Justice Kannan Ramesh: Speech to the Brunei Judiciary on insolvency and restructuring: the Singapore journey

BRIEFING ON INSOLVENCY AND RESTRUCTURING MATTERS

"Insolvency and Restructuring: The Singapore Journey"

Supreme Court, Brunei Darussalam

3 July 2024

Justice Kannan Ramesh

The Honourable Chief Justice of the Supreme Court of Brunei Darussalam,
The Honourable Justice Haji Abdullah Soefri,
The Honourable Justice Muhammed Faisal,
Yang Mulia Deputy Permanent Secretary, Ministry of Finance and Economy,
Distinguished Guests,
Ladies and Gentlemen,

I. Introduction

1.               Good afternoon. It is a pleasure to be back in Brunei amongst friends, and to be invited to share Singapore’s recent experience in reforming our insolvency and restructuring (or “R&I” for short) regime.

2.               This was an endeavour of immense importance. An effective and efficient R&I regime keeps the wheels of commerce turning by fuelling the entrepreneurial spirit, incentivising enterprise and encouraging prudent risk-taking, which are the foundations of contemporary capitalist economies.⁽¹⁾ Seen this way, having a robust and effective R&I regime is, central to the health and vibrancy of modern economies.

3.               This is especially so in times of uncertainty and adversity. The pandemic serves as a good illustration. In its immediate aftermath, US corporate bankruptcies hit record highs,⁽²⁾ and market watchers warned of an “insolvency domino effect” which threatened to sweep entire supply chains.⁽³⁾ While the pandemic may be behind us, uncertainty and adversity are not. The global economic outlook remains uncertain and businesses continue to face considerable headwinds.⁽⁴⁾ According to research by the Capgemini Research Institute in 2023, 77% of senior executives surveyed agreed that ongoing geopolitical issues are impacting supply chain costs and efficiency.⁽⁵⁾ A World Economic Forum report in 2024 also warned of a highly uncertain near-term economic outlook due to geopolitical developments, and highlighted that small and medium-sized companies, the bedrock of many economies, may be particularly exposed to slowing growth and elevated interest rates.⁽⁶⁾ These speak to an unsettled world, a challenging operating environment and a heightened risk of business failure.

4.               The upshot is that now, more than ever, there is a pressing need to ensure that the regime for dealing with insolvency and restructuring is robust, effective and responsive to the times. In short, the regime must be fit for purpose. This brings me to why Singapore embarked on the path of reforming her R&I regime. My focus this afternoon is on outlining our journey, and highlighting key aspects of what we did and why.

5.               This was a fairly recent journey. It started just over a decade ago in 2010 with the establishment of the first of two law reform committees. The first committee’s focus was primarily on the domestic framework, and it submitted its report in 2013. A second committee was then constituted in 2015 with the remit to improve our cross-border R&I framework and identify new state-of-the-art restructuring tools. That committee, aptly named the Committee to Strengthen Singapore as an International Centre for Debt Restructuring, submitted its report in 2016. The recommendations of both committees were broadly accepted by the Government and culminated in wide-ranging and comprehensive reforms to our legislative framework for R&I. There were many significant reforms. For the purpose of this presentation, I shall focus on two key features:

1. First, shoring up or “supercharging” as some have described it the existing scheme of arrangement regime by grafting onto it key features of the Chapter 11 regime in the US Bankruptcy Code.
   
2. Second, the development of a framework for cross-border insolvency and restructuring. Here, I will discuss two key sources of hard and soft law instruments: first, the 1997 UNCITRAL Model Law on Cross-Border Insolvency (“Model Law”), and second, the Judicial Insolvency Network (“JIN”) Guidelines for Communication and Cooperation in Cross-Border Insolvency Matters (“JIN Guidelines”)⁽⁷⁾ and the JIN Modalities of Court-to-Court Communication (“JIN Modalities”)⁽⁸⁾.

II. The old R&I regime and its limitations

6.               To understand the significance of the changes we made, it is important to first understand the old regime and its limitations. The origins of our insolvency framework date back to legislation we inherited as part of our British colonial legacy. Our personal insolvency laws were built on the Bankruptcy Ordinance 1888, while our corporate insolvency laws, the focus of my presentation today, can be traced to the Indian Companies Act of 1866.⁽⁹⁾ 

7.               For many decades, the Companies Act served as a solid, albeit rudimentary foundation for R&I in Singapore. The introduction of the judicial management regime, a non-debtor-in-possession regime, in 1987, improved the suite of options. However, it became increasingly apparent that reform was needed because of the limitations of the old regime.

8.               The old regime was circumscribed by two principal limitations. First, it was characterised by elements of a creditor-driven model for dealing with insolvencies. Conspicuously absent was a bespoke, state-of-the-art debtor-in-possession regime that offered a robust platform for ailing companies to find effective restructuring solutions.⁽¹⁰⁾ 

1. Let me explain what I mean. The creditor-driven model, as the term suggests, generally prioritises the rights of creditors. The focus is on instituting a trustee-led mechanism for ensuring prompt and adequate recovery for creditors, and due consequences for debtors who fail to discharge their debt obligations.⁽¹¹⁾ In contrast, a debtor-in-possession model is characterised by greater emphasis on rehabilitation and preserving or even enhancing the going concern value of the distressed business. Shareholders and management are given the opportunity to turn things around, thus keeping the business operational and potentially increasing the recovery or distribution to creditors by encouraging them to “ride the upside” if the restructuring turns out to be successful.⁽¹²⁾ In short, it is a win-win solution for all, if the restructuring can be pulled off. The key difference is between short-termism and taking a long-term perspective respectively.
   
2. The lack of an effective debtor-in-possession regime was problematic because creditor-driven mechanisms tended to result in liquidation. Liquidation should not be seen as a bad thing, but it is really a last port of call when all else has failed. The rehabilitation of an ailing (but not failed) business is an important, and I would suggest, necessary alternative to liquidation. It represents the best or at least the most efficient way of recycling capital. In the absence of malfeasance, the restructuring process is arguably best led by the debtor’s existing management with adequate oversight and safeguards in place, instead of a third-party trustee who does not have the same familiarity with the business or the customer base.⁽¹³⁾ This is particularly relevant in Asia where many successful businesses, even unicorns, have grown on the back of a strong entrepreneurial culture of equity.
   
3. Therefore, one of the key recommendations of the second committee was for a bespoke debtor-in-possession model to be developed.⁽¹⁴⁾ I will return to cover this in greater detail shortly.

9.               The second principal limitation of the old regime was the lack of a comprehensive statutory framework for dealing with cross-border insolvency and restructuring.

1. The corporate insolvency regime encapsulated in the Companies Act contained no express provision for auxiliary support to be provided to foreign insolvency proceedings,⁽¹⁵⁾ and made only skeletal provision for the winding up of unregistered companies and registered foreign companies.⁽¹⁶⁾ 
   
2. The architecture tended to reflect a territorial, as opposed to a universalist, approach to cross-border insolvency. On this approach, assets within jurisdiction tended to be reserved for domestic creditors,⁽¹⁷⁾ regardless of primary proceedings occurring elsewhere. Transfer of assets between jurisdictions was not provided for, and were in some instances, impeded – take, for instance, section 377(3)(c) of the Companies Act, which ‘ring-fenced’ local assets for distribution to local creditors⁽¹⁸⁾.
   
3. This parochial, territorial approach was out of step with the times and commercial realities. Globalisation meant that it was common for corporates to do business, own assets and be managed from more than one jurisdiction. The by-product of this was that corporate failure could have ramifications that reached beyond the borders of the debtor’s place of incorporation or Centre of Main Interest (or COMI for short). Insolvency proceedings were therefore often commenced in multiple jurisdictions. The ensuing multiplicity of proceedings and applicable laws made the orderly identification, management and distribution of the debtor’s assets and of course, the development of a coherent restructuring plan challenging. Absent any means of recognition, relief and coordination, fragmentation could result, with outcomes having less to do with fairness, justice and the right result, and more with chance and serendipity (as to where the debtor’s assets happened to be located). It was obvious that this was anathema to an efficient R&I outcome.
   
4. In sum, it was clear to us that it was wholly artificial – and therefore untenable – to continue viewing the R&I process for transnational business entities as comprising discrete, self-contained proceedings within jurisdictional silos. What was needed was a regime for cross-border insolvency which had as its fundamental tenets recognition and relief, and communication, coordination and cooperation across jurisdictional lines.

10.               Having set the context, let me turn to the solutions we found in reforming our R&I regime.

III. Reforming our infrastructure for insolvency and restructuring

11.               The recommendations of the two committees culminated in two tranches of legislation. The first comprised amendments to the Companies Act which came into force in May 2017⁽¹⁹⁾ – this introduced many of the recommendations of the two committees. The second was the passage of new legislation that consolidated the statutory provisions relating to corporate and personal insolvency under one roof in an omnibus act – the Insolvency, Dissolution and Restructuring Act 2018, or IRDA, as it has become commonly referred to.

12.               A raft of innovations and changes were introduced as a result. I shall focus on those which directly address the two limitations I have identified.

A. Introducing a debtor-in-possession mechanism for restructuring: Enhanced Scheme of Arrangement

13.               First, a bespoke and highly customised debtor-in-possession regime for restructuring was introduced.

14.               As mentioned earlier, the general focus of our old regime was on a creditor-driven, trustee-led process coupled with robust court oversight. In the absence of an identifiable debtor-in-possession regime, the market responded by adapting the scheme of arrangement in section 210 of the Companies Act⁽²⁰⁾ as a proxy debtor-in-possession mechanism. While this worked to some extent, it was in reality a makeshift tool not purpose-built for restructuring, and operated, as one leading academic observed, correctly in my view, on the “barest minimum” of statutory provisions.⁽²¹⁾ The fact was the scheme as originally conceived was not a restructuring tool.

15.               We therefore decided to create a bespoke regime, but took the bold step of working off the backbone of the scheme of arrangement. We retained the bones of the scheme for two reasons. First, we felt that the market’s familiarity with the scheme was valuable in bedding in the new mechanism as quickly as possible. Second, the inherent flexibility of the scheme platform was hugely attractive as it was felt that R&I needed the space for fashioning creative solutions. An overly prescriptive and inflexible platform was regarded as an undue constraint on the ability of the court and stakeholders to find the right answers to economic issues. We therefore decided to empower the scheme by “supercharging” it. This was done by grafting onto it key features of the US Chapter 11 regime. This took gumption, creativity and out-of-the-box thinking. Why you may ask? Because we were grafting provisions harvested from a very different legislative architecture, Chapter 11, onto the scheme framework. The scheme was not originally designed for this, but we were committed to making it work. Curating the right provisions from Chapter 11 and modifying the scheme with care was key, and I think we have succeeded.

16.               The features we took on board included the following:

1. First, an automatic 30-day moratorium to give immediate breathing space to the debtor to take stock and formulate a restructuring plan⁽²²⁾.
   1. Significantly, the moratorium was extendable by the court on terms, depending on the level of creditor support and the fulfilment of certain notification and disclosure requirements.⁽²³⁾ The close court supervision of the moratorium was an effort to strike the right balance between the interests of the debtor in seeking to restructure and the interests of the creditors in not having their rights held in abeyance longer than necessary.
   2. An important new step to facilitate group restructurings was the power to extend, on application, the moratorium to entities related to the debtor that were relevant to the restructuring plan, including companies within the same group.⁽²⁴⁾ I believe this is the only statutory provision of its kind and a bold step, as the related entities themselves might not be insolvent.
2. Second, creditors could be restrained from pursuing proceedings against the debtor in foreign jurisdictions.⁽²⁵⁾ This enabled the debtor’s assets outside jurisdiction to be preserved pending the outcome of the restructuring proceedings.
   
3. Third, rescue financing with “super-priority” could be raised.⁽²⁶⁾ Creating a pathway for new money (which is rescue financing) was critical as it was key to a successful restructuring.
   
4. Fourth, subject to safeguards, cross-class cram down was possible. Dissenting creditors could be crammed down across classes,⁽²⁷⁾ thus minimising the risk that the restructuring could be held to ransom by a small proportion of dissenters.
   
5. Fifth, prepackaged plans (or “prepacks” as they are commonly called) were possible. This is essentially a pre-negotiated reorganisation between the debtor and the creditors with quick entry and exit from the restructuring process, and can be particularly useful where the debtor has a small number or a limited class of creditors.⁽²⁸⁾ This has become an increasingly popular tool as demonstrated by the recent judgment of the Singapore International Commercial Court (“SICC”), a judgment of Justice James Peck, in Re No Va Land Investment Group Corporation,⁽²⁹⁾  which involved the filing of a cross-border prepack scheme by a Vietnamese real estate company to restructure bonds traded on the Singapore exchange.

17.               The result was a robust yet flexible mechanism for restructuring that, in our view, struck the right balance between giving equity enough lead on the reins while ensuring that the court retained a firm hand on the process so that creditor interests were reasonably safeguarded. As I have said on a previous occasion – “[t]he debtor may be left in possession, but the debtor is not unpoliced”.⁽³⁰⁾ 

18.               This flexibility allowed the court to develop pragmatic solutions. For instance, the court might appoint a monitoring accountant or “chief restructuring officer”, accountable to the court and to the creditors, to exercise oversight over the otherwise management-driven restructuring efforts, the cash-flow and the expenses.⁽³¹⁾ Another option was to enlist the help of an insolvency mediator to develop the restructuring plan.⁽³²⁾ These are some of the options open to the court to address what I have referred to as the “trust deficit”⁽³³⁾ that arises from concerns over the bona fides of the debtor and its restructuring efforts.

19.               The enhanced scheme of arrangement regime has worked well for us, and the idea seems to have subsequently gained currency subsequently in other jurisdictions. The UK, for instance, has since introduced a mechanism, commonly known as Part 26A, under which the debtor’s management remains in charge (a debtor-in-possession regime),⁽³⁴⁾ with oversight from a licensed insolvency practitioner (eg, a Chief Restructuring Officer or monitoring accountant) serving as a ‘monitor’, and under the protection of an extendable statutory moratorium.⁽³⁵⁾ Part 26A shares many common features with our regime.

B. Introducing a statutory framework for cross-border restructuring and insolvency

20.               I come to the second aspect of our reforms, which concerns the introduction of a statutory framework for cross-border restructuring and insolvency.

21.               The legal reality is that domestic laws apply at a jurisdictional (and not global) level, and that different jurisdictions often have different substantive laws and rules governing R&I. Parallel insolvency proceedings may therefore result. As such, there must be avenues for insolvency practitioners and courts to offer assistance and relief, and communicate and cooperate to coordinate their actions to achieve fair and just outcomes.

22.               This requires that we do at least two things: (a) first, develop a framework for recognition and assistance; and (b) second, develop protocols for communication.

1. The Model Law: A legal framework for recognition and assistance

23.               The first requires a statutory basis for recognition and relief of foreign insolvency proceedings.

1. We chose to do this by adopting the Model Law. Recognition and relief are fundamental tenets of the Model Law.
   
2. The Model Law provides a statutory basis for our courts to recognise and assist foreign insolvency proceedings⁽³⁶⁾. It also allows for the recognition of Singapore insolvency proceedings by other Model Law jurisdictions. This mutual recognition facilitates and improves the management of cross-border insolvency.
   
3. Arguably, there are also benefits in the signalling effect associated with embracing a global standard, such as the Model Law, in R&I. A global standard, such as the Model Law, provides investors with the confidence and certainty that their investments would be adequately protected in the event of failure, thereby increasing a jurisdiction’s attractiveness as a destination for investment.⁽³⁷⁾ This is particularly true in uncertain times. Certainty promotes investor appetite and confidence. Conversely, uncertainty causes hesitation and increases the cost of capital.
   
4. At the time of writing, legislation based on or influenced by the Model Law has been adopted in 63 jurisdictions, including key jurisdictions like Australia, Japan, South Korea, the United Kingdom and the USA.⁽³⁸⁾ That is a substantial user base, and the growth is gaining momentum – of the 63 jurisdictions which have adopted the Model Law, 40 have done so in the past decade alone. That’s a hugely positive trend, in my view.

2. The Judicial Insolvency Network: Supplying protocols for communication

24.               Another fundamental tenet of the Model Law is cooperation and coordination.⁽³⁹⁾ 

25.               A real risk in any cross-border insolvency is jurisdictional arbitrage and inconsistency of outcomes. Without close cooperation and effective communication between courts, parties can play jurisdictional arbitrage by moderating what they share with each court and creating disruptions, for instance, by commencing applications in different jurisdictions.

26.               For this reason, cooperation and coordination find expression in Articles 25 to 27 of the Model Law.⁽⁴⁰⁾ However, the Model Law does not address the downstream question of how exactly communication and coordination may be operationalised.⁽⁴¹⁾ The courts, where the rubber hits the road, understood the problem and the judges responded with the JIN Guidelines and the JIN Modalities. But before we consider these instruments, a word about the Judicial Insolvency Network, or JIN for short.

27.               The JIN is a network of judges from courts that are often the seat of significant cross-border R&I filings and recognition applications. The JIN was formed in 2016 in Singapore by a group of judges who were driven by a desire to improve the manner in which cross-border insolvencies were managed. The objectives were to formulate best practices and provide a platform to advance judicial thought leadership.⁽⁴²⁾ The JIN has grown from strength to strength. Almost 8 years on, it now has membership from 9 key jurisdictions, and observers from a further 11. The JIN meets annually.⁽⁴³⁾ In fact, its most recent conference was in Singapore just last month, and saw a record attendance of some 31 judges, including Justice Abdullah Soefri and Justice Muhammed Faisal, both of whom enriched the discussions with their contributions.

28.               I must acknowledge at this juncture the pivotal role of Chief Justice Menon in the JIN. The Chief Justice was instrumental in the formation of the JIN. It was he who seeded the idea, backed its formation by throwing his full support behind it, and ensured that we were fully focused on the task and made the first meeting happen in Singapore in record time – incredibly, within 6 months. He was the catalyst and the driving force. We have him to thank for the JIN.

29.               I now turn to the JIN Guidelines and the JIN Modalities. First, the JIN Guidelines: The JIN Guidelines fill the lacuna on how cooperation and communication can happen in parallel proceedings. Guidance is provided in three broad areas:

1. Procedure and application of the Guidelines (Guidelines 1–6): The first six guidelines deal with how the guidelines ought to be applied in parallel proceedings.
   1. Guideline 1 places the onus on the parties to apprise the courts, as early as is practicably possible, of the issues that may benefit from communication and coordination between courts. This enables the early spotting and management of issues.
   2. Guidelines 2 and 3 provide that the Guidelines are to be operationalised by court-approved protocols or orders of court which should provide for time-saving procedures, the coordination of requests for court approvals of related decisions and actions, and communication with creditors and other stakeholders.
   3. The Guidelines are also clear as to their limits – Guideline 4, for example, makes clear that the Guidelines do not confer or change jurisdiction, alter substantive rights, or encroach upon any applicable laws.
2. Communication between courts (Guidelines 7–9): Guidelines 7 to 9 relate to communications between the courts.
   1. Guideline 7, in particular, provides examples of methods of communication between courts including two-way communication and sharing of information either directly or through counsel.
   2. Guideline 8 provides guidance on whether communications between courts may be ex parte or otherwise, and the safeguards that must be in place including notice to the parties of when and where such communication is to take place.
3. Appearances in court (Guidelines 10–11, and Annex A): Guidelines 10 and 11 relate to the right of audience of counsel. They provide that a court may authorise a party or other appropriate person to appear before and be heard by a foreign court, subject to that court’s approval. Annex A to the Guidelines prescribes a protocol for joint hearings between two or more courts. Annex A was recently invoked to facilitate a joint hearing of concurrent recognition applications by Indonesia’s national carrier, Garuda, before the Singapore International Commercial Court (“SICC”) and the US Bankruptcy Court for the Southern District of New York. The judgment of the SICC in the Garuda case is reported.⁽⁴⁴⁾ In both applications, the same counterparty raised broadly similar objections. The SICC and the Southern District of New York felt that a joint hearing of both recognition applications would be immensely beneficial in view of the common issues raised, and this was impressed upon the parties by both courts. Court-to-court communications were initiated, and a joint case management hearing was held (both courts sat at the same time to conduct this case management hearing), pursuant to court-endorsed protocols based on the JIN Guidelines, and directions were jointly given by both courts. The directions addressed, amongst others, the preparation of a common record, the right of audience of counsel from both jurisdictions to cross-examine witnesses and make submissions to both courts, and the dates and times for the joint hearing and the related time bank. The administrative teams of both courts were galvanised to work out the details. While the joint hearing did not eventually take place due to the withdrawal of the New York application by Garuda on the cusp of the hearing, this case demonstrates the potential and benefits of court-to-court communication facilitated by the JIN Guidelines.⁽⁴⁵⁾ 

30.               It is fair to say that the JIN Guidelines are a groundbreaking contribution by the JIN. The global insolvency community recognised this by conferring the Guidelines with the “Most Important Overall Development” award at the Global Restructuring Review award ceremony in London in 2017.⁽⁴⁶⁾ 

31.               More importantly, the Guidelines have been adopted in 17 jurisdictions and used in several high-profile restructurings.⁽⁴⁷⁾ I have already touched on the Garuda case, but there are others. I cite one other. In insolvency proceedings relating to LTL Management LLC, a company in the Johnson & Johnson group, a Canadian court adopted protocols based on the JIN Guidelines for the purposes of recognition proceedings in Canada while Chapter 11 proceedings were ongoing in the US courts.⁽⁴⁸⁾ The warm embrace of the Guidelines by courts as the default mode for operationalising court-to-court cooperation and communication speaks volumes of their relevance to the management of parallel proceedings.

32.               I turn briefly to the JIN Modalities: While the JIN Guidelines provide the core principles for court-to-court communication and cooperation, they do not cover the actual mechanics for initiating, receiving and engaging in such communication. The JIN Modalities address this gap by supplying the ‘nuts and bolts’ for communication, such as arrangements as to time, method and language of communication, and with whom the lines should be first opened. Communication is facilitated and conducted through various parties including the “Facilitator”, “Initiating Judge” and “Receiving Judge”, which are terms used and defined in the Modalities.

33.               Together, the JIN Guidelines and Modalities provide a comprehensive template for court-to-court communication in parallel proceedings.

34.               The work of the JIN does not stop here. The issues arising from cross-border R&I proceedings are multifaceted, and much remains to be done.⁽⁴⁹⁾ In the interest of time, let me give you a preview of two projects that are currently in the pipeline. They are: (a) first, the intersection between maritime law and insolvency law; and (b) second, the use of alternative dispute resolution (“ADR”) to resolve issues in R&I filings.

35.               Insolvency and Maritime Law: It has been said that insolvency and maritime law might at first blush seem strange bedfellows.⁽⁵⁰⁾ Insolvency law is a collective process that emphasises the consolidation of assets in a single forum for distribution to creditors.⁽⁵¹⁾ On the other hand, maritime law allows individual creditors to secure their claims by arresting a vessel in port.⁽⁵²⁾ The difficult question is how these competing tensions should be managed in a shipping insolvency where the debtor operates a fleet of vessels which are at the risk of arrest in ports all over the world.⁽⁵³⁾ The JIN hopes to address this by developing guidelines for the management of applications for vessel arrest where the ship owner has opened primary insolvency proceedings.

36.               Insolvency and ADR: The use of ADR in insolvency has started to attract significant attention, particularly in a cross-border setting. While mediation is now an essential part of the toolkit for dispute resolution, there can be sharp differences in the way mediation features in the insolvency process. The use of arbitration in insolvency is more nascent but growing. The JIN hopes to develop a best practices guide on the use of ADR tools in insolvencies.

37.               It is clear that issues arising from cross-border R&I proceedings are beyond the capacity of any one jurisdiction to resolve. The JIN is an invaluable platform for judges to share perspectives, initiate action and coordinate joint efforts. Their collective will may offer the solution. We were therefore very pleased to have been joined by so many observer jurisdictions at our last meeting, including Brunei, and hope to continue to grow this network and community of courts.

IV.Conclusion

38.               In conclusion, I hope that this brief summary of the key amendments to our R&I regime has been useful. This was, as you can probably tell, a massive undertaking, and was only made possible by the concerted and collective effort of various stakeholders – the Bench, the Government and the Bar – pulling together as one in service of a common goal. I also hope that the brief journey into the work of the JIN has helped convey its vital importance in the global insolvency landscape. The more judges think alike and speak a common language, the better the outcomes will be.

39.               I conclude by echoing the words of Chief Justice Steven Chong. He put it best when he reminded participants at an insolvency training programme that it was “critical that all stakeholders recognise the importance of an effective insolvency and restructuring ecosystem in bringing benefits for our local economy in promoting entrepreneurship, access to finance and economic growth”.⁽⁵⁴⁾ I respectfully concur.

40.               Thank you again for your time and attention.

_{(1)       Justice Kannan Ramesh, SG Courts – Conversations with the Community, “Healing Businesses in a New World: Problems, Opportunities and Solutions” (27 March 2024) (“Conversations with the Community”), para 4.
(2)       Tayyeba Irum & Chris Hudgins, S&P Global, “US corporate bankruptcies end 2020 at 10-year high amid COVID-19 pandemic” (5 January 2021), accessible at https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/us-corporate-bankruptcies-end-2020-at-10-year-high-amid-covid-19-pandemic-61973656.
(3)       Allianz Trade, “Insolvency risk: understanding the Covid-19 domino effect”, accessible at https://www.allianz-trade.com/en_SG/resources/resources-archive/insolvency-risk--the-covid-19-domino-effect-explained.html.
(4)       See Conversations with the Community, paras 6–17, discussing the business risks arising from increasing geopolitical instability, decoupling and de-globalisation and the heightened focus on environmental concerns.
(5)       Capgemini Research Institute, “Illuminating the path: Building resilient and efficient supply chains in the consumer products and retail industry”, p 14, accessible at https://prod.ucwe.capgemini.com/wp-content/uploads/2023/10/Final-report-CRI_Supply-Chain-in-CPR-WEB_151123.pdf.
(6)       World Economic Forum. “The Global Risks Report 2024”, p 27, accessible at https://www3.weforum.org/docs/WEF_The_Global_Risks_Report_2024.pdf.
(7)       A copy of the JIN Guidelines may be downloaded at this link: http://www.jin-global.org/jin-guidelines.html.
(8)       A copy of the JIN Modalities may be downloaded at this link: http://www.jin-global.org/modalities.html.
(9)       Report of the Insolvency Law Review Committee 2013 (“2013 Report”), p 5.
(10)       Conversations with the Community, para 40.
(11)       Conversations with the Community, para 23.
(12)       Conversations with the Community, para 30.
(13)       Conversations with the Community, para 28.
(14)       Report of the Committee to Strengthen Singapore as an International Centre for Debt Restructuring (2016) (“2016 Report”), Recommendation 3.1.
(15)       2013 Report, p 226.
(16)       See sections 351 and 377 respectively of the Companies Act (Cap 50, 2006 Rev Ed).
(17)       Richard Sheldon KC (gen ed), Cross-Border Insolvency (Bloomsbury Professional, 4th Ed, 2015), para 6.3.
(18)       Section 377(3)(c) of the Companies Act (Cap 50, 2006 Rev Ed). See however, Beluga Chartering GmbH (in liquidation v Beluga Projects (Singapore) Pte Ltd (in liquidation) and another (deugro (Singapore) Pte Ltd, non,party) [2014] 2 SLR 815, in which the Court of Appeal declined to apply s 377(3)(c), holding that the foreign company in question did not fulfill the necessary conditions.
(19)       See the Companies (Amendment) Bill.
(20)       Section 210 of the Companies Act (Cap 50, 2006 Rev Ed).
(21)       Conversations with the Community, para 40, citing Wee Meng Seng, “The Singapore Story of Injecting US Chapter 11 into the Commonwealth Scheme” (2018) 15 European Company and Financial Law Review 553, pp 561–562.
(22)       See s 211B of the Companies Act (Cap 50, 2006 Rev Ed) and s 64 of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”).
(23)       See s 211B(7) of the Companies Act (Cap 50, 2006 Rev Ed) and s 64(7) of the IRDA.
(24)       See s 211C of the Companies Act (Cap 50, 2006 Rev Ed) and s 65 of the IRDA
(25)       See s 211B(5) of the Companies Act (Cap 50, 2006 Rev Ed) and s 64(5) of the IRDA.
(26)       See s 211E of the Companies Act (Cap 50, 2006 Rev Ed) and s 67 of the IRDA.
(27)       See s 211H of the Companies Act (Cap 50, 2006 Rev Ed) and s 70 of the IRDA.
(28)       Conversations with the Community, para 36.
(29)       Re No Va Land Investment Group Corporation [2024] SGHC(I) 17.
(30)       Conversations with the Community, para 43.
(31)       Re IM Skaugen SE and other matters [2019] 3 SLR 979 (“Skaugen”) at [93].
(32)       Skaugen at [93].
(33)       Skaugen at [94].
(34)       See Part 26A of the UK Companies Act 2006.
(35)       See the UK Corporate Insolvency and Governance Act 2020. Norton Rose Fulbright, “UK: A move to a more debtor-friendly restructuring regime?” (May 2020), accessible at https://www.nortonrosefulbright.com/en-gb/knowledge/publications/79e1841b/uk-a-move-to-a-more-debtor-friendly-restructuring-regime.
(36)       See Chapter III of the Model Law.
(37)       Casey Watters & Paul J Omar, “The Evolution of Cross-Border Insolvency in Singapore” (2023) 35 SAcLJ 618, para 48.
(38)       UNCITRAL, “Status: UNCITRAL Model Law on Cross-Border Insolvency (1997)”, accessible at https://uncitral.un.org/en/texts/insolvency/modellaw/cross-border_insolvency/status.
(39)       See Preamble of the UNCITRAL Model Law on Cross-Border Insolvency (1997).
(40)       Further, the preamble of the Model Law states that its purpose is, amongst other things, “to provide effective mechanisms for dealing with cases of cross-border insolvency so as to promote… [amongst other things], cooperation between the courts”.
(41)       Article 27(b) of the Model Law does not prescribe the precise mechanisms under which such communication is to be carried out. It leaves at least the following issues open: (a) the parties to the communication and any limitations that will apply; (b) whether the parties share the same intentions or understanding with respect to communication; (c) any safeguards that will apply to protect the substantive and procedural rights of the parties; (d) the language of the communication and any consequent need for translation of written documents or interpretation of oral communications; (e) acceptable methods of communication; and (f) the issues to be considered, will fall to be determined by the applicable insolvency protocols as discussed below.
(42)       Judicial Insolvency Network, “About Us”, accessible at https://www.jin-global.org/about-us.html.
(43)       Save for the period during the pandemic.
(44)       Re PT Garuda Indonesia (Persero) Tbk and another matter [2024] SGHC(I) 18 (“PT Garuda”).
(45)       PT Garuda at [4].
(46)       See “Singapore Recognised as Most Improved Jurisdiction at Inaugural Global Restructuring Review Awards” (22 June 2017), accessible at https://www.mlaw.gov.sg/news/press-releases/singapore-recognised-as-most-improved-jurisdiction-at-inaugural-/.
(47)       See, for instance, the insolvency of the Mercon Coffee Group (which had operations in various countries including the US and the Netherlands), in respect of which a protocol based on the JIN Guidelines was drawn up to facilitate a controlled liquidation of the company’s global assets. The protocol was approved by the US Bankruptcy Court for the Southern District of New York. While the specific protocol was ultimately rejected by the District Court of Amsterdam, the court recognised the importance of court-to-court communication in parallel insolvency proceedings and held that there was, in principle, no objection to declaring the JIN Guidelines (and JIN Modalities) consistent with its laws providing for tailor-made provisions in restructuring proceedings. See Ben Clarke, Global Restructuring Review, “Mercon Request to Adopt US-approved Protocol Rejected by Dutch Court” (18 March 2024), accessible at https://globalrestructuringreview.com/article/mercon-request-adopt-us-approved-protocol-rejected-dutch-court.
(48)       Re LTL Management LLC (2021) ONSC 8537.
(49)       For instance, at the latest annual conference of the JIN, members and observers of the JIN discussed and debated a wide range of issues, including the rise of cryptocurrency and digital assets and how these issues are to be resolved in the context of an insolvency.
(50)       Justice Steven Chong, Keynote address at the 2nd meeting of the Judicial Insolvency Network, “When Worlds Collide: The Interaction Between Insolvency and Maritime Law” (22 September 2018) (“When Worlds Collide”), para 3.
(51)       When Worlds Collide, para 2.
(52)       When Worlds Collide, para 2.
(53)       For instance, the insolvency of Hanjin Shipping Co Ltd, one of the largest container shipping lines in the word, in 2016 sent shockwaves across the world after creditors rushed to arrest Hanjin’s vessels, forcing courts to consider difficult issues pertaining to whether to apply the established rules of insolvency or to apply the rules concerning ship arrests: see When Worlds Collide, paras 3-4.
(54)       Opening remarks by the Honourable Dato Seri Paduka Steven Chong, Chief Justice of the Supreme Court of Brunei Darussalam, at the Insolvency (Webinar) Training for Brunei Courts, AGC, Law Society, Banks and Financial Regulators, para 6: https://insol.azureedge.net/cmsstorage/insol/media/documents_files/asia%20hub/updated-opening-remarks-by-the-hon-chief-justice-insol-training-programme.pdf.}