Beluga Chartering GmbH v Beluga Projects: Cross-Border Insolvency, s377(3)(c) Companies Act
The Singapore Court of Appeal addressed whether s 377(3)(c) of the Companies Act applied to Beluga Chartering GmbH (in liquidation), a German company, regarding its Singapore assets. Beluga Projects (Singapore) Pte Ltd and Beluga Chartering Asia Pte Ltd, the Singapore-incorporated subsidiaries, were the respondents. The court, with Sundaresh Menon CJ delivering the judgment, allowed the appeal, holding that s 377(3)(c) does not apply to foreign companies not registered or doing business in Singapore. The court ordered the assets remitted to the German liquidator.
1. Case Overview
1.1 Court
Court of Appeal1.2 Outcome
Appeal Allowed
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore Court of Appeal: Applicability of s 377(3)(c) Companies Act to foreign firms in liquidation without local business ties.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Chee Yoh Chuang | Appellant | Individual | Appeal Allowed | Won | |
| Beluga Chartering GmbH (in liquidation) | Appellant | Corporation | Appeal Allowed | Won | |
| Abuthahir Abdul Gafoor | Appellant | Individual | Appeal Allowed | Won | |
| Beluga Projects (Singapore) Pte Ltd (in liquidation) | Respondent | Corporation | Appeal Dismissed | Lost | Beverly Wee of Official Receiver's Office Christopher Eng of Official Receiver's Office Pruetihipunthu Tris Xavier of Official Receiver's Office |
| Beluga Chartering Asia Pte Ltd | Respondent | Corporation | Appeal Dismissed | Lost | Beverly Wee of Official Receiver's Office Christopher Eng of Official Receiver's Office Pruetihipunthu Tris Xavier of Official Receiver's Office |
| deugro (Singapore) Pte Ltd | Other | Corporation | Neutral | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Sundaresh Menon | Chief Justice | Yes |
| V K Rajah | Justice of the Court of Appeal | No |
| Judith Prakash | Judge | No |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Sim Kwan Kiat | Rajah & Tann LLP |
| Ang Siok Chen | Rajah & Tann LLP |
| Beverly Wee | Official Receiver's Office |
| Christopher Eng | Official Receiver's Office |
| Goh Yeow Kiang Victor | Baker Tilly TFW LLP |
| Pruetihipunthu Tris Xavier | Official Receiver's Office |
| Bala Chandran s/o A. Kandiah | Mallal & Namazie |
4. Facts
- Beluga Chartering GmbH, a German company, went into liquidation.
- Beluga Chartering had assets in Singapore but did not carry on business there.
- Beluga Projects (Singapore) Pte Ltd and Beluga Chartering Asia Pte Ltd are Singapore-incorporated subsidiaries of Beluga Chartering.
- deugro (Singapore) Pte Ltd owed Beluga Chartering $1,587,294.31, which was Beluga Chartering’s only asset in Singapore.
- Beluga Chartering owed deugro Singapore €502,600.
- The Singapore Subsidiaries obtained a judgment debt against Beluga Chartering.
- A winding up order was made against Beluga Chartering in Singapore.
5. Formal Citations
- Beluga Chartering GmbH (in liquidation) and others v Beluga Projects (Singapore) Pte Ltd (in liquidation) and another(deugro (Singapore) Pte Ltd, non-party), Civil Appeal No 45 of 2013, [2014] SGCA 14
- Beluga Chartering GmbH (in liquidation) v Beluga Projects (Singapore) Pte Ltd (in liquidation) and another (Deugro (Singapore) Pte Ltd, non-party), , [2013] 2 SLR 1035
6. Timeline
| Date | Event |
|---|---|
| Booking note dated for five voyages from Vietnam to Scotland | |
| Beluga Chartering placed into liquidation by the Insolvency Court of the Bremen District Court | |
| Singapore Subsidiaries filed a writ of summons in Suit No 227 of 2011 | |
| Singapore Subsidiaries obtained an injunction against Beluga Chartering | |
| Judgment in default entered against Beluga Chartering | |
| Winding up order made against Beluga Asia | |
| Winding up order made against Beluga Singapore | |
| Beluga Shipping GmbH & Co KG Ms “Beluga Persuasion” filed Companies Winding Up No 5 of 2012 | |
| High Court made an order winding up Beluga Chartering and appointed the Singapore Liquidators | |
| Decision from which this appeal arose is reported at [2013] 2 SLR 1035 | |
| Court of Appeal allowed the appeal |
7. Legal Issues
- Applicability of Section 377(3)(c) of the Companies Act
- Outcome: The court held that s 377(3)(c) did not apply to a foreign company such as Beluga Chartering, which was not registered under the Act and did not carry on business or have a place of business in Singapore.
- Category: Substantive
- Sub-Issues:
- Interpretation of 'companies' in Section 350(2)
- Condition precedent in Section 365
- Extraterritoriality of Division 2 of Part XI
- Common Law Ancillary Liquidation Doctrine
- Outcome: The court held that it had the power to direct the Singapore Liquidators to remit the realised assets of Beluga Chartering in Singapore to the German Liquidator, without first satisfying the judgment debt owed to the Singapore Subsidiaries.
- Category: Substantive
- Sub-Issues:
- Power of the court to remit assets to the principal place of liquidation
- Discretion to ring-fence local assets for locally incurred debts
- Relationship between common law and statutory framework
- Effect of Foreign Insolvency Proceedings on Claims Before the Singapore Court
- Outcome: The court observed that Singapore courts are not bound by any stay of legal proceedings that flows from a foreign winding up order in the absence of local winding up proceedings, but it remains open to the courts to assist the foreign liquidation proceedings by exercising their inherent discretion to stay proceedings.
- Category: Procedural
- Sub-Issues:
- Recognition of the title of the foreign liquidator
- Recognition of foreign winding up proceedings
- Extraterritorial effect of a statutory moratorium
8. Remedies Sought
- Determination of questions of law
- Repatriation of assets
- Winding up order
9. Cause of Actions
- Winding up
- Breach of Contract
10. Practice Areas
- Commercial Litigation
- Insolvency
- Liquidation
11. Industries
- Shipping
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Beluga Chartering GmbH (in liquidation) v Beluga Projects (Singapore) Pte Ltd (in liquidation) and another (Deugro (Singapore) Pte Ltd, non-party) | High Court | Yes | [2013] 2 SLR 1035 | Singapore | The Judge’s decision is reported as Beluga Chartering GmbH (in liquidation) v Beluga Projects (Singapore) Pte Ltd (in liquidation) and another (Deugro (Singapore) Pte Ltd, non-party) [2013] 2 SLR 1035 (“the GD”) |
| RBG Resources plc (in liquidation) v Credit Lyonnais | High Court | Yes | [2006] 1 SLR(R) 240 | Singapore | High Court had previously reached a different conclusion on the meaning of the word “companies” in s 350(2) |
| In re English, Scottish, and Australian Chartered Bank | Chancery Division | Yes | [1893] 3 Ch 385 | England and Wales | Cited for the common law ancillary liquidation doctrine |
| In re Commercial Bank of South Australia | Chancery Division | Yes | (1886) 33 Ch D 174 | England and Wales | Cited as authority for the ancillary liquidation doctrine |
| Re Alfred Shaw & Co Ltd ex parte Mackenzie | Supreme Court of Queensland | Yes | (1897) 8 QLJ 93 | Australia | Cited as authority for the ancillary liquidation doctrine |
| Re National Benefit Assurance Co | Unknown | Yes | [1927] 3 DLR 289 | Canada | Cited as authority for the ancillary liquidation doctrine |
| In re Bank of Credit and Commerce International SA (No 10) | High Court | Yes | [1997] 1 Ch 213 | England and Wales | Cited for the common law ancillary liquidation doctrine |
| In re HIH Casualty and General Insurance Ltd | House of Lords | Yes | [2008] 1 WLR 852 | England and Wales | Cited for the common law ancillary liquidation doctrine |
| Re Lee Wah Bank Ltd | High Court | Yes | [1926] MC 5 | Singapore | Cited for recognising the ancillary liquidation doctrine as part of Singapore law |
| Cambridge Gas Transportation Corpn v Official Committee of Unsecured Creditors of Navigator Holdings plc and others | Privy Council | Yes | [2007] 1 AC 508 | England and Wales | Case on different aspects of cross-border insolvency |
| Rubin and another v Eurofinance SA and others | Court of Appeal | Yes | [2011] 1 Ch 133 | England and Wales | Case on different aspects of cross-border insolvency |
| Rubin and another v Eurofinance SA and others (Picard and others intervening) | Supreme Court | Yes | [2013] 1 AC 236 | England and Wales | Case on different aspects of cross-border insolvency |
| In re Alitalia Linee Aeree Italiane SpA | High Court | Yes | [2011] 1 WLR 2049 | England and Wales | Case on the common law power to direct remittal of assets to a foreign liquidator |
| In re Oriental Inland Steam Co; Ex p Scinde Railway Co | Court of Appeal | Yes | LR 9 Ch App 557 | England and Wales | Cited for the principle that a statutory moratorium on legal proceedings does not generally have extraterritorial effect |
| In re Vocalion (Foreign), Limited | Chancery Division | Yes | [1932] 2 Ch 196 | England and Wales | Cited for the principle that a statutory moratorium on legal proceedings does not generally have extraterritorial effect |
| Banque Indosuez SA v Ferromet Resources Inc | Unknown | Yes | [1993] BCLC 112 | England and Wales | Cited for the principle that a court would not recognise the jurisdiction of a foreign legislature to impose a stay on proceedings in the forum court |
| Firswood Ltd v Petra Bank | Court of Appeal | Yes | [1996] CLC 608 | England and Wales | Case regarding an attempt to obtain a judgment against an insolvent Jordanian bank in England |
| Felixstowe Dock & Railway Co v United States Lines Inc | Queen's Bench Division | Yes | [1989] QB 360 | England and Wales | Case regarding Chapter 11 proceedings in the United States and Mareva injunctions in England |
| In Re Suidair International Airways Ld (application of Vickers-Armstrong, Ld) | Chancery Division | Yes | [1951] 1 Ch 165 | England and Wales | Case regarding a provisional winding up order in South Africa and garnishee proceedings in England |
| Modern Terminals (Berth 5) Ltd v States Steamship Company | High Court | Yes | [1979] HKLR 512 | Hong Kong | Case regarding Chapter 11 proceedings and a stay of proceedings in Hong Kong |
| Galbraith v Grimshaw and another | House of Lords | Yes | [1910] AC 508 | England and Wales | Cited for the principle of universal distribution of a bankrupt’s effects |
| CCIC Finance Ltd v Guangdong International Trust & Investment Corporation | Unknown | Yes | [2005] 2 HKC 589 | Hong Kong | Case regarding a garnishee order and a stay of proceedings in Hong Kong |
| Hong Kong Institute of Education v Aoki Corporation | Unknown | Yes | [2004] 2 HKLRD 760 | Hong Kong | Case regarding a civil rehabilitation and a stay of execution in Hong Kong |
| Turners & Growers Exporters Ltd v The ship "Cornelis Verolme" | High Court | Yes | [1997] 2 NZLR 110 | New Zealand | Case regarding stays of proceedings when there is a pending foreign winding up order |
| Cunard Steamship Company Limited v Salen Reefer Services AB | United States Court of Appeals, Second Circuit | Yes | 773 F 2d 452 | United States | Case regarding stays of proceedings when there is a pending foreign winding up order |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 377(3)(c) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 368 | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 350(2) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 351(1) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 4(1) | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 365 | Singapore |
| Companies Act (Cap 50, 2006 Rev Ed) s 366 | Singapore |
| Companies Act (Cap 50, 1967 Rev Ed) s 329 | Singapore |
| Companies Act (Cap 50, 1967 Rev Ed) s 332 | Singapore |
| Companies (Amendment) Act 1984 (Act 15 of 1984) | Singapore |
| Companies (Amendment) Bill (No 9 of 1986) | Singapore |
| Companies (Amendment) Act 1987 (Act 13 of 1987) | Singapore |
| Companies Act 1961 (No 6839 of 1961) (Vic) s 314(2) | Australia |
| United Kingdom Companies Act 1948 (c 38) s 404 | United Kingdom |
| Insolvency Act 1986 (c 45) s 426(4) | United Kingdom |
| Insolvency Act 1986 (c 45) s 426(5) | United Kingdom |
15. Key Terms and Keywords
15.1 Key Terms
- Liquidation
- Foreign company
- Ring-fencing provision
- Ancillary liquidation doctrine
- Modified universalism
- Extraterritoriality
- Pari passu distribution
- Stay of proceedings
- Judgment debt
- Singapore Liquidators
- German Liquidator
- Unregistered company
15.2 Keywords
- Liquidation
- Foreign Company
- Companies Act
- Singapore
- Cross-Border
- Insolvency
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Insolvency Law | 90 |
| Company Law | 70 |
| Civil Procedure | 30 |
| Foreign Law | 25 |
16. Subjects
- Insolvency
- Company Law
- Cross-Border Insolvency
- Statutory Interpretation