Abcom Pte Ltd v TransAsia Private Capital Ltd: Injunction Against Winding Up Application & Moneylenders Act
Abcom Pte Ltd sought an injunction in the General Division of the High Court of Singapore to restrain TransAsia Private Capital Ltd and TA Private Capital Security Agent Limited from bringing a winding up application against it, arguing that the debt was disputed in good faith and on substantial grounds and that the underlying loan transaction was unenforceable under the Moneylenders Act. Justice Philip Jeyaretnam dismissed the application on 27 July 2023, finding that Abcom failed to raise triable issues concerning the debt. The court rejected Abcom's defenses of frustration, illegal moneylending, and moratorium, concluding that Abcom did not genuinely dispute the debt in good faith.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Application dismissed.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court dismisses Abcom's application to restrain TransAsia from winding up, finding no genuine dispute over debt or illegal moneylending.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Abcom Pte Ltd | Claimant | Corporation | Application dismissed | Lost | Liew Teck Huat |
| TransAsia Private Capital Limited | Defendant | Corporation | Won | Won | Chan Cong Yen, Lionel (Chen Congren), Chang Guo En Nicholas Winarta Chandra |
| TA Private Capital Security Agent Limited | Defendant | Corporation | Won | Won | Chan Cong Yen, Lionel (Chen Congren), Chang Guo En Nicholas Winarta Chandra |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Philip Jeyaretnam | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Liew Teck Huat | Niru & Co LLC |
| Chan Cong Yen | Oon & Bazul LLP |
| Lionel (Chen Congren) | Oon & Bazul LLP |
| Chang Guo En Nicholas Winarta Chandra | Oon & Bazul LLP |
4. Facts
- Abcom is a Singapore company.
- TransAsia Capital is a Hong Kong company and the manager of the Asian Trade Finance Fund.
- TA Capital is the security agent for TransAsia Capital.
- Abcom was the borrower under a facility agreement dated 13 August 2019.
- The parties entered into an amended facility agreement dated 14 March 2022.
- Abcom acknowledged an outstanding principal of US$12,374,888.65 and outstanding interest, fees, and charges of US$1,050,420.42 as of 25 February 2022.
- The facility was for the purpose of financing commodity trading undertaken by Abcom.
- Abcom experienced repayment difficulties due to international events including COVID-19 and the London Metal Exchange crisis.
- Abcom requested a six-month moratorium on payments.
- The defendants neither accepted nor rejected the moratorium request.
- Abcom resumed paying monthly installments from February 2023 onwards.
- The defendants threatened legal proceedings and issued a statutory demand.
5. Formal Citations
- Abcom Pte Ltd v TransAsia Private Capital Ltd and another, Originating Application No 261 of 2023, [2023] SGHC 242
6. Timeline
| Date | Event |
|---|---|
| ATFF-ABCOM FA facility agreement dated | |
| Amended ATFF-ABCOM FA facility agreement dated | |
| Abcom emailed the defendants requesting a six-month moratorium | |
| In-person meeting to discuss the best way to move forward | |
| Defendants threatened to commence legal proceedings by letters | |
| Defendants threatened to commence legal proceedings by letters | |
| Statutory demand issued | |
| Abcom filed proceedings to restrain the defendants from bringing a winding up application against it | |
| Application dismissed | |
| Claimant appealed | |
| Judgment Date |
7. Legal Issues
- Restraint of Winding Up Application
- Outcome: The court held that Abcom could not raise triable issues concerning the timing of the repayment of the debt and did not genuinely dispute the debt in good faith.
- Category: Procedural
- Sub-Issues:
- Dispute of debt in good faith
- Substantial grounds for dispute
- Enforceability of Loan Transaction under Moneylenders Act
- Outcome: The court held that the loan was not in violation of the Moneylenders Act as the lender lent solely to corporations, and the presence of a personal guarantee did not alter this.
- Category: Substantive
- Frustration of Contract
- Outcome: The court held that the doctrine of frustration was misconceived as it discharges the contract entirely and cannot be invoked to excuse a period of non-payment.
- Category: Substantive
8. Remedies Sought
- Injunction to restrain bringing of winding up application
9. Cause of Actions
- Breach of Contract
- Winding Up
10. Practice Areas
- Commercial Litigation
- Insolvency Litigation
11. Industries
- Finance
- Commodity Trading
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Metalform Asia Pte Ltd v Holland Leedon Pte Ltd | Court of Appeal | Yes | [2007] 2 SLR(R) 268 | Singapore | Cited for the principle that the court will enjoin a person from bringing a winding up application where the debt is disputed in good faith and on substantial grounds. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Moneylenders Act 2008 | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Winding up application
- Statutory demand
- Moneylenders Act
- Moratorium
- Good faith
- Substantial grounds
- Forbearance
- Trade finance
- Illegal moneylending
- Frustration
15.2 Keywords
- Winding up
- Injunction
- Moneylenders Act
- Debt dispute
- Insolvency
- Singapore
- Commercial litigation
16. Subjects
- Insolvency Law
- Credit and Security
- Remedies
17. Areas of Law
- Insolvency Law
- Credit and Security
- Winding-up
- Injunctions