As Singapore continues to advance its position as an international hub for restructuring and insolvency, it has implemented a number of changes to its legislative framework. One of the key developments has been the adoption of the UNCITRAL Model Law on Cross-Border Insolvency ("Model Law"), which has been given force of law in Singapore. The Model Law provides procedural mechanisms to facilitate the conduct of cross-border insolvencies.
The case of United Securities Sdn Bhd (in receivership and liquidation) and another v United Overseas Bank Ltd [2021] SGCA 78 was the first instance in which the Singapore Court of Appeal has considered the application of the Model Law. The Court of Appeal considered the principles relating to the recognition of foreign proceedings and when local proceedings should be stayed in favour of foreign proceedings.
In this case, the Singapore Court of Appeal accepted that Malaysian insolvency proceedings constituted the foreign main proceeding, but declined to grant a stay of Singapore proceedings, allowing the Respondent bank to continue with its court application for declarations relating to its security interests. The decision demonstrates that local proceedings will not always give way to foreign main proceedings, highlighting the relevant factors that the court will take into account.
The Respondent was successfully represented by Lee Eng Beng, SC and Torsten Cheong from the Restructuring & Insolvency Practice and Appeals & Issues Practice.
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