X Diamond Capital Pte Ltd v Metech International Ltd: Judicial Management Order Application

X Diamond Capital Pte Ltd applied for a judicial management order, opposed by Metech International Limited, a creditor. The High Court of Singapore, General Division, granted the order on 2023-09-08, finding X Diamond Capital unable to pay its debts and that the order would likely achieve the purposes of judicial management under the Insolvency, Restructuring and Dissolution Act 2018. The court considered the support of the majority of creditors and the suitability of the proposed judicial manager.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application for judicial management order allowed.

1.3 Case Type

Insolvency

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court grants X Diamond Capital's application for a judicial management order, finding the company unable to pay its debts.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
X Diamond Capital Pte LtdApplicantCorporationApplication for judicial management order allowedWon
Metech International LimitedNon-partyCorporationOpposition to application dismissedLost

3. Judges

Judge NameTitleDelivered Judgment
Goh YihanJudicial CommissionerYes

4. Counsels

Counsel NameOrganization
Low Chai ChongDentons Rodyk & Davidson LLP
Sean Chen Siang EnDentons Rodyk & Davidson LLP
Shermaine Lim Jia QiDentons Rodyk & Davidson LLP
Zhulkarnain bin Abdul RahimDentons Rodyk & Davidson LLP
Cheong Wei Wen JohnDentons Rodyk & Davidson LLP
Lee Jin LoongSetia Law LLC
Yam Wern-JhienSetia Law LLC

4. Facts

  1. X Diamond Capital applied for a judicial management order.
  2. Metech International Limited opposed the application as a creditor.
  3. X Diamond Capital is engaged in selling jewellery and manufacturing piezo-electric devices.
  4. X Diamond Capital entered into a joint venture agreement with Asian Green Tech Pte Ltd (AGT).
  5. Metech agreed to grant AET loans of a total principal amount not exceeding $4m.
  6. The Company has potential assets in the form of two white knight proposals from Mr Lin Changxin and Shenzhen Baojia Investment Co Ltd.
  7. The Company has a $4m receivable from Mr Wu Yongqiang.

5. Formal Citations

  1. Re X Diamond Capital Pte Ltd, Originating Application No 148 of 2023, [2023] SGHC 253

6. Timeline

DateEvent
X Diamond Capital Pte Ltd incorporated in Singapore.
X Diamond Capital entered into a joint venture agreement with Asian Green Tech Pte Ltd.
X Diamond Capital, Metech, and AET entered into a Loan and Guarantee Agreement.
AET drew down loans from Metech.
SGX announcement published indicating initial valuation of X Diamond Capital.
Metech demanded payment from AET.
Metech served a statutory demand to X Diamond Capital.
Deng Yiming attested in his first affidavit that the Company is presently unable to pay its debts.
Deng Yiming explained in his second affidavit that he had not updated the slides shown to the investors but had explained the updates to them.
Hua Lei dated his first affidavit.
Applicant’s Further Submissions dated.
Agreed Bundle of Affidavits dated.
Judgment reserved.
Non-party’s Supplementary Written Submissions dated.
Judgment delivered.

7. Legal Issues

  1. Inability to Pay Debts
    • Outcome: The court found that the company was unable to pay its debts.
    • Category: Substantive
  2. Prospect of Achieving Purposes of Judicial Management
    • Outcome: The court found that there was a real prospect that one or more of the purposes of judicial management would be achieved.
    • Category: Substantive
  3. Creditor Support
    • Outcome: The court was satisfied that there was clear support from the majority of creditors.
    • Category: Procedural
  4. Bad Faith Application
    • Outcome: The court found that the application was not brought in bad faith.
    • Category: Procedural
  5. Appointment of Judicial Manager
    • Outcome: The court appointed the company's proposed judicial manager.
    • Category: Procedural

8. Remedies Sought

  1. Judicial Management Order

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Insolvency
  • Restructuring
  • Corporate Law

11. Industries

  • Jewellery
  • Manufacturing

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Deutsche Bank AG and another v Asia Pulp & Paper Co LtdCourt of AppealYes[2003] 2 SLR(R) 320SingaporeCited for the test of a “real prospect” in the context of the Companies Act, which is a lower threshold than the balance of probabilities test, and the applicant need not establish that the purpose in question will more probably than not be achieved if a judicial management order is made.
Yap Sze Kam v Yang Kee Logistics Pte Ltd and another matterHigh CourtYes[2023] SGHC 43SingaporeCited for applying the “real prospect” threshold in the context of the IRDA.
Point72 Ventures Investments LLC v FinLync Pte Ltd (Klein, Peter Selig and another, non-parties)High CourtYes[2023] SGHC 122SingaporeCited for applying the “real prospect” threshold in the context of the IRDA and the presence of creditor support is a factor to be considered by the court in granting a judicial management order.
Baltic House Developments Ltd v Cheung and anotherEnglish High CourtYes[2018] Bus LR 1531England and WalesCited for the burden lies on the party applying for judicial management to show a real prospect that the statutory purpose of judicial management will be achieved.
Re Genesis Technologies International (S) Pte LtdHigh CourtNo[1994] 2 SLR(R) 298SingaporeCited for the principle that a company whose debts far exceed its assets in effect belongs to its creditors, and so the court must show great heed to the wishes and views of such creditors.
Gimpex Ltd v Unity Holdings Business Ltd and others and another appealCourt of AppealYes[2015] 2 SLR 686SingaporeCited for its analysis of section 32(1)(b)(iv) of the Evidence Act and the admissibility of hearsay evidence.
Re X Diamond Capital Pte Ltd (Metech International Ltd, non-party)High CourtYes[2023] SGHC 201SingaporeCited for the principle that oral evidence provided on assertions made outside of court and tendered in court as evidence as to the truth of the contents, whereby the maker of the assertion is not called as a witness, is inadmissible hearsay evidence.
Tan Cheng Bock v Attorney-GeneralCourt of AppealYes[2017] 2 SLR 850SingaporeCited for the principle that Parliament does not legislate in vain, and the court should therefore endeavour to give significance to every word in an enactment.
Re Hodlnaut Pte LtdHigh CourtYes[2022] SGHC 209SingaporeCited for the factors a court will consider when making the appointment of a judicial manager, namely: (a) the choice of the largest creditor; (b) the independence or perceived independence of the nominees; and (c) the skill and expertise of the judicial managers.
Re Halley’s Department Store Pte LtdHigh CourtYes[1996] 1 SLR(R) 81SingaporeCited for the principle that a judicial manager is an independent officer of the court.
Re HTL International Holdings Pte LtdHigh CourtYes[2021] 5 SLR 586SingaporeCited for the principle that judicial managers rely on their business experience to achieve the objectives of the IRDA.

13. Applicable Rules

Rule Name
Rules of Court 2021

14. Applicable Statutes

Statute NameJurisdiction
Insolvency, Restructuring and Dissolution Act 2018Singapore
Companies Act 1967Singapore
Evidence Act 1893Singapore
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Judicial Management Order
  • Insolvency
  • Creditors
  • Debts
  • Loan and Guarantee Agreement
  • White Knight Proposals

15.2 Keywords

  • Judicial Management
  • Insolvency
  • Singapore
  • Creditors
  • Debts

17. Areas of Law

Area NameRelevance Score
Insolvency Law95
Restructuring and Dissolution90
Judicial Management85
Bankruptcy60
Company Law50
Civil Procedure30

16. Subjects

  • Insolvency
  • Corporate Law
  • Restructuring