Zetta Jet Pte Ltd: Cross-Border Insolvency & Recognition of US Bankruptcy Proceedings
The Singapore High Court heard an application by Jonathan D. King, the Chapter 7 Trustee of Zetta Jet Pte Ltd and Zetta Jet USA, Inc, for recognition of US bankruptcy proceedings in Singapore. Asia Aviation Holdings Pte Ltd intervened, arguing against recognition. The court granted limited recognition to the Chapter 7 Trustee for the purpose of applying to set aside or appeal the Singapore injunction, citing concerns about undermining the administration of justice if the injunction were ignored. The court reserved judgment on the broader issue of recognition pending the outcome of proceedings related to the injunction.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Limited recognition granted to the Chapter 7 Trustee for the purpose of applying to set aside or appeal the Singapore injunction.
1.3 Case Type
Insolvency
1.4 Judgment Type
Judgment
1.5 Jurisdiction
Singapore
1.6 Description
Singapore High Court addresses recognition of US Chapter 7 bankruptcy proceedings for Zetta Jet, focusing on COMI and public policy.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Zetta Jet Pte. Ltd | Applicant | Corporation | Limited Recognition Granted | Partial | Tan Mei Yen, Ng Wei Long |
| Zetta USA, INC | Applicant | Corporation | Limited Recognition Granted | Partial | Tan Mei Yen, Ng Wei Long |
| Jonathan D. King | Applicant | Individual | Limited Recognition Granted | Partial | Tan Mei Yen, Ng Wei Long |
| Asia Aviation Holdings Pte Ltd | Intervener | Corporation | Partial Loss | Partial | N. Sreenivasan SC, Rajaram Muralli Raja, Jerrie Tan Qiu Lin, Kyle Gabriel Peters |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Aedit Abdullah | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Tan Mei Yen | Oon & Bazul LLP |
| Ng Wei Long | Oon & Bazul LLP |
| N. Sreenivasan SC | Straits Law Practice LLC |
| Rajaram Muralli Raja | Straits Law Practice LLC |
| Jerrie Tan Qiu Lin | Straits Law Practice LLC |
| Kyle Gabriel Peters | Straits Law Practice LLC |
4. Facts
- Zetta Jet Singapore is a company incorporated in Singapore.
- Zetta Jet USA, Inc is a company organized under the laws of the State of California and is wholly owned by Zetta Jet Singapore.
- Jonathan D. King is the Chapter 7 Trustee of Zetta Jet Singapore and Zetta Jet USA.
- Asia Aviation Holdings Pte Ltd is a shareholder of Zetta Jet Singapore.
- Voluntary Chapter 11 bankruptcy proceedings were filed against the Zetta Entities in the US Bankruptcy Court on 15 September 2017.
- AAH and TGGL commenced Suit No 864 of 2017 in the High Court of Singapore against Seagrim, Walter and Zetta Jet Singapore for commencing the Chapter 11 proceedings in alleged breach of the SHA.
- AAH and TGGL obtained an injunction order from the High Court of Singapore which enjoined Zetta Jet Singapore, Seagrim and Walter from carrying out any further steps in and relating to the bankruptcy filings relating to Zetta Jet Singapore and Zetta Jet USA in the US Bankruptcy Court.
5. Formal Citations
- Re: Zetta Jet Pte Ltd and Others, , [2018] SGHC 16
6. Timeline
| Date | Event |
|---|---|
| Subscription incorporating Shareholders’ Agreement was signed. | |
| Voluntary Chapter 11 bankruptcy proceedings were filed against the Zetta Entities in the US Bankruptcy Court. | |
| Suit No 864 of 2017 was commenced in the High Court of Singapore by AAH and TGGL against Seagrim, Walter and Zetta Jet Singapore. | |
| AAH and TGGL obtained an injunction order from the High Court of Singapore. | |
| TGGL discontinued its action in Suit No 864 of 2017. | |
| Jonathan D. King, was appointed the Chapter 11 Trustee of the Zetta Entities in the US bankruptcy proceedings. | |
| The Chapter 11 proceedings were converted to Chapter 7 proceedings. | |
| Jonathan D. King was appointed the Chapter 7 Trustee in the Chapter 7 proceedings. | |
| The US Bankruptcy Court authorised the Chapter 7 Trustee to commence recognition proceedings in Singapore. | |
| The Chapter 7 Trustee brought this application. | |
| High Court hearing. | |
| Judgment reserved. |
7. Legal Issues
- Recognition of Foreign Insolvency Proceedings
- Outcome: The court granted limited recognition to the Chapter 7 Trustee for the purpose of applying to set aside or appeal the Singapore injunction, finding that general recognition would undermine the administration of justice due to non-compliance with a Singapore court order.
- Category: Substantive
- Sub-Issues:
- Determination of Centre of Main Interests (COMI)
- Public policy exception to recognition
- Public Policy Exception
- Outcome: The court held that recognizing the Chapter 7 Trustee despite the breach of the Singapore injunction would undermine the administration of justice, thus triggering the public policy exception to recognition.
- Category: Substantive
- Sub-Issues:
- Enforcement of Singapore court orders
- Integrity of the administration of justice
- Determination of Centre of Main Interests (COMI)
- Outcome: The court did not make a definitive finding on the COMI but was satisfied that Zetta Jet Singapore had an establishment in the US, which is a basis for limited recognition of the US proceedings as a foreign non-main proceeding. The court allowed parties to revisit the question of COMI subsequently.
- Category: Jurisdictional
8. Remedies Sought
- Recognition of foreign insolvency proceedings
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Cross-Border Insolvency
- Bankruptcy Law
11. Industries
- Aviation
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Hartford Computer Hardware, Inc. (Re) | Ontario Superior Court of Justice | Yes | Hartford Computer Hardware, Inc. (Re) 2012 ONSC 964 | Canada | The case was referenced in further submissions regarding the interpretation of Article 6 of the Singapore Model Law, but the court found that it did not assist in the present context. |
| In re Gold and Honey Ltd | US Bankruptcy Court of the Eastern District of New York | Yes | In re Gold and Honey Ltd 410 BR 357 (2009) | United States | Cited as an example where a US court denied recognition of a foreign insolvency proceeding due to a violation of the automatic stay in the US, illustrating the principle that recognition should not reward violation of court orders. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Section 354B of the Companies Act (Cap. 50) | Singapore |
| Tenth Schedule of the Companies Act (Cap. 50) | Singapore |
| UNCITRAL Model Law on Cross-Border Insolvency (30 May 1997) | N/A |
| Article 15 of the UNCITRAL Model Law on Cross-Border Insolvency | N/A |
| Article 6 of the UNCITRAL Model Law on Cross-Border Insolvency | N/A |
| Article 16 of the Singapore Model Law | Singapore |
| Article 17 of the Singapore Model Law | Singapore |
| Article 2(d) | N/A |
15. Key Terms and Keywords
15.1 Key Terms
- Cross-border insolvency
- Chapter 7 Trustee
- Chapter 11 proceedings
- Chapter 7 proceedings
- Singapore injunction
- Centre of Main Interests (COMI)
- Public policy exception
- Foreign main proceeding
- Foreign non-main proceeding
15.2 Keywords
- Cross-border insolvency
- Recognition
- Bankruptcy
- Singapore
- United States
- UNCITRAL Model Law
- Injunction
16. Subjects
- Insolvency
- Bankruptcy
- Company Law
- International Law
17. Areas of Law
- Insolvency Law
- Cross-border insolvency
- Recognition of foreign insolvency proceedings