*This article was co-written by Mr Thio Shen Yi, S.C. and I, and published as a Firm client update in July 2016.

Case Commentary:

Re Opti-Medix Ltd (in liquidation) and anor matter [2016] SGHC 108
(“Re Opti-Medix”)

The recent unreported Singapore High Court decision in Re Opti-Medix Ltd (in liquidation) and anor matter [2016] SGHC 108 (“Re Opti-Medix”) is a fresh milestone in Singapore’s cross-border insolvency law. Released on 3 June 2016, the decision demonstrates the willingness of the Singapore Courts to recognize and give effect to foreign bankruptcy orders here in Singapore.


On 13 November 2015, two BVI-incorporated entities (Medical Trend Limited and Opti-Medix Limited, collectively the “BVI Entities”) were placed in bankruptcy, with a bankruptcy-trustee appointed in respect of both companies (the “Japanese Liquidator”), by order of the Tokyo District Court (the “Japanese Bankruptcy Order”).

The Japanese Liquidator applied to the Singapore High Court to have the Japanese Bankruptcy Order recognized in Singapore, so that the Japanese liquidator could ascertain, administer, and dispose of the BVI Entities Singapore-based assets.

No order to wind up the BVI Entities in Singapore had been made prior to the application. Therefore, what was sought was an outright recognition of the Japanese Liquidator’s rights to inter alia gather in and administer the Singapore-situated assets of the BVI Entities.

The Singapore High Court acceded to the Japanese Liquidator’s application, ordering inter alia that the BVI Entities’ moveable assets and records vest in the Japanese Liquidator, and that he be empowered to collect and recover those assets and records. Subject to the payment of preferential debts and other debts incurred in Singapore (the “Undertaking”), the Japanese Liquidator was empowered to remit the surplus Singapore-based funds to Japan.

In recognizing the Japanese Liquidator’s entitlement to the assets, the Singapore High Court noted that:-

“…there has apparently been no written decision on the recognition of foreign liquidators (or bankruptcy trustees as in this case) from jurisdictions other than the place of incorporation of the companies concerned.”

A Universalist Approach to Cross-Border Insolvency?

Prior to this decision, the last reported case where the Singapore Courts permitted a remission of a foreign company’s Singapore-situated assets to a foreign jurisdiction to be administered by foreign liquidators was the Court of Appeal decision in Beluga Chartering GmbH (in liquidation) and others v Beluga Projects (Singapore) Pte Ltd (in liquidation) and another (Deugro (Singapore) Pte Ltd, non-party) [2014] 2 SLR 815 (“Beluga”).

However, in that case, the foreign company in question (i.e. Beluga Chartering GmbH (“Beluga Germany”)) had been wound up in its place of incorporation, i.e. Germany, and subsequently in Singapore. The application to remit Beluga Germany’s Singapore-based assets to Beluga Germany’s administrator was therefore brought by Beluga Germany’s Singapore liquidators (rather than the German administrator himself).

The liquidation of Beluga Germany in Singapore was recognized by the Singapore Courts as ancillary to the principal, ongoing, liquidation in Germany. On this basis, the Singapore Court of Appeal agreed to the Singapore liquidators’ application for Beluga Germany’s Singapore-situated assets to be remitted to Germany, to be administered by the German liquidator in accordance with German law. No provision was made for locally incurred or preferential debts since Beluga Germany was not considered as a foreign registered company or a foreign company which ought to have registered. The ring-fencing provision in Section 377(3)(c) of the Act therefore did not apply.

The decision in Re Opti-Medix Ltd goes two steps further insofar as this involved an application by the Japanese Liquidator to remit BVI-incorporated companies’ assets from Singapore to Japan, where Japan was not the place of incorporation of the foreign companies and even though the BVI Entities had not been wound up in Singapore.

In granting the Japanese Liquidators’ application, Judicial Commissioner Aedit Abdullah (“JC Abdullah”) observed:-

In cross-border insolvency, there has been a general movement away from the traditional, territorial focus on the interests of the local creditors, towards recognition that universal cooperation between jurisdictions is a necessary part of the contemporary world. Under a Universalist approach, one court takes the lead while other courts assist in administering the liquidation. This is the most conductive to the orderly conduct of business and resolution of business failures across jurisdictions. The tone of the approach in Beluga and the telegraphed adoption of the UNCITRAL Model Law on Cross-Border Insolvency (30 May 1997) (the “Model Law”) in Singapore are indicators that Singapore is warming to Universalist notions in its insolvency regime.”

[emphasis added]

The Singapore High Court went on to hold that under the common law, the Singapore Courts could recognize a jurisdiction other than the country of incorporation as a debtor’s centre of main interests (“COMI”). Where this could be established, the liquidators appointed by the bankruptcy court from the COMI jurisdiction were the individuals best placed to administer and oversee the debtor’s liquidation. In the present case, Japan was held to be the BVI Entities’ COMI and, accordingly, the Japanese Liquidator’s entitlement to the BVI Entities’ locally-situated assets was recognized and given effect to, subject to the Undertaking. It is unclear from the decision whether, as a matter of fact, the BVI Entities had any Singapore incurred or preferential debts which needed to be discharged prior to remission of the surplus to Japan.

In reaching this conclusion, JC Abdullah expressed a preference for the approach advocated by Lord Hoffmann in the House of Lords’ decision in Re HIH Casualty and General Insurance Ltd[2008] 1 WLR 852 over that suggested by Lord Collins in the UK Supreme Court decision in Rubin v Eurofinance SA [2013] 1 AC 236 (“Rubin”).

This meant that JC Abdullah agreed with Lord Hoffmann that the Singapore courts have the necessary jurisdiction to recognize foreign insolvency orders and give effect to them under common law. In comparison, Lord Collins in Rubin expressed the view that any special recognition of foreign insolvency orders should be addressed by legislative reform rather than being an issue which could generally be resolved by judge-made law.

As the application in this case was unopposed, it is highly unlikely (if at all possible) that the decision will be appealed. What is unclear, however, is whether the decision will be favourably treated or adopted in subsequent decisions.


The High Court decision in Re Opti-Medix is important. It signals that the Singapore Courts are increasingly willing to embrace a universalist – rather than territorial – approach to cross-border insolvency issues, a marked change from previous policy (expressed extra-judicially by former Chief Justice Chan Sek Keong, see “Cross-Border Insolvency Issues Affecting Singapore” (2011) 23 SAcLJ 413 at [16] to [19])).

Even the Court of Appeal in Beluga did not expressly endorse a universalist approach to cross-border insolvency issues, observing instead that:-

Most courts recognise the desirability and practicality of a universal collection and distribution of assets and that a creditor should not be able to gain an unfair priority by an attachment or execution on assets located within the jurisdiction of the court subsequent to a winding up order made elsewhere. However, this can only operate as a very broad statement of principle. Whether and how the Singapore court will render assistance to foreign winding up proceedings through the regulation of its own proceedings will depend on the particular circumstances before it.”

JC Abdullah’s decision unreservedly appears to favour a universalist approach (although it must be said that “local interests” were protected by virtue of the Undertaking provided by the Japanese Liquidators).

The implications of this are yet to be seen, but we may expect increased comity from countries on similar cross-border issues if the Singapore Courts are perceived as willing, as far as practicable, to give effect to the insolvency orders of those foreign courts.

Second, the decision raises the question of what other types of foreign insolvency orders the Singapore Courts may be prepared to give effect to. For example, orders by foreign courts in the proper exercise of their bankruptcy jurisdiction reversing pre-liquidation antecedent transactions of a foreign debtor company may, potentially, be recognized by the Singapore Courts under the common law.

What is clear though is that the decision marks a bold step for the Singapore Courts. Whilst it is open to the Court of Appeal, in the appropriate case, to revert to a more conservative, incremental approach to such cross-border insolvency issues, for now it appears as though the Singapore Courts are prepared to adopt a facilitative role in cross-border insolvencies.

With the impending changes to Singapore’s insolvency law (in particular the adoption of the UNCITRAL Model Law on Cross Border Insolvency), coupled with judicial inclination (where appropriate) to facilitate cross border liquidations, Singapore is on its way to emerging as the regional restructuring and insolvency hub.

July 2016

*The contents of this update are owned by TSMP Law Corporation and subject to copyright protection under the laws of the Republic of Singapore (as may from time to time be amended). No part of this update may be reproduced, licensed, sold, published, transmitted, modified, adapted, publicly displayed, broadcast (including storage in any medium by electronic means whether or not transiently for any purpose save as permitted herein) without the prior written permission of TSMP Law Corporation. Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to prove a general guide to the subject matter and should not be treated as a substitute for specific professional advice for any particular course of action as such information may not suit your specific business, operational and/or commercial requirements. You are therefore urged to seek legal advice for your specific situation.