Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd

The shareholders of the first appellant (“the Company”) had resolved to place it in voluntary liquidation but failed to file a declaration of solvency within 28 days after the commencement of the voluntary liquidation as required under Cayman Law. As a result, the third appellant presented a petition to the Cayman Grand Court for the liquidation to proceed under court supervision. The petition was allowed and the second and third appellants were appointed the Company’s joint official liquidators (“the Liquidators”).

Subsequently, the Company and the Liquidators applied for an order recognising, in Singapore, the Company’s liquidation in the Cayman Islands (“the Cayman Liquidation”) as a “foreign main proceeding” within the meaning of Art 2(f) of the Model Law (as it appears in the Insolvency, Restructuring and Dissolution Act 2018) (“the SG Model Law”).

The Court of Appeal addressed the requirement under Art 2(h) of the SG Model Law that a proceeding must be conducted under a law relating to insolvency or adjustment of debt for it to qualify as a “foreign proceeding”. The Court of Appeal approved of the “Broad Approach” – i.e., it will suffice that the relevant proceeding is conducted under a law which contains provisions relating to insolvency or adjustment of debt, even if the specific provisions governing the relevant proceeding do not deal with insolvency or adjustment of debt. Thus, there is no requirement under the SG Model Law for a company to be insolvent or in severe financial distress before a proceeding concerning that company may be recognised as a foreign proceeding under the SG Model Law. 

Applying the Broad Approach, the Court of Appeal found that the provisions under which the Cayman Liquidation was being conducted were contained within Pt V of the Companies Act (2021 Rev) (Cayman Islands) (the “Cayman Act”), which contained other provisions that dealt with the insolvency or adjustment of debt of a company. The Cayman Act also contained provisions dealing with arrangements and reconstructions. Applying the Broad Approach, the Cayman Liquidation was therefore a proceeding being conducted under a law relating to insolvency or adjustment of debt.

Read the full judgment here