Azman v Saag Oilfield: Scheme of Arrangement & Extinguishment of Tort Claims

In Azman bin Kamis v Saag Oilfield Engineering (S) Pte Ltd, the Singapore High Court addressed whether a completed scheme of arrangement extinguishes the causes of action of plaintiffs Azman and Shaik, who suffered industrial accidents but did not participate in the scheme. The court held that the scheme did not bar their claims, as the scheme's purpose is to facilitate corporate rehabilitation, not to extinguish insured claims that have no substantive effect on the company's assets. The court ruled in favor of the plaintiffs, allowing them to maintain their suits against the company.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Plaintiff's causes of action have not been extinguished, barred, or precluded.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

The High Court held that a scheme of arrangement does not extinguish insured tort claims of non-participating claimants after its termination.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Shaik Abu Bakar Bin Abdul SukolPlaintiffIndividualJudgment for PlaintiffWon
SAAG Oilfield Engineering (S) Pte Ltd (formerly known as Derrick Services Singapore Pte Ltd)DefendantCorporationJudgment Against DefendantLost
Azman bin KamisPlaintiffIndividualJudgment for PlaintiffWon

3. Judges

Judge NameTitleDelivered Judgment
Philip PillaiJudgeYes

4. Counsels

Counsel NameOrganization
Krishna MorthyS K Kumar & Associates
Hong Heng LeongAng & Partners
Tito IsaacTito Isaac & Co LLP
Ho Seng GiapTito Isaac & Co LLP
Ramasamy K ChettiarAcies Law LLC
Mohammed Nasser IsmailMd Nasser Ismail & Co

4. Facts

  1. Azman suffered injuries in an industrial accident on 14 August 2007.
  2. Shaik suffered injuries in an industrial accident on 4 February 2008.
  3. The company entered into a scheme of arrangement.
  4. Azman and Shaik did not submit proofs of debt by the claims cut-off date.
  5. The company had a valid insurance policy covering the plaintiffs’ claims.
  6. The scheme was completed and terminated on 4 May 2009.
  7. Azman and Shaik filed writs for damages after the scheme's termination.

5. Formal Citations

  1. Azman bin Kamis v Saag Oilfield Engineering (S) Pte Ltd (formerly known as Derrick Services Singapore Pte Ltd), Suit No 183 of 2010 (Summons No 2768 of 2010), [2011] SGHC 181

6. Timeline

DateEvent
Azman bin Kamis suffered injuries due to an industrial accident.
Plaintiff's solicitors requested the defendant's industrial accident report.
Ministry of Manpower requested Azman's medical report.
Shaik Abu Bakar bin Abdul Sukol suffered injuries due to an industrial accident.
Company filed an accident report with the Ministry of Manpower.
Company went into provisional liquidation.
Azman filed a claim under the Workmen’s Compensation Act.
Investment agreement signed between the Company, SAAG (S) Pte Ltd, Deradmin and the administrators of Deradmin.
Scheme's meeting of creditors was advertised in The Straits Times.
Scheme of Compromise and Arrangement dated.
Meeting convened to consider the Scheme.
Notice issued and advertised in The Straits Times of a court hearing.
Shaik submitted original medical bills to the Scheme Manager.
Court approved the Scheme.
Scheme took effect.
Shaik received notification that the court had approved the Scheme.
Ministry of Manpower issued a notice of assessment of compensation.
Claims Cut-Off Date.
Scheme Manager issued a cheque to Shaik in full and final settlement.
Shaik gave notice to the Ministry of Manpower of his intention to proceed with a claim under common law and withdrew his Workmen’s Compensation Act claim.
Scheme was terminated by the Scheme’s manager.
Shaik commenced suit against the first and second defendants.
Azman's solicitors informed the Ministry of Manpower that Azman had decided to pursue his claim for damages under common law.
Azman filed a writ for breach of employers’ duty and breach of statutory duty.
Judgment reserved.
Appeals allowed by the Court of Appeal.

7. Legal Issues

  1. Extinguishment of Claims by Scheme of Arrangement
    • Outcome: The court held that the scheme of arrangement did not extinguish the plaintiffs' causes of action.
    • Category: Substantive
    • Sub-Issues:
      • Effect of scheme on unproven claims
      • Definition of 'creditor' under scheme
      • Impact of insurance coverage on company liability
  2. Breach of Employers’ Duty
    • Outcome: The court did not make a determination on the merits of the breach of employers’ duty claim.
    • Category: Substantive

8. Remedies Sought

  1. Monetary Damages

9. Cause of Actions

  • Breach of Employers’ Duty
  • Breach of Statutory Duty
  • Negligence

10. Practice Areas

  • Commercial Litigation
  • Insolvency
  • Personal Injury

11. Industries

  • Oilfield Engineering

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
The Oriental Insurance Co Ltd v Reliance National Asia Re Pte LtdCourt of AppealYes[2008] 3 SLR(R) 121SingaporeCited for the purpose and function of schemes of arrangement under the Companies Act.
SEA Assets Limited v Perusahaan Perseroan (Persero) PT Perusahaan Penerbangan Garuda IndonesiaEngland and Wales Court of Appeal (Civil Division)YesSEA Assets Limited v Perusahaan Perseroan (Persero) PT Perusahaan Penerbangan Garuda Indonesia [2001] EWCA Civ 1696England and WalesCited for outlining the scope and procedural object of schemes of arrangements or compromises.
In re T & N Ltd and othersHigh Court of JusticeYesIn re T & N Ltd and others [2006] 1 WLR 1728United KingdomCited for describing the purposes of a scheme of arrangement.
Pacrim Investments Pte Ltd v Tan Mui Keow Claire and anotherHigh CourtYesPacrim Investments Pte Ltd v Tan Mui Keow Claire and another [2010] SGHC 134SingaporeCited for a summary of the relevant case law on the meaning of the word “creditors” in s 210(3) of the Companies Act.
Re Glendale Land Development (in liq)Supreme CourtYesRe Glendale Land Development (in liq) (1982) ACLC 562AustraliaCited for the view that “creditors” may refer to all persons who have claims which may be admitted to proof in the winding up of the company.
Re Huon Valley Springs Pty Ltd (Receivers and Managers appointed)Supreme CourtYesRe Huon Valley Springs Pty Ltd (Receivers and Managers appointed) (1986) 10 ACLR 883AustraliaCited for the view that “creditors” may refer to all persons who have claims which may be admitted to proof in the winding up of the company.
Trocko v Renlita Products Pty Ltd; The Commonwealth Trading Bank and Shepherd (Claimants)Supreme CourtYesTrocko v Renlita Products Pty Ltd; The Commonwealth Trading Bank and Shepherd (Claimants) [1973] 5 SASR 207AustraliaCited for the case law to the effect that such claimants are not creditors.
In re Waymouth Guarantee and Discount CoSupreme CourtYesIn re Waymouth Guarantee and Discount Co [1975] 10 SASR 407AustraliaCited for the case law to the effect that such claimants are not creditors.
Re R L Child & Co Pty LtdSupreme CourtYesRe R L Child & Co Pty Ltd (1986) 10 ACLR 673AustraliaCited for the case law to the contrary as well.
Smith v Carr and othersSupreme CourtYesSmith v Carr and others (1993) 10 ACSR 427AustraliaCited for the construction of the scheme document held that an unliquidated tort claimant was not a creditor bound by a scheme of arrangement.
Ying Tai Plastic & Metal Manufacturing (S) Pte Ltd v Zahrin bin RabuHigh CourtYesYing Tai Plastic & Metal Manufacturing (S) Pte Ltd v Zahrin bin Rabu [1983-1984] SLR(R) 212SingaporeCited for the point that merely making his WCA Claim does not abrogate his common law claims and that he is entitled to withdraw his application and pursue his common law claims in court.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed) s 210Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 210Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 210Singapore
Rules of Court (Cap 322, R 5, 2006 Rev Ed) O 14, r 12Singapore
Bankruptcy Act (Cap 20, 2009 Rev Ed) s 87(1)Singapore
Companies Act (Cap 50, 2006 Rev Ed) s 327(2)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Scheme of Arrangement
  • Scheme Creditor
  • Scheme Claim
  • Claims Cut-Off Date
  • Proof of Debt
  • Liability
  • Insured Claim
  • Unliquidated Damages
  • Workmen’s Compensation Act

15.2 Keywords

  • Scheme of Arrangement
  • Tort Claims
  • Insolvency
  • Companies Act
  • Creditors' Rights

17. Areas of Law

Area NameRelevance Score
Industrial Accident90
Scheme of Arrangement85
Insolvency Law80
Work Injury Compensation75
Company Law65
Personal Injury60
Contract Law30
Breach of Contract25

16. Subjects

  • Corporate Law
  • Insolvency
  • Civil Procedure