Oriental Insurance v Reliance National Asia Re: Scheme of Arrangement & Creditor's Proof of Debt

The Oriental Insurance Co Ltd, a creditor of Reliance National Asia Re Pte Ltd, applied to the High Court of Singapore for an extension of time to submit its Proof of Debt pursuant to a Scheme of Compromise and Arrangement. The High Court, presided over by Judith Prakash J, dismissed the application, holding that it lacked jurisdiction to extend the time period after the court had already approved the scheme of arrangement under Section 210 of the Companies Act.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Application dismissed.

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Oriental Insurance's application for an extension to file proof of debt under Reliance National Asia Re's scheme of arrangement was dismissed due to lack of jurisdiction.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
The Oriental Insurance Co LtdApplicant, CreditorCorporationApplication dismissedLost
Reliance National Asia Re Pte LtdRespondentCorporationApplication dismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Judith PrakashJudgeYes

4. Counsels

Counsel NameOrganization
Palaniappan SStraits Law Practice LLC
Ashok KumarAllen & Gledhill LLP
Margaret LingAllen & Gledhill LLP

4. Facts

  1. Oriental is a creditor of Reliance with a claim for US$19,031,656.
  2. Reliance entered into a Scheme of Compromise and Arrangement with its creditors.
  3. The Scheme required creditors to file their Proofs of Debt on or before 14 May 2007.
  4. Oriental voted in favor of the Scheme.
  5. The High Court sanctioned the Scheme on 7 November 2006.
  6. Reliance sent reminders to Oriental about the Claims Cut-Off date.
  7. Oriental failed to submit its Proof of Debt by the Claims Cut-Off date.

5. Formal Citations

  1. Re Reliance National Asia Re Pte Ltd, OS 986/2006, SUM 3905/2007, [2007] SGHC 206

6. Timeline

DateEvent
Reliance National Asia Re Pte Ltd incorporated.
Reliance National Asia Re Pte Ltd experienced financial difficulties.
Reliance National Asia Re Pte Ltd put a voluntary run-off in place.
Reliance sent a letter to its creditors, including Oriental, informing them about the Scheme.
Reliance applied to the High Court for permission to convene the creditors’ meeting.
Court ordered a meeting of the Scheme Creditors to be convened.
Reliance sent the Notice of Meeting, Explanatory Statement of the Scheme, and the Scheme to Oriental.
Oriental sent the completed Voting Form and Proxy Form to Reliance.
The Court Meeting was held.
Reliance applied to the High Court for the Scheme to be sanctioned.
Reliance sent a letter to Oriental notifying them that Reliance had applied to the High Court for the Scheme to be sanctioned.
The High Court sanctioned the Scheme.
Reliance wrote to Oriental and informed Oriental that the Scheme had been sanctioned.
Reliance sent an email reminder to Oriental to submit its Proof of Debt before 14 May 2007.
Reliance sent an email reminder to Oriental to submit its Proof of Debt before 14 May 2007.
Reliance sent an email reminder to Oriental to submit its Proof of Debt before 14 May 2007.
Reliance sent an email reminder to Mr M K Jindal of Oriental to submit its Proof of Debt before 14 May 2007.
Reliance sent an email reminder to Mr M K Jindal of Oriental to submit its Proof of Debt before 14 May 2007.
Reliance sent an email reminder to Mr M K Jindal of Oriental to submit its Proof of Debt before 14 May 2007.
Claims Cut-Off date.
Oriental sent a letter to the Scheme Manager and requested further information on the procedure relating to the submission of monetary claims.
Oriental applied for a three-week extension of time to file its Proof of Debt under the Scheme.
Decision date.

7. Legal Issues

  1. Jurisdiction to Extend Time for Filing Proof of Debt
    • Outcome: The court held that it lacked jurisdiction to extend the time period for a creditor to file its proof of debt after the court had granted its approval for a scheme of arrangement.
    • Category: Jurisdictional
    • Related Cases:
      • [1998] 1 WLR 271

8. Remedies Sought

  1. Extension of time to file Proof of Debt

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Commercial Litigation
  • Insolvency
  • Restructuring

11. Industries

  • Insurance
  • Reinsurance

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Re Hawk Insurance Co LtdNot specifiedYes[2002] BCC 300England and WalesCited for the three stages by which a scheme of arrangement becomes binding on the company and its members and/or creditors.
Re Anglo-Continental Supply Co LtdNot specifiedYes[1922] 2 Ch 723England and WalesCited for the court's concern to ensure that the statutory provisions have been complied with.
Chew Eu Hock Construction Co Pte Ltd v Central Provident Fund BoardHigh CourtYes[2003] SGHC 199SingaporeCited for the principle that creditors should raise objections before the court sanctions the scheme.
Kempe v Ambassador InsurancePrivy CouncilYes[1998] 1 WLR 271BermudaCited for the principle that a scheme operates as a statutory contract and the court cannot alter the substance of the scheme.
In re Garner’s Motors LtdNot specifiedYes[1937] Ch. 594England and WalesCited to support the view that the statute gives binding force to the scheme.
Devi v People’s Bank of Northern India LtdNot specifiedYes[1938] 4 All E.R. 377IndiaCited to support the view that the statute gives binding force to the scheme.
Daewoo Singapore Pte Ltd v CEL Tractors Pte LtdCourt of AppealYes[2001] 4 SLR 35SingaporeCited for the principle that a scheme sanctioned by the court operates as a statutory contract imposed by law.
Wangsini Sdn Bhd v Grand United Holdings BhdNot specifiedYes[1998] 5 MLJ 345MalaysiaCited for the principle that a scheme sanctioned by the court operates as a statutory contract imposed by law.
Re Universal Dockyard LtdNot specifiedYes[2003] HKCU 407Hong KongKempe followed in Hong Kong.
Caratti v HillmanSupreme Court of Western AustraliaYes[1974] WAR 92AustraliaCited as an example of the Australian courts' view that a sanctioned scheme operated as an order of court.
Ray Brooks Pty Ltd v New South Wales Grains Board (No 2)Supreme Court of New South WalesYes[2002] NSWSC 1175AustraliaCited as an example of the Australian courts' view that a sanctioned scheme operated as an order of court.
In Re Guardian Assurance CoNot specifiedYes[1917] Ch 431England and WalesCited for the principle that statutory provisions make up for the absence of individual agreement by every member of the class.
Re The British Aviation Insurance Co LtdNot specifiedYes[2005] EWHC 1621 (Ch)England and WalesCited for the principle that the court is not a mere rubber stamp.
Re English Scottish and Australian Chartered BankNot specifiedYes[1893] 3 Ch 385England and WalesCited for the principle that the court should be slow to differ from the commercial judgment of the creditors.
Re Hawk Insurance Co LtdNot specifiedYes[2001] EWCA Civ 241England and WalesCited for the principle that the court's jurisdiction is limited to sanctioning the scheme approved by the creditors.
Fletcher v Royal Automobile Club LtdNot specifiedYes[2000] 1 BCLC 331England and WalesCited for the principle that a court sanctioned scheme may be set aside where consent to it has been obtained by fraud.
Re Forklift Sales (SA) Pte LtdNot specifiedYes3 SASR 21AustraliaCited for the principle that an amendment to time limits set out in a scheme constitutes a material alteration.
Re Elliott’s MF Services Pty LtdNot specifiedYes[1965] VR 756AustraliaCited for the principle that an original scheme may be amended by another scheme approved by the court.
BTS Bearing Pty Ltd v Transmission Supplies Pty LtdNot specifiedYes(1983) 8 ACLR 287AustraliaCited for the principle that the court cannot amend an approved scheme without an amending scheme.
Devi v People’s Bank of Northern IndiaPrivy CouncilYes[1938] 4 All ER 337IndiaCited for the principle that an amended scheme was later sanctioned by the court and was held by the Privy Council to be binding.
Re AGL Gas NetworksNot specifiedYes37 ACSR 441AustraliaDistinguished on its facts as the court there was considering a rather different fact situation.

13. Applicable Rules

Rule Name
O 3 r 4 of the Rules of Court (Cap 322, R 5, 2006 Rev Ed)

14. Applicable Statutes

Statute NameJurisdiction
Section 210 Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Scheme of Arrangement
  • Proof of Debt
  • Claims Cut-Off Date
  • Scheme Creditor
  • Sanctioned Scheme
  • Statutory Contract

15.2 Keywords

  • Scheme of Arrangement
  • Proof of Debt
  • Creditor
  • Insolvency
  • Singapore
  • Companies Act

17. Areas of Law

Area NameRelevance Score
Schemes of Arrangement85
Company Law70
Bankruptcy30
Contract Law20

16. Subjects

  • Schemes of Arrangement
  • Insolvency
  • Creditor Claims