Singapore: Recognising Foreign Insolvency Proceedings Arising In Jurisdiction Other Than The Place Of Incorporation

Last Updated: 1 November 2016
Article by Herman Jeremiah and Paul Wong


The central question in the case of  Re Opti-Medix Ltd (in liquidation) and another matter [2016] SGHC 108 (Opti-Medix) was whether insolvency proceedings in a jurisdiction other than the place of incorporation could be recognised by the Singapore court.

Ex parte applications were made for (a) the recognition of foreign insolvency proceedings and (b) the appointment of a foreign bankruptcy trustee, in respect of two companies (the Companies).

Aedit Abdullah JC (the Judge) granted the orders sought.

Background facts

  • The Companies were incorporated in the British Virgin Islands.
  • The Companies' main business concerned the factoring of receivables from medical institutions in Japan.
  • The factoring was funded by the issue of non-recourse notes, which were governed by Singapore law. The proceeds of the business were transferred into Singapore bank accounts.
  • However, the notes were only marketed in Japan using Japanese brokers.
  • Eventually, the business failed and the bankruptcy orders (the Japanese Orders) were granted by the Tokyo District Court, with the applicant in this case being appointed the Bankruptcy Trustee.
  • The majority of the largest creditors were Japanese entities or persons. There were only two Singapore creditors.
  • The Bankruptcy Trustee made the applications so as to exercise his powers under the Japanese Bankruptcy Orders to ascertain, administer and dispose of the companies' assets held in various Singapore bank accounts.

The court's decision

The court allowed the applications, citing a precedent, a Straits Settlement decision dating from 1926 (but reported in 1958), Re Lee Wah Bank [1958] 2 MC 81.

The Judge sought to restrict the effect of his decision by making it clear that the mere fact that a company is in liquidation in a particular country, does not by itself provide a basis to recognise that liquidation in Singapore. Instead, more is required before a foreign liquidation is recognised: in this case, the fact that Japan was where the bulk of the business was conducted was the determinative issue.

While it may be natural to suppose that a liquidator appointed in the place of incorporation should have primacy, this would not always be the case. In particular, the Judge sensibly noted that "the place of incorporation may be an accident of many factors, and may be far removed from the actual place of business".

The Judge highlighted the centre of main interest or COMI test as being useful in identifying where insolvency proceedings should be conducted. In the judgment, the Judge wrote that "The COMI will likely be the place where most dealings occur, most money is paid in and out, and most decisions are made. It is thus the place where the bulk of the business is carried out, and for that reason, provides a strong connecting factor to the courts there."

In applying the COMI test, the Judge suggested that it might be sensible to apply a presumption in favour of the registered office being the COMI. Nevertheless, any of such presumption would be rebutted on the facts of the present case.

Further, the Judge stated that where the interests of the forum are not adversely affected by a foreign order, the courts should lean towards recognition of the foreign insolvency proceedings.


This decision is in line with what is sometimes referred to as the Universalist trend in insolvency law.

In this respect, the Judge stated:

"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."

The effect of the Universalist trend is, in essence, "a greater readiness to go beyond traditional bases for recognising foreign insolvency proceedings". 

The Judge's decision is sensible and commercially-oriented. The traditional rule that only foreign insolvency proceedings which are also initiated in the place of incorporation ought to be recognised by a forum court, is severely outmoded.

Globalisation has resulted in an explosion of economic activity which frequently transcends national borders. International businesses often engage in commerce through a spectrum of branches, offices, subsidiaries and special purpose vehicles. The Judge's decision has accorded with the commercial realities of the 21st century in which we often find ourselves faced with a variety of eclectic business arrangements, designed to maximise advantages across multiple jurisdictions.

However, while the facts of the present case clearly weighed in favour of Japan being the COMI, one can easily envisage circumstances where the answer is not so clear-cut. In view of the sheer variety of cross-border business arrangements now prevalent across the world, the court may be faced with some difficulty at a future date, in attempting to lay down a coherent set of guidelines for the determination of the COMI in such situations.

The universalist trend in insolvency proceedings demonstrated in Opti-Medix has also surfaced in another recent decision of Aedit Abdullah JC in Re Taisoo Suk (as foreign representative of Hanjin Shipping Co Ltd) [2016] SGHC 195 (Taisoo).

In Taisoo, the applicant sought, and the court granted interim orders for the recognition of rehabilitation proceedings in Korea, and the restraint of all pending, contingent or fresh proceedings against a company. However, the test laid down for recognising foreign rehabilitation proceedings appears to be slightly distinct from the COMI test.

In particular, the Judge stated that the following factors would have to be assessed: (a) the connection of the company to the forum in which the rehabilitation proceedings are taking place and to the place of rehabilitation, (b) what the rehabilitation process entails, including its impact on domestic creditors and whether it is fair and equitable in the circumstances, and (c) whether there are any strong countervailing reasons against recognition of the foreign rehabilitation proceedings.

Nevertheless, it is of note that the decision in Taisoo applies and extends the universalist trend to insolvency proceedings, other than winding up and/or bankruptcy, such as restructuring and rehabilitation. Indeed, the Judge in Taisoo stated that "[s]uch recognition and assistance perhaps constituted a development of the common law in Singapore".

It remains to be seen in what further circumstances the universalist trend in insolvency may lie to be applied. However, insolvency practitioners would be wise to keep these important jurisprudential developments in mind when approaching cases which involve multiple jurisdictions.

Dentons Rodyk acknowledges and thanks associate Reuben Gavin Peter for his contribution in the writing of this article.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
6 Dec 2017, Webinar, New York, United States

Join Dentons for a complimentary webinar focused on the ongoing challenge of integrating new technologies into existing information governance policies and risk management frameworks.

7 Dec 2017, Seminar, Cape Town, South Africa

Dentons South Africa would be delighted if you could join us for our upcoming event.

8 Dec 2017, Seminar, Johannesburg, South Africa

Dentons South Africa would be delighted if you could join us for our upcoming event.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.