The UNCITRAL Model Law on Cross-Border Insolvency, which has been enacted in Singapore in an adapted form (“SG Model Law“), sets out a framework for the effective management of cross-border insolvency proceedings, allowing courts to recognise foreign restructuring and insolvency proceedings and foreign representatives. In Ascentra Holdings, Inc (In Official Liquidation) & 2 Ors v SPGK Pte Ltd [2023] SGCA 32, the Singapore Court of Appeal was faced with a fundamental question regarding the scope of the SG Model Law – whether a company has to be insolvent before the relevant proceedings may be regarded as foreign proceedings.
The Court held that the SG Model Law does not require a company to be insolvent or in severe financial distress before a proceeding concerning that company may be recognised as a foreign proceeding, and that it is sufficient if the law under which the relevant proceeding is conducted includes provisions dealing with the insolvency of a company or the adjustment of its debts. Here, the appellant company was undergoing a voluntary liquidation in the Cayman Islands along a legislative “track” which applied to solvent companies. The Court held that this qualified as a foreign proceeding under the SG Model Law and recognised it as a foreign main proceeding in Singapore.
Lee Eng Beng SC and Walter Yeo of Rajah & Tann Singapore LLP successfully represented the appellants as instructed counsel in this appeal.
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