*Originally published on LinkedIn here. Certain further amendments and changes to the content have been made.

At the INSOL 2017 Congress, one of the hot topics was the upcoming legislative amendments to Singapore’s Companies Act, coming into effect this 31 March 2017 videthe Companies (Amendment) Bill 2017 (the “Bill“).

It would not be an understatement to say that the changes envisaged by the Bill will make sweeping amendments to inter alia Singapore’s insolvency and debt-restructuring regimes.

The specific amendments to the Companies Act (Cap. 50) relating to the insolvency and debt restructuring regimes, though passed into law on 10 March 2017, have yet to come into effect.

One can only speculate as to when that will happen, but I understand that it is the Government’s intention to have these changes take effect by the end of the second quarter of 2017.

This article considers the repercussions and ramifications of such changes, and how they may put Singapore on the map as a global debt restructuring hub.

Rival or Pretender?

The words on many practitioners lips was whether Singapore could rival the United States and the United Kingdom as a centre for international debt-restructuring (that’s right, not just regionally – but internationally) and, if so, the impact that this might have on the global turnaround community.

Although the amendments are not yet in effect, answering the question as to whether Singapore will prove an effective alternative is honestly not rocket science.

Making the Cut

Let’s examine the some of the more important factors taken into consideration by distressed companies (and/or their creditors, liquidators or their management) in choosing a jurisdiction to facilitate a cross-border turnaround (or at least an orderly realization of assets):-

(1) Respectability – The jurisdiction must be one where its courts are known to be fair, its justice system incorruptible and the government secure;

(2) Cost and Expense – Tied closely to respectability, jurisdictions like the United Kingdom or the United States are perfectly aware that their courts and government institutions are well-respected, and there is therefore a premium to be paid in restructuring in these jurisdictions (particularly when seeking relief under Chapter 11).

Provide a cheaper alternative (and here we’re referring to lawyers’ fees, court costs and independent advisor charges) without compromising on respectability, and you’ve got a solid alternative jurisdiction to organise a turnaround (subject to the other factors below);

(3) Efficiency, Transparency and Fairness – Distressed companies want effective, far reaching protection quickly, whereas creditors and stakeholders need to trust that the system isn’t one where the restructuring will drag on for months on end simply to stave off an inevitable liquidation or to facilitate an asset-stripping of the company (or even the incurrence of unnecessary professional costs with no real objective in sight).

Both companies and creditors need lawyers and judges who are able to respectively and swiftly provide the relevant assistance and orders needed, without undermining the credibility of the system.

This means balancing the interests of debtors and creditors alike in a fair and equitable manner, without developing a reputation for favouring the interests of one group over another or others.

It also means cooperating with other jurisdictions and allowing the Courts and the professionals in those jurisdictions to take the lead where appropriate.

(4) The Debtor– Finally, and probably the most important factor, is the make up of the distressed company itself (or the group of companies and its interests) and/or the objectives of the process(es), namely (and amongst other things):-

  • where its assets, creditors and key operating subsidiaries are located / incorporated;
  • the regions and jurisdictions involved in cross-jurisdictional turnarounds or multinational liquidations;
  • the attitude, degree of cooperation displayed by and nationalit(ies) of key management; and/or
  • whether what is envisaged is a cooperative restructuring or a debt-enforcement, asset recovery exercise.

The first three factors (i.e. respectability, price and efficiency, transparency & fairness) should only be considered once there is at least some visibility and a road map on the fourth but what is clear is this – if the company (foreign or local) has a nexus with Singapore, the infrastructure will certainly be there to facilitate whatever turnaround, restructuring, liquidation and/or enforcement proceedings that are or may be required.

Connecting the Dots

Singapore has undisputed international standing as an arbitration, financial and banking services hub, and there is no reason to doubt that it will be a respectable hub for international debt-restructuring or the independence and quality of its bench and bar.

Price-wise, there’s simply no challenge. Singapore simply provides the same services at rates cheaper to its European and US counterparts. Whether this will continue to be the case in the future remains to be seen, but at present, there is no doubt (in my mind at least) that restructuring and insolvency proceedings in Singapore cost but a percentage of what they would (usually) cost in US and Europe.

Finally, and if there is one thing Singapore is known for (apart from its food), is its efficiency. Court and other administrative processes which – in some jurisdictions – may take years or months are resolved by the Singapore Courts in weeks or days if urgency so requires.

By way of general example, full-scale trials with cross-examination are usually completed within a year.

Filing applications and obtaining orders on an urgent basis do not require travel to exotic county courts or crossing municipal boundaries, but may be obtained within days (if not the very same day) from the time the application(s) is filed with the Courts. This is of course provided counsel satisfies the Court as to the genuine urgency of the application.

Transparency is also paramount in the decision making process with the Courts vigilant against applicants seeking ex parte orders without informing the relevant parties. Only in extreme cases are ex parte applications for stays/moratoriums/search/freezing orders granted without notice, but even then early return dates are duly set where all relevant stakeholders are invited to attend and ventilate their views so that their rights may, where appropriate, be vindicated.

What I’m driving at is simple, the Singapore Courts take and weigh the considerations of all stakeholders very seriously, and make orders appropriate in the circumstances which may be open to change and challenge as the context and contours of the matter and situation develop.

The Courts have done this in the most complex litigation or arbitration matters involving all manner of legal issues and jurisdictions, and there’s no reason to doubt that a different approach would be adopted in the context of facilitating a multi-jurisdictional turnaround.


My conclusion? It’s a bold one, but I think Singapore’s plan to develop itself as an international debt-restructuring hub will be an outstanding success.

Sure – there will be teething problems, tweaks to legislation will have to be made, the insolvency and restructuring bench and bar expanded (or we’ll have exhausted Judges and overworked(! if not already) lawyers) whereas key judgments will be critiqued, criticised and broken down as and when they are released with naysayers looking to find gaps in logic, jurisprudence or justice.

But all in all, if I had to crystal ball gaze, I wouldn’t bet against Singapore rising to become a viable alternative to jurisdictions like the US and the UK insofar as international insolvency and debt restructuring proceedings are concerned.

Like I said, the most important factor remains the company and the objectives of the process. If these are more easily achieved in other jurisdictions, then Singapore may not be the appropriate forum.

But as tensions between (and I so hate using this turn of phrase) East and West continue to subsist – particularly in light of the Trump administration’s protectionist policies and the uncertainty of the United Kingdom (and what English law means) following BREXIT – Singapore is poised to take up the mantle as a neutral, well-respected, common ground to meet, discuss and reach agreement, if not compromise.

I see this rationale applying to Singapore’s desire to reach (and become) a trusted, established and international hub for multi-jurisdictional debt-restructuring and/or insolvencies.

As a Singapore citizen, I am proud of my nation-state for taking this bold step forward. Say what you will, but nothing ventured nothing gained.

April 2017

*The contents of this article represent the views of the author alone from a Singapore law perspective and are subject to copyright protection under the laws of the Republic of Singapore (as may from time to time be amended). No part of this article may be reproduced, licensed, sold, published, transmitted, modified, adapted, publicly displayed and/or 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 the author.

Please note that whilst the information in this article is correct to the best of the author’s knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice for and/or in respect of 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. All the author’s rights are expressly reserved and nothing herein shall be construed as a waiver thereof.