Vol 16 (2019) - Issue 5

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Landmark Decision: First Recognition of US Bankruptcy Proceedings as Foreign Main Proceedings under Singapore Model Law in Singapore

Summary
Under Article 6 of the UNCITRAL Model Law on Cross-Border Insolvency (the 'Model Law'), the Court can only deny recognition if recognition is 'manifestly contrary' to public policy. Singapore's enactment of the Model Law (the 'Singapore Model Law') omits the word 'manifestly'. The standard of exclusion on public policy grounds in Singapore is lower than that in jurisdictions where the Model Law has been enacted unmodified.
Article 6 of the Singapore Model Law requires the denial of an application for recognition by foreign insolvency representatives appointed under proceedings enjoined by a Singapore Court.
Even if foreign insolvency proceedings had been commenced in breach of an injunction ordered by a Singapore Court, it did not follow that such breach remained a ground for refusal of recognition after the injunction had been discharged and the Court issuing the order was content to let the order be discharged.
The Singapore High Court held that the relevant date for determining a debtor's centre of main interests ('COMI') is the date on which the application for recognition is filed. The presumption under Article 16 of the Singapore Model Law, that the debtor's registered office is presumed to be the debtor's COMI in the absence of proof to the contrary, is the starting point which can be rebutted by evidence to the contrary. Factors to be taken into account in the COMI assessment include the following:
(a) The location from which control and direction was administered,
(b) The location of clients,
(c) The location of creditors,
(d) The location of employees,
(e) The location of operations,
(f) Dealings with third parties, and
(g) Governing law of contracts.