' test (i.e., the company's liabilities, including contingent and prospective liabilities, exceed its assets). All evidence that may appear relevant to the question of insolvency will be considered.33

The court may make an order to stay or restrain further proceedings against the company (including the enforcement of security) at any time after the making of a winding-up application.34 Further, upon the winding-up order being made, no action or proceeding shall be commenced without the leave of the court.35

In a voluntary liquidation, the court need not get involved. There are two types of voluntary liquidation – a creditors' voluntary liquidation (CVL) and a members' voluntary liquidation (MVL). As a matter of procedure, both CVL and MVL are commenced by the company resolving by special resolution (i.e., by a majority of not less than three-quarters) that it be wound up voluntarily.36 If the company's directors are able to make a declaration that the company will be able to pay its debts in full within a period not exceeding 12 months from the commencement of winding up, the liquidation begins as an MVL.37 If not, the liquidation begins as a CVL. A key difference between the two is that in a CVL, the company must convene a meeting of creditors,38 where the creditors will be able to nominate a liquidator that will prevail over the company's nomination.39

ii Statutory avoidance provisions and clawback

Any disposal of the company's property made after the commencement of winding up is void,40 though the court can prospectively or retrospectively validate such disposal.41

Additionally, certain transactions entered into by the company prior to the commencement of liquidation may be void or voidable. An 'unfair preference', which is a transaction that has the effect of putting a creditor in a better position than the creditor would otherwise have been in the event of the company's insolvency had the preference not been given, may be set aside if the transaction was entered into in the six months preceding the commencement of winding up.42 Where the person preferred is a 'person connected with the company' (including directors of the company), this period is two years. An unfair preference must have been made with the intention to prefer – an intention that is presumed if the transaction is entered into with a person connected with the company.

An 'undervalue transaction', including transactions that were entered into for no consideration, or for a value of which (in money or money's worth) is significantly less than the value (in money or money's worth) of the consideration provided, may be set aside if entered into within the five years preceding the commencement of winding up.43 However, the transaction will not be set aside if it is proven that the transaction was entered into in good faith for the purpose of carrying on the company's business, and there were reasonable grounds for believing that the transaction would benefit the company.44

A floating charge entered into within six months of the commencement of the winding up is valid to the extent of any cash paid to the company in consideration for the charge, unless it is proven that the company was solvent immediately after the creation of the charge.45

The above applies similarly in judicial management, with the necessary modifications.46

iii The position of secured creditors

When entering into a loan transaction with a company that is insolvent or near insolvency, secured creditors should be mindful of the statutory avoidance provisions discussed in Section II.ii.

Further, any creditor intending to secure the debt with a floating charge should take care to ensure that the floating charge is registered within 30 days of its creation, failing which the floating charge is void as against a liquidator and any creditor of the company.47 This requirement was considered by the Singapore court recently, where the Court found, on the application of a liquidator of a Singapore company, that a floating charge was void for lack of registration.48 It is not sufficient for lenders to merely obtain the agreement of the borrower to grant security – the onus lies on the secured lender to take the necessary steps for the creation, validity and perfection of their security interests (including, where applicable, registration of a floating charge).

The moratoria that apply to restrain the enforcement of security in schemes of arrangement, judicial management and liquidation are discussed in Section II.i.

As to the ranking of creditors in distribution, a creditor with a registered floating charge is subordinated to a creditor with a fixed charge and certain statutory preferential debts, but ranks ahead of unsecured creditors.49

In BP Singapore Pte Ltd v. Jurong Aromatics Corp Pte Ltd (receivers and managers appointed) and others and another appeal [2020] SGCA 9, a question arose as to whether, when a company in receivership is wound up, its trading partners can set off debts they incurred to the company against unsecured debts that the company incurred to them before the company entered into receivership. There, the company's secured lenders had a floating charge over, inter alia, the company's undertaking and assets, including all present and future book debts. The secured lenders enforced their security by appointing receivers and managers over the company's assets, thus crystallising the floating charge. The receivers and managers then continued the company's business under interim tolling agreements. Under these tolling agreements, the company's trading partners were entitled to use the company's plant to process feedstock (supplied by the trading partners) into aromatics and petroleum products which they could sell. In exchange, the company was paid a monthly tolling fee by the trading partners for use of the plant. The company was later wound up, and the trading partners attempted to set off their post-receivership indebtedness to the company arising from the tolling agreements, against debts that the company had incurred to them pre-receivership. The Singapore Court of Appeal held that, in the absence of clear evidence, there was no decrystallisation of the lenders' security, as the lenders had not relinquished control over the receivables that arose during the receivership, and as soon as they arose, the receivables became subject to the crystallised floating charge. Hence, insolvency set-off was not applicable. The Court left open the possibility that such control may be relinquished without the express consent of the secured lender (e.g., where the company trades with an unsecured creditor who has no knowledge that the company is in receivership). The Court also found that equitable set-off did not arise because it had not been shown that there was close connection between the debts sought to be set-off, or that it would be manifestly unjust not to allow such set-off.

iv Directors' duties in insolvency

A director is under a duty to act honestly and use reasonable diligence.50 Where the company is insolvent or near insolvency, directors must additionally take into account the interests of the company's creditors to ensure the company's assets are not dissipated.51 As long as there are reasons to be concerned that the creditors' interests are or will be at risk, directors ought to have due regard to their interests.52

A director who is knowingly a party to the company contracting a debt of which there was no reasonable or probable ground or expectation that the company would be able to pay off such debt could be convicted of a criminal offence.53 Any person who has been convicted for insolvent trading may also be held personally liable for the repayment of that debt.54

Any person who has been found to have been knowingly party to the company carrying on business with the intent to defraud creditors or for a fraudulent purpose may be held personally liable for all the company's debts and liabilities,55 and guilty of a criminal offence of fraudulent trading.56

Further, while the statutory avoidance provisions discussed in Section II.ii are not per se expressed to impose duties on directors, a director would likely be liable for a breach of fiduciary duties where there has been an adverse finding under the statutory avoidance.57 Claims for breaches of common law fiduciary duties may be brought, notwithstanding that the relevant time limit under statutory avoidance provisions has passed.58


i Temporary relief to restructuring and insolvency legal framework in response to covid-19 outbreak

Singapore has enacted interim provisions intended to address and mitigate certain economic and social consequences arising from the ongoing global covid-19 outbreak. One such measure was the covid-19 (Temporary Measures) Act 2020 (the Covid-19 Act), which was enacted in April 2020, and included temporary relief measures in respect of a party's inability to perform certain categories of contracts, and for financially distressed businesses and individuals. These temporary relief measures are to be in place for the prescribed period of six months (which may be extended or shortened by the Minister).59

First, the Covid-19 Act provides temporary relief during the prescribed period for the inability to perform 'scheduled contracts'60 entered into before 25 March 2020,61 where such obligation was to be performed on or after 1 February 2020.62 The party seeking relief must show that the inability to perform an obligation under the scheduled contract is to a material extent caused by a covid-19 event (defined as covid-19 or the operation of or compliance with the law, order or direction of Singapore or any other country made by reason of or in connection with covid-19).63

Second, the Covid-19 Act also provides temporary relief for financially distressed firms and businesses for the prescribed period, which modifies the existing framework for insolvency. For the purposes of Section 254(2)(a) of the Companies Act, a Singapore company will only be deemed to be unable to pay its debts if a creditor serves a statutory demand in a sum exceeding S$100,000 (an increase from the usual threshold of S$15,000), and the company neglects to pay the sum or secure or compound for it to the reasonable satisfaction of the creditor within six months (an increase from the usual period of 21 days).64

Third, the Covid-19 Act also provides that, for the purposes of the liability for insolvent trading under Section 339(3) of the Companies Act (discussed above), an officer may have a defence if the debt is incurred: (1) in the ordinary course of the company's business, (2) during the prescribed period and (3) before the appointment of a judicial manager or liquidator.65 Officers remain liable for the offence of fraudulent trading (as discussed above).

Apart from the above, subsidiary legislation has been introduced under Part 4 of the Covid-19 Act on alternative arrangements for meetings of creditors that arise in connection with winding up or judicial management.66

ii Case law

Factors that a Singapore court will consider in recognising foreign insolvency proceedings

In 2017, Singapore adopted the UNCITRAL Model Law on Cross-Border Insolvency (the UNCITRAL Model Law), with certain modifications under the Tenth Schedule of the Companies Act (the Singapore Model Law). The Singapore Model Law empowers Singapore courts to recognise foreign main proceedings or foreign non-main proceedings, and grant relief in aid of the recognised foreign main or non-main proceeding. The classification of a foreign proceeding as main or non-main affects the types of relief that may be granted in aid of such proceeding – in particular, relief for foreign main proceedings arises automatically, whereas an application must be made for relief for foreign non-main proceedings, and such applications are subject to the court's discretion.

The High Court in Re Rooftop Group International Pte Ltd and another (Triumphant Gold Ltd and another, nonparties) [2019] SGHC 280 (Re Rooftop) discussed and applied the factors discussed in Re: Zetta Jet Pte Ltd and others (Asia Aviation Holdings Pte Ltd, intervener) [2019] SGHC 53 (Re Zetta Jet (No. 2)),67 in determining the company's centre of main interests (COMI) under Singapore's Model Law. The Court considered that under Singapore's Model Law, there was a presumption in favour of Singapore since the company was incorporated in Singapore. The Court also considered certain factors pointing to the United States as the COMI, including the fact that the foreign representative appointed in US bankruptcy proceedings was a US citizen, and the fact that the company's sales and main assets were in the US, but held that these were insufficient to displace the presumption, as these factors were not the sort of factors that weighed heavily in a creditor's mind. Among other things, the Court noted that the company had not made the representation that it was a US-based entity, nor were its creditors generally located in the US. The Court accordingly granted recognition to the US Chapter 11 proceedings as a foreign non-main proceeding.

In relation to the type of appropriate relief to be granted in aid of a foreign non-main proceeding, the Court in Re Rooftop held that, in the absence of overriding interests in the jurisdiction (such as societal concerns or employee rights), the general inclination of the Court would be to grant such orders to assist the foreign representative in the performance of his or her functions to the same degree and extent as would be granted to a local insolvency representative. Therefore, the Court rejected the applicant's argument that relief ought to be granted in the form of a moratorium preventing the transfer of shares in the company on the basis of s 259 of the Companies Act, which provides that any transfer of shares after the commencement of winding up shall be void, finding that this was not an 'appropriate relief' to be granted. The Court observed that the rationale for granting assistance under the Singapore Model Law was to aid the orderly and equitable distribution of assets and to facilitate the process of restructuring whenever possible. It was not intended to protect or preserve a party's position within the company in the case of a dispute between shareholders, or to prevent different views from being taken about the direction of the restructuring.

The Court held that, although there were serious concerns about the foreign representative's fitness to serve as the company's foreign representative, the Singapore Model Law did not allow the Singapore court to appoint, of its own accord, another foreign representative in substitution, as this was a matter to be determined by the foreign proceeding itself.

The Court also observed that the Singapore court did not expect foreign courts to enforce its injunctions or moratoria, and correspondingly, any alleged non-compliance in Singapore with foreign injunctions or moratoria would be a matter solely for that foreign court. The court also observed that in general, where the Singapore Model Law was applicable to the subject matter, the court would be slow to allow common law recognition to be invoked as an alternative regime.

Schemes of arrangement: key developments

In 2020, the Singapore High Court granted super-priority status to rescue financing for the second time since the legislative provision was introduced in 2017.68 A local civil engineering contractor listed on the Singapore Stock Exchange, Swee Hong Limited, applied for, and was granted, super-priority financing in aid of a proposed scheme of arrangement. The court ordered that the new rescue financing be secured by a first fixed charge over the company's unencumbered assets, and that previous rescue financing that had already been provided be granted super-priority over all preferential and unsecured debt in the event of a winding up.69

In Hyflux Ltd v. SM Investments Pte Ltd [2019] SGHC 236, the Singapore Court considered the scope of the moratorium granted under Section 211B of the Companies Act. The Court held that s 211B(1)(c), which restrains the commencement or continuation of any proceedings against a company undergoing the scheme of arrangement, does not, in the absence of express statutory language to the contrary, apply to counterclaims which are purely defensive. Hence, notwithstanding the Section 211B moratorium in favour of the plaintiff company undergoing restructuring, a defendant may raise a counterclaim without the leave of court insofar as it operates to extinguish or negate a claim brought by the plaintiff company, without affecting the position of other creditors. However, any other counterclaim that goes beyond operating as a defence (e.g., a counterclaim for damages or property) requires leave of court. In granting leave, the Court will have to go through a balancing exercise to consider the needs of the interests of the defendant as against the plaintiff company and its creditors, weighing (1) the impact on other creditors, (2) the possible distraction from restructuring and (3) the prejudice or effect of refusing or allowing the application on parties. In that case, the Court granted leave to bring the counterclaim, subject to the safeguard that there be no execution, so as to ensure that the defendant did not gain an advantage over the other creditors through its counterclaim.

Judicial management: key developments

The Singapore High Court affirmed a judicial manager's distributive powers to unsecured creditors outside of a scheme of arrangement or liquidation, allowing the judicial managers of Ryobi Kiso (S) Pte Ltd to make interim distributions of funds to its creditors.70

Winding up: key developments

The Singapore Court has clarified that, notwithstanding the absence of a legislative provision, it has jurisdiction to set aside a winding-up order under its inherent powers.71 Such application should be made by the petitioning creditor or the liquidator. This development thus functions as a stop-gap interim measure until the Insolvency Act (which contains express provisions for the termination of winding-up proceedings) comes into force.72

Seah Chee Wan and another v. Connectus Group Pte Ltd [2019] SGHC 228 involved the court's discretion to refuse a winding-up order on the grounds of insolvency, even after finding that the company was cash-flow insolvent. In that case, the High Court found that the company was cash-flow insolvent, but nevertheless exercised its discretion and declined to wind up the company on the grounds of insolvency – among other things, the company had an ongoing business with thriving operations that was capable of generating cash that could eventually be used to pay off its debts, and there was insufficient evidence to conclude that the company was balance-sheet insolvent. The company was, however, ordered to be wound up on a different ground: that it would be just and equitable to do so in the context of a dispute between shareholders.

Arbitration and insolvency

In respect of a winding-up application which one party contended was premised on a debt that is subject to arbitration, the Singapore Court of Appeal issued two decisions, AnAn Group (Singapore) Pte Ltd v. VTB Bank (Public Joint Stock Company) [2020] SGCA 33 and BWG v. BWF [2020] SGCA 36, holding that the lower prima facie standard of review would apply instead of the higher 'triable issues' standard (i.e., the debtor need only show that there is a prima facie dispute in relation to the debt which is subject to the arbitration agreement, and need not go so far as to establish a substantial or bona fide dispute). If, however, the applicant creditor demonstrates legitimate concerns about the solvency of the debtor company as a going concern, and no triable issues are raised by the debtor, the court can grant a stay, as opposed to a dismissal, of the winding-up application.

Slim Beauty House Co Ltd v MSB Beauty Pte Ltd [2019] SGHC 194 also demonstrated the care that must be taken in bringing winding-up applications premised on a prior arbitral award. In that case, the plaintiff had obtained an arbitral award73 that ordered the defendant in the arbitration to bear the costs of the application for winding up and liquidation of a joint venture company. Subsequently, the plaintiff brought an application before the High Court to wind up the joint venture company. However, as the applicant had not joined the defendant in the winding-up application, the Court declined to grant applications by plaintiff and the liquidator of the company for the costs of winding up and liquidation to be paid by the defendant. Instead, as the arbitration proceedings were separate from the winding-up proceedings, the plaintiff had to enforce the arbitral award in the usual way. If the defendant disputed the quantum or liability to pay, the plaintiff would have to commence an application against the defendant, joining the liquidator as co-defendant.


The oil and gas and offshore and marine industries continue to experience headwinds, with oil service provider EMAS Offshore applying to be placed into judicial management in July 2019 after failed restructuring efforts.74 Upstream oil and gas firm KrisEnergy also obtained a debt moratorium in September 2019.75

There have also been highly publicised cases among certain commodities traders, with Agritrade International being placed under judicial management in February 2020.76

Hin Leong Trading Pte Ltd (Hin Leong) and Ocean Tankers (Pte) Ltd, which are part of a group of companies which collectively form the largest integrated downstream energy group in Singapore and one of Asia's largest bunker suppliers, were both placed under interim judicial management in April and May 2020 respectively.77

In May 2020, fuel trader Zenrock Commodities Trading Pte Ltd was also placed under judicial management, following allegations of dishonest transactions, including the use of the same oil cargo to obtain loans from different lenders. Police raids on Zenrock's offices have been reported.78

A search on the register of companies revealed that Otto Marine Limited and Panoil Petroleum Pte Ltd,79 which entered into judicial management in 2018 and 2017 respectively, have since entered compulsory liquidation. Other companies mentioned in previous editions, such as Swiber Holdings Limited (entered judicial management in July 2016), Technics Oil & Gas (entered judicial management in July 2016) and Swissco Holdings Limited (entered judicial management in April 2017), all appear to be undergoing an extended period of judicial management as at the time of writing.80

Home-grown water and energy solutions provider Hyflux Limited, which obtained a debt moratorium in May 2018, remains in restructuring after the scuppered restructuring deal (which led to the decision in Hyflux Ltd v. SM Investments Pte Ltd [2019] SGHC 236 discussed above),81 with the debt moratorium extended to 30 July 2020 at the time of writing.82 The scheme of arrangement in respect of H&C S Holdings Pte Ltd, which was highlighted in the last year's edition as the first instance in which a foreign court recognised Singapore's worldwide moratorium under s 211B of the Companies Act,83 was sanctioned by the Singapore High Court this February.84 In a relatively positive development, Marco Polo Marine Ltd posted profits of S$168 million in the first year after it emerged from a scheme of arrangement in January 2018.85


Following Singapore's adoption of the Singapore Model Law, Singapore courts have been empowered to grant recognition for foreign main or non-main proceedings in accordance with the UNCITRAL Model Law. Foreign main proceedings qualify for more extensive relief than foreign non-main proceedings – for example, an automatic stay and suspension of actions or proceedings against the debtor's property arises upon recognition of a foreign main proceeding.

The enhanced moratorium in a scheme of arrangement (see Section II.i above), which may be expressed to have in personam worldwide effect, has also raised interesting questions on how foreign courts may view such a moratorium. An English court has recognised Singapore's extraterritorial moratorium.86 On the other hand, a Hong Kong court doubted that Hong Kong courts would be able to recognise the effect of such an extraterritorial moratorium in Hong Kong (which has not enacted the UNCITRAL Model Law).87


The difficult global economic climate is expected to herald a significant increase in restructuring and insolvency activity in Singapore and the region. In particular, key sectors such as oil and gas, maritime, retail and commodities may be among the hardest hit. These developments will certainly be watched closely by the relevant stakeholders including lenders, borrowers and insolvency practitioners.



1 Kenneth Lim Tao Chung is a partner and Wong Pei Ting is a senior associate at Allen & Gledhill LLP.

2 Gita Gopinath (Chief Economist, International Monetary Fund) 'The Great Lockdown: Worst Economic Downturn since the Great Depression' (, 14 April 2020 (accessed 20 May 2020).

3 International Monetary Fund, DataMapper[email protected]/OEMDC/ADVEC/WEOWORLD (accessed 20 May 2020).

4 Ministry of Trade and Industry Press Release, MTI Downgrades 2020 GDP Growth Forecast to '–7.0 to –4.0 Per Cent' (26 May 2020) (accessed on 28 May 2020).

5 Ministry of Trade and Industry Press Release, MTI Downgrades 2020 GDP Growth Forecast to '–0.5% to 1.5%' (17 February 2020) (accessed on 28 May 2020).

6 These developments were discussed in detail in last year's edition.

7 Ministry of Law, Public Consultation on Proposed Draft Subsidiary Legislation Under Section 440 of the Insolvency, Restructuring and Dissolution Act (23 March 2020) (accessed 20 May 2020).

8 For example, the Companies (Winding-Up) Rules (Cap 50, Rg 1, 2006 Rev Ed).

9 Section 210(1) of the Companies Act.

10 Section 211B(8) of the Companies Act.

11 Section 211B(1) of the Companies Act.

12 Section 211B(5) of the Companies Act.

13 Section 211C of the Companies Act.

14 Section 211H of the Companies Act.

15 Section 211I of the Companies Act.

16 Section 211E of the Companies Act.

17 Re Attilan Group Ltd [2018] 3 SLR 898 (Re Attilan).

18 Re Attilan.

19 Re Attilan.

20 See further at Re Attilan.

21 Re Attilan.

22 Sections 227M and N of the Companies Act.

23 Section 227C of the Companies Act.

24 Section 227D(4) of the Companies Act.

25 Section 227HA of the Companies Act.

26 Section 247 of the Companies Act.

27 Section 253 of the Companies Act.

28 See Section 254 of the Companies Act for the full list.

29 Section 254(1)(e) of the Companies Act.

30 Section 254(2)(a) of the Companies Act. Temporary relief measures have been introduced in light of the ongoing global covid-19 outbreak (discussed in Section III).

31 Section 254(2)(b) of the Companies Act.

32 Section 254(2)(c) of the Companies Act.

33 Chip Thye Enterprises Pte Ltd (in liquidation) v. Phay Gi Mo [2004] 1 SLR(R) 434.

34 Section 258 of the Companies Act.

35 Section 262(3) of the Companies Act.

36 Section 290(1)(b) of the Companies Act.

37 Section 298 of the Companies Act.

38 Section 296 of the Companies Act.

39 Section 297(1) of the Companies Act.

40 Section 259 of the Companies Act.

41 Centaurea International Pte Ltd (in liquidation) v. Citus Trading Pte Ltd [2017] 3 SLR 513.

42 Section 329 of the Companies Act, read with Section 99 of the Bankruptcy Act.

43 Section 329 of the Companies Act read with Section 98 of the Bankruptcy Act.

44 Companies (Application of Bankruptcy Act Provisions) Regulations, r 6.

45 Section 330 of the Companies Act.

46 Sections 227X(b) and 227T(1) of the Companies Act.

47 Section 131(3)(g) of the Companies Act.

48 Aavanti Offshore Pte Ltd (in creditors' voluntary liquidation) v. Bab Al Khail General Trading and another [2020] SGHC 50.

49 Section 328 of the Companies Act.

50 Section 157(1) of the Companies Act.

51 Liquidators of Progen Engineering Pte Ltd v. Progen Holdings Ltd [2010] 4 SLR 1089.

52 Dynasty Line Ltd (in liquidation) v. Sukamto Sia and another and another appeal [2014] 3 SLR 277.

53 Section 339(3) of the Companies Act. Temporary relief measures have been introduced in light of the ongoing global covid-19 outbreak (discussed in Section III).

54 Section 340(2) of the Companies Act.

55 Section 340(1) of the Companies Act.

56 Section 340(5) of the Companies Act.

57 Living the Link Pte Ltd (in creditors' voluntary liquidation) v. Tan Lay Tin Tina [2016] 3 SLR 621.

58 Parakou Investment v. Parakou Shipping Pte Ltd (in liquidation) [2018] 1 SLR 271.

59 For the purposes of this chapter, we only discuss the parts of Parts 2, 3 and 4 of the Covid-19 Act that are relevant to restructuring and insolvency. We do not discuss Parts 5, 6 and 6 of the Covid-19 Act (which cover measures for court proceedings, remission of property tax and control orders).

60 These are listed in the Schedule of the Covid-19 Act: (1) certain contracts for grants of a loan facility secured against any commercial or industrial immovable property, or granted to an 'enterprise' (being companies where (a) not less than 30 per cent of their shares or other ownership interest are held by Singapore citizens or permanent residents, and (b) the turnover of the group (within the meaning of the applicable Accounting Standards) to which it belongs does not exceed $100 million in the latest financial year); (2) hire purchase agreements or conditional sales agreements; (3) event contracts; (4) tourism-related contracts; (5) construction or supply contracts or performance bonds or equivalent granted pursuant construction or supply contracts; (6) leases or licences of non-residential immovable property; or (7) options or agreements with housing developers for the purchase of a unit of housing accommodation.

61 The rationale at setting the cut-off point of 25 March 2020 is that it is one day after the Singapore Government introduced tighter safe-distancing measures to reduce the further spread of covid-19, such that parties that nevertheless knowingly entered into contracts after such date should not seek help under the covid-19 Act: See the Ministry of Law, Second Reading Speech by Minister for Law, Mr K Shanmugam, on the covid-19 (Temporary Measures Bill) (7 April 2020) (accessed on 19 May 2020).

62 The rationale for setting the cut-off point of 1 February 2020 is that this is the date when the impact of covid-19 started to be significantly felt in Singapore: See the Ministry of Law, Second Reading Speech by Minister for Law, Mr K Shanmugam, on the covid-19 (Temporary Measures Bill) (7 April 2020) (accessed on 19 May 2020).

63 See further at Part 2 of the Covid-19 Act.

64 See s 22(1) of the Covid-19 Act.

65 See s 22(2) of the Covid-19 Act.

66 The COVID-19 (Temporary Measures) (Alternative Arrangements for Meetings) (Corporate Insolvency) Order 2020.

67 This was discussed in last year's edition.

68 The first instance of a successful application was in 2019, in an application by Holdings Ltd. This was discussed in detail in last year's edition.

69 See the Swee Hong Limited Singapore Stock Exchange announcement (17 February 2020) (accessed on 21 May 2020). At the time of writing, no reported decision was available.

70 The Business Times: 'Ryobi Kiso's judicial managers to get court approval to pay some creditors' (12 February 2020) (accessed on 19 May 2020). At the time of writing, no reported decision was available.

71 Standard Chartered Bank (Singapore) Ltd v. Construction Professional Resources Pte Ltd [2019] SGHC 168.

72 This was discussed in last year's edition.

73 See also The Straits Times: 'Mary Chia unit ordered to pay over S$580k to Japan JV partners' (15 July 2017) (accessed on 21 May 2020).

74 The Straits Times: 'Emas Offshore applies for judicial management after failed rescue deals' (22 July 2019) (accessed on 21 May 2020).

75 The Straits Times: 'KrisEnergy gets 3-month debt moratorium ahead of investor meeting on Tuesday evening' (10 September 2019) (accessed on 21 May 2020).

76 The Straits Times: 'Collapse of Singapore commodity firm Agritrade leaves lenders exposed' (28 February 2020) (accessed on 19 May 2020).

77 The Straits Times: 'Ocean Tankers placed under judicial management' (13 May 2020) (accessed on 21 May 2020).

78 The Straits Times: 'Singapore oil trader Zenrock owes more than US$600 million: Court document' (12 May 2020) (accessed on 19 May 2020).

79 Discussed in the 2018 edition of this chapter.

80 Singapore Stock Exchange Swiber Holdings Limited announcement (30 April 2020) (accessed on 21 May 2020); Singapore Stock Exchange Technics Oil & Gas announcement (13 January 2020) (accessed on 21 May 2020); Singapore Stock Exchange Swissco Holdings announcement (26 February 2020) (accessed on 21 May 2020).

81 The Straits Times: 'Two more months of reprieve from creditors for Hyflux to allow for work on restructuring plan' (29 November 2019) (accessed on 21 May 2020).

82 The Business Times: 'Hyflux gets waivers, extensions for AGMs and results pending reorganisation' (14 May 2020) (accessed on 21 May 2020).

83 Discussed in last year's edition.

84 Global Restructuring Review: 'Creditors approve steel company's Singapore scheme after English recognition' (10 January 2020) (accessed on 21 May 2020).

85 Discussed in the 2018 edition of this chapter.

86 Discussed in last year's edition; Global Restructuring Review: 'Creditors approve steel company's Singapore scheme after English recognition' (10 January 2020) (accessed on 21 May 2020).

87 Discussed in last year's edition; Re CW Advanced Technologies Limited [2018] HKCFI 1705.

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