Court of Appeal Rules on When to Intervene in a Judicial Manager’s Exercise of Discretion

While a judicial manager is given a wide discretion to employ his skills and expertise in managing the affairs of a company in judicial management, the shareholders or creditors of the company may apply to court for relief where they contend that the company’s affairs, business, or property have been managed by the judicial manager in a manner which is or was unfairly prejudicial to their interests. Yihua Lifestyle Technology Co., Ltd., & Anor v HTL International Holdings Pte. Ltd. [2021] SGHC 86 is the first decision of the Singapore High Court which had an opportunity to consider and opine on the applicable principles on when it would be appropriate to intervene in a judicial manager’s exercise of discretion. The High Court’s decision was recently affirmed on appeal by the Singapore Court of Appeal in Yihua Lifestyle Technology Co., Ltd., & Anor v HTL International Holdings Pte. Ltd. [2021] SGCA 87.

The Court here rejected the Appellants’ attempt to displace the discretion exercised by the judicial managers of a company in deciding to sell the company’s assets to the Respondent Purchasers rather than the Appellants’ preferred purchasers. The Respondent Purchasers were successfully represented by Mark Cheng, Chew Xiang, Ho Zi Wei, and Tan Tian Hui of Rajah & Tann Singapore LLP (with Audent Chambers LLC as instructed counsel).