Re Punj Lloyd: Scheme of Arrangement & Creditor Opposition

In Re Punj Lloyd Pte Ltd and another matter, the High Court of Singapore addressed arguments by creditors to set aside orders for meetings to consider proposed schemes of arrangement for Punj Lloyd Private Limited (PLPL) and Sembawang Engineers and Constructors Pte Ltd (SEC). The creditors raised concerns about certain transactions and disclosures. Aedit Abdullah JC declined to set aside the orders, finding no material non-disclosure or abuse of process, but emphasized the importance of fair creditor classification.

1. Case Overview

1.1 Court

High Court

1.2 Outcome

Setting aside refused

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Creditors challenged orders for scheme of arrangement meetings for Punj Lloyd Pte Ltd and Sembawang Engineers. The court refused to set aside the orders.

1.7 Decision Date

15 December 2015

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Punj Lloyd Pte Ltd	Applicant	Corporation	Orders for meetings to be held not set aside	Neutral	Patrick Ang, Low Poh Ling, Chew Xiang, Ng Kexian
Sembawang Engineers and Constructors Pte Ltd	Applicant	Corporation	Orders for meetings to be held not set aside	Neutral	Patrick Ang, Low Poh Ling, Chew Xiang, Ng Kexian
Mirador Building Contractor Pte Ltd	Respondent	Corporation	Application to set aside orders refused	Lost	Mark Yeo, Jessie Huen
SLE Power Engineering Pte Ltd	Respondent	Corporation	Application to set aside orders refused	Lost	John Lim, Eric Ng

3. Judges

Judge Name	Title	Delivered Judgment
Aedit Abdullah	JC	Yes

4. Counsels

Counsel Name	Organization
Patrick Ang	Rajah & Tann Singapore LLP
Low Poh Ling	Rajah & Tann Singapore LLP
Chew Xiang	Rajah & Tann Singapore LLP
Ng Kexian	Rajah & Tann Singapore LLP
Mark Yeo	Engelin Teh Practice LLC
Jessie Huen	Engelin Teh Practice LLC
John Lim	Malkin & Maxwell LLP
Eric Ng	Malkin & Maxwell LLP

4. Facts

PLPL and SEC sought orders for meetings to consider schemes of arrangement.
Creditors applied to set aside the orders, alleging non-disclosure and improper transactions.
SEC is a subsidiary of PLPL, which is a wholly-owned subsidiary of PLL.
PLPL owed SEC S$91.8m.
PLL redeemed preference shares held by PLL for $50m in December 2014.
A transaction involved a Malaysian subsidiary of PLPL, Punj Lloyd Oil & Gas Malaysia (PLOG).
The meetings ordered under s 210(1) were to be held in mid-January 2016.

5. Formal Citations

Re Punj Lloyd Pte Ltd, HC/Originating Summons No 857 of 2015, [2015] SGHC 321

6. Timeline

Date	Event
2015-09-18	Orders granted for meetings to be held
2015-12-03	Hearing on application to set aside order
2015-12-16	Decision date
2016-01-01	Meetings ordered under s 210(1) were to be held in mid-January 2016

7. Legal Issues

Setting Aside of Orders for Scheme of Arrangement Meetings
- Outcome: The court refused to set aside the orders, finding no material non-disclosure or abuse of process.
- Category: Procedural
- Sub-Issues:
  - Material Non-Disclosure
  - Abuse of Process
  - Fairness of Creditor Classification
- Related Cases:
  - [2012] 2 SLR 213
  - [2005] SGHC 112
Duty of Disclosure in Scheme of Arrangement Applications
- Outcome: The court found that there was no material non-disclosure that indicated impropriety.
- Category: Procedural
- Sub-Issues:
  - Materiality of Non-Disclosure
  - Impact on Creditor Classification
  - Potential Abuse of Process
- Related Cases:
  - [2005] SGHC 112
Fairness of Creditor Classification
- Outcome: The court emphasized the importance of fair creditor classification and accepted the applicant's concession to have SEC in a separate class.
- Category: Procedural
- Sub-Issues:
  - Domination by a Single Creditor
  - Separate Class for Related Creditors
- Related Cases:
  - [2012] 2 SLR 213

8. Remedies Sought

Setting aside of orders for scheme of arrangement meetings

9. Cause of Actions

Application to set aside orders for scheme of arrangement meetings

10. Practice Areas

Restructuring
Corporate Law

11. Industries

Engineering
Construction
Energy
Infrastructure

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Re Sembawang Engineers and Constructors Pte Ltd	High Court	Yes	[2015] SGHC 250	Singapore	Cited for rejecting opposition by one creditor of SEC.
The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another Appeal	Court of Appeal	Yes	[2012] 2 SLR 213	Singapore	Cited for the approach to be taken in s 210(1) applications.
Re Ng Huat Foundations Pte Ltd	High Court	Yes	[2005] SGHC 112	Singapore	Cited for the principle that the Court should not grant an application if there is no realistic prospect of approval.
Re Halley’s Departmental Store Pte Ltd	High Court	Yes	[1996] 1 SLR(R) 81	Singapore	Cited for the principle that transactions not beneficial to creditors are relevant matters to be considered.
Wah Yuen Electrical Engineering Pte Ltd v Singapore Cables Manufacturers Pte Ltd	High Court	Yes	[2003] 3 SLR(R) 629	Singapore	Cited for the obligation to provide adequate information.
United Overseas Bank Ltd v Ng Huat Foundations Pte Ltd	High Court	Yes	[2005] 2 SLR(R) 425	Singapore	Cited for material non-disclosure going to the likelihood of viability of the scheme.
The Oriental Insurance Co Ltd v Reliance National Asia Pte Ltd	High Court	Yes	[2008] 3 SLR(R) 121	Singapore	Cited to show that s 210 applies not just to creditors, but also members, and could conceivably operate in respect of wholly solvent companies.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Companies Act (Cap 50, 2006 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Scheme of Arrangement
Creditors
Non-Disclosure
Abuse of Process
Creditor Classification
Insolvency
Restructuring

15.2 Keywords

scheme of arrangement
creditors
insolvency
restructuring
Punj Lloyd
Sembawang Engineers

16. Subjects

Insolvency
Corporate Restructuring
Schemes of Arrangement

17. Areas of Law

Insolvency Law
Company Law
Schemes of Arrangement