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Published online by Cambridge University Press: 25 October 2024
To promote cooperation among stakeholders in different jurisdictions to facilitate coordinated insolvency proceedings, the United Nations Commission on International Trade Law (UNCITRAL) adopted the Model Law on Cross-Border Insolvency (MLCBI) in 1997. The MLCBI harmonises certain procedural aspects of the cross-border insolvency process, though states may choose to make modifications when adopting the MLCBI in their own legal systems. This was completed in Singapore in 2017, and the Singapore Model Law (SML) can now be found in the Third Schedule to the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) (IRDA 2018). One topic that has been the subject of much debate internationally is whether foreign solvent proceedings can be recognised under the MLCBI or the corresponding provisions in various jurisdictions: the Nevada Bankruptcy Court first answered this question in the affirmative, but this was explicitly rejected by the High Court of England and Wales (EWHC) in Re Sturgeon Central Asia Balanced Fund Ltd (in liquidation) (No 2) (Re Sturgeon). In Ascentra Holdings, Inc (in official liquidation) v SPGK Pte Ltd (Ascentra), the Singapore Court of Appeal (SGCA) held that foreign proceedings concerning solvent companies may be recognised under the SML. This commentary addresses the salient points of the SGCA's judgment and highlights the positive impact of this gradual harmonisation of the approaches taken in different jurisdictions to the MLCBI. Through a comparative analysis of the conflicting Re Sturgeon decision, three additional justifications based on the preparatory documents pertaining to the MLCBI, relevant authorities in the UK and a purposive reading of the MLCBI are provided for the approach in Ascentra. It is contended in closing that these reasons support the argument for definitively overruling the Re Sturgeon decision in the UK.
BA Hons, Law (Cantab). The author is grateful to Professor James Lee for his helpful comments during the editorial process. The author is currently based in Singapore and all views expressed in this commentary are his own, in his personal capacity. The usual disclaimer applies.
1 Re Betcorp Ltd (in liquidation) 400 BR 266 (2009).
2 [2020] EWHC 123 (Ch), [2020] 1 BCLC 600.
3 [2023] 2 SLR 421, [2023] SGCA 32.
4 Re Ascentra Holdings, Inc (in official liquidation) and others (SPGK Pte Ltd, non-party) [2023] SGHC 82.
5 Ascentra, above n 3, at [41].
6 Ibid, [40], [42]–[46].
7 Ibid, [56]–[59], citing the 1997 and 2014 Guides to interpreting the MLCBI.
8 Ibid, [65].
9 This is so for Singapore's IRDA 2018, the Australian Corporations Act 2001 and the Companies Act (2021 Rev) (Cayman Islands).
10 Re Betcorp, above n 1; In re ABC Learning Centres Ltd 445 BR 318 (Delaware US Bankruptcy Court, 2010); In re Manley Toys Ltd 580 BR 632 (New Jersey US Bankruptcy Court, 2018); In re Global Cord Blood Corporation 2022 WL 17478530 (SD New York US Bankruptcy Court).
11 Re Stanford International Bank Ltd [2009] EWHC 1441 (Ch) (Stanford) and on appeal, in [2010] 3 WLR 941. Also see Re Agrokor DD [2017] All ER (D) 83 (Nov).
12 Re Chow Cho Poon (Pte) Ltd (2011) 80 NSWLR 507 (SC, NSW).
13 ANZ National Bank Ltd v Sheahan and Lock [2013] 1 NZLR 674.
14 Ascentra, above n 3, at [97].
15 Ibid.
16 Ibid, at [29], [94].
17 Ibid, at [100]–[101].
18 Ibid, at [102]–[113].
19 Ibid, at [114]–[115].
20 Re Rooftop Group International Pte Ltd [2020] 4 SLR 680, [2019] SGHC 280 at [58].
21 Ascentra, above n 3, at [51]–[53]; Re Sturgeon, above n 2, at [109]–[112].
22 Re Sturgeon, above n 2, at [114]. This can be contrasted with proceedings that are concerned with returning value to shareholders, such as a members’ voluntary liquidation.
23 Ascentra, above n 3, at [64]–[66].
24 Ibid, at [96]. Such concerns were previously raised in Sheldon, R QC (ed) Cross-Border Insolvency (London: Bloomsbury Publishing, 4th edn, 2015)Google Scholar, cited in Re Sturgeon, above n 2, at [93].
25 Ascentra Holdings, Inc v SPGK Pte Ltd [2024] 1 SLR 130, [2024] SGCA 2.
26 Explanatory Memorandum to the CBIR 2006 at [7.1]–[7.2].
27 Report of the Working Group on Insolvency Law on the Work of the Eighteenth Session (A/CN.9/419) at [95], [105].
28 Re Sturgeon Central Asia Balanced Fund Ltd [2019] EWHC 1215 (Ch) [30]–[31], [52]. This decision was later overturned by Briggs J in Re Sturgeon, above n 2.
29 UNCITRAL Model Law on Cross-Border Insolvency with Guide to Enactment and Interpretation, UN Sales No E.14.V.2 (2014) at [73]. This was a central reason for Briggs J's decision: see Re Sturgeon, above n 2, at [119].
30 Re Sturgeon Central Asia Balanced Fund Ltd [2019] EWHC 1215 (Ch), at [23].
31 Ascentra, above n 3, at [66].
32 The 2014 Guide, above n 29, at [29].
33 UNCITRAL Model Law on Cross-Border Insolvency: The Judicial Perspective, UN Sales No 23.V.I (2022) at [86].
34 Stanford, above n 11, at [86]–[95].
35 Re Sturgeon, above n 2, at [100].
36 Stanford, above n 11, at [93], citing the original decision on the petition for winding up.
37 Re Stanford International Bank Ltd [2010] 3 WLR 941, at [15]. This point was also raised in Ascentra, above n 3, at [84].
38 Similarly, see McCormack, G ‘US exceptionalism and UK localism? Cross-border insolvency law in comparative perspective’ (2016) 36 Legal Studies 136CrossRefGoogle Scholar, where the author refers to the possibility of US decisions being less persuasive overseas due to deliberate amendments of the US adaptation of the MLCBI to fit the American ‘legislative vernacular’.
39 McCormack, G ‘Universalism in insolvency proceedings and the common law’ (2012) 32(2) Oxford Journal of Legal Studies 325, at 326CrossRefGoogle Scholar.
40 Chief Justice Menon, S ‘Transnational commercial law: realities, challenges and a call for meaningful convergence’ (2013) 2 Singapore Journal of Legal Studies 231Google Scholar.
41 Re PT Garuda Indonesia (Persero) Tbk [2024] 3 SLR 254, [2024] SGHC(I) 1, at [70]–[71].