AAX Asia & AAX Singapore Winding Up: Interim Judicial Manager's Standing & Inability to Pay Debts
The General Division of the High Court of Singapore, on 15 November 2023, issued a judgment in the matter of AAX Asia Private Limited and AAX Singapore Private Limited, ordering their winding up. Goh Yihan J addressed the standing of an interim judicial manager to bring winding up applications and the grounds for the petition, including the companies' inability to pay debts and the just and equitable reason for winding up. The court found that the companies were unable to pay their debts under s 125(1)(e) of the Insolvency, Restructuring and Dissolution Act 2018 and that it was just and equitable to wind up the companies under s 125(1)(i) of the same act.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Winding up orders granted.
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court orders the winding up of AAX Asia and AAX Singapore due to inability to pay debts and just and equitable grounds, clarifying the standing of an interim judicial manager.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Official Receiver | Other | Government Agency | Neutral | Neutral | Janica Tan of Ministry of Law (IPTO) |
| AAX Asia Private Limited (in interim judicial management) | Claimant | Corporation | Winding up orders granted | Won | |
| AAX Singapore Private Limited (in interim judicial management) | Claimant | Corporation | Winding up orders granted | Won |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Goh Yihan | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Janica Tan | Ministry of Law (IPTO) |
| Chua Sui Tong | Rev Law LLC |
| Gan Jhia Huei | Rev Law LLC |
| Troy Doyle | Gibson Dunn & Crutcher LLP |
| Peter Madden | Gibson Dunn & Crutcher LLP |
4. Facts
- AAX Singapore is wholly owned by AAX Asia.
- AAX Asia is wholly owned by Atom Holdings.
- The AAX Group operated a cryptocurrency business.
- The AAX Group's stability deteriorated after FTX filed for bankruptcy.
- The former management of Atom Holdings allegedly absconded with the keys to the digital assets of the AAX Group.
- Atom Holdings has been placed under compulsory liquidation in the Cayman Islands.
- The interim judicial manager concluded that none of the purposes of judicial management could be achieved.
5. Formal Citations
- Re AAX Asia Pte Ltd (under judicial management) and another, Companies Winding Up Nos 180 and 181 of 2023, [2023] SGHC 324
6. Timeline
| Date | Event |
|---|---|
| AAX Group purportedly processed US$72bn in spot trades each day. | |
| FTX filed for bankruptcy. | |
| AAX Group companies erased their entire online presence. | |
| Shareholder resolutions passed to remove previous directors of the Companies and replace them with Quantuma appointees. | |
| Companies placed under interim judicial management. | |
| Mr Luke Anthony Furler appointed as the interim judicial manager of the Companies. | |
| Atom Holdings placed under compulsory liquidation in the Cayman Islands. | |
| Joint official liquidator of Atom Holdings passed written shareholder resolutions empowering Mr Furler to apply for the Companies to be wound up. | |
| Hearing held; winding up orders granted. | |
| Last day of the term of appointment of Mr Furler as the interim judicial manager. | |
| Grounds of decision issued. |
7. Legal Issues
- Standing of an interim judicial manager to bring winding up applications
- Outcome: The court held that the interim judicial manager had the standing to bring the winding up applications.
- Category: Procedural
- Inability to pay debts
- Outcome: The court found that the Companies were unable to pay their debts.
- Category: Substantive
- Related Cases:
- [2021] 2 SLR 478
- Just and equitable winding up
- Outcome: The court found that it was just and equitable to wind up the Companies.
- Category: Substantive
- Related Cases:
- [2023] SGHC 276
- [2018] 1 SLR 763
- [2019] 1 SLR 1046
- [1996] BCC 505
8. Remedies Sought
- Winding up order
9. Cause of Actions
- No cause of actions
10. Practice Areas
- Insolvency
- Restructuring
- Corporate Law
11. Industries
- Cryptocurrency
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Re Emmadart Ltd | English High Court | Yes | [1979] 1 All ER 599 | England and Wales | Cited for the proposition that a board of directors may petition for the winding up of a company where such action was authorised or ratified by the company by an ordinary resolution of the shareholders. |
| Tesco Supermarkets Ltd v Nattrass | House of Lords | Yes | [1972] AC 153 | England and Wales | Cited for the principle that natural persons are to be treated in law as being the company for the purpose of acts which are done in exercise of powers of the company entrusted to such natural persons. |
| Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd (formerly known as Tong Teik Pte Ltd) | Court of Appeal | Yes | [2021] 2 SLR 478 | Singapore | Cited for the cash flow test to determine an inability to pay debts. |
| Tan Yew Huat v Sin Joo Huat Hardware Pte Ltd and another matter | High Court | Yes | [2023] SGHC 276 | Singapore | Cited for the two-stage test in determining whether to make a winding up order under s 125(1)(i) of the IRDA. |
| Perennial (Capitol) Pte Ltd and another v Capitol Investment Holdings Pte Ltd and other appeals | Court of Appeal | Yes | [2018] 1 SLR 763 | Singapore | Cited for the principles in determining whether to make a winding up order under s 125(1)(i) of the IRDA. |
| Chow Kwok Chuen v Chow Kwok Chi and another | Court of Appeal | Yes | [2008] 4 SLR(R) 362 | Singapore | Cited for the wide significance of the words 'just and equitable'. |
| In re Blériot Manufacturing Aircraft Company (Limited) | English High Court | Yes | (1996) 32 TLR 253 | England and Wales | Cited for the wide significance of the words 'just and equitable'. |
| Grimmett, Andrew and others v HTL International Holdings Pte Ltd (under judicial management) (Phua Yong Tat and others, non-parties) | High Court | Yes | [2022] 5 SLR 991 | Singapore | Cited for the illustrative broad categories of cases which fall under the “just and equitable” jurisdiction to wind up a company. |
| Goodwealth Trading (CA) | N/A | Yes | [1990] 2 SLR(R) 691 | Singapore | Cited as an example of where the substratum of the company has been lost. |
| Seah Chee Wan and another v Connectus Group Pte Ltd | High Court | Yes | [2019] SGHC 228 | Singapore | Cited as an example of where there is a deadlock in the management of a company. |
| Chong Kok Ming and another v Richinn Technology Pte Ltd and others | High Court | Yes | [2020] SGHC 224 | Singapore | Cited as an example of where the company is in truth a quasi-partnership, and there has been a breakdown of trust and confidence between the two groups of shareholders. |
| Ma Wai Fong Kathryn v Trillion Investment Pte Ltd and others and another appeal | Court of Appeal | Yes | [2019] 1 SLR 1046 | Singapore | Cited for the principle that a company may be wound up where it is no longer able to carry on its main object. |
| Foo Peow Yong Douglas v ERC Prime II Pte Ltd | High Court | Yes | [2017] SGHC 299 | Singapore | Cited as an example of where there is a loss of confidence in the directors on account of their lack of probity in the conduct and management of the company affairs. |
| Re Iniaga Building Supplies (S) Pte Ltd | High Court | Yes | [1994] 2 SLR(R) 416 | Singapore | Cited as an example of where a shareholder has been excluded from management in breach of an understanding by the other shareholders. |
| Bell Group Finance (Pty) Ltd (in liq) v Bell Group (UK) Holdings Ltd | English High Court | Yes | [1996] BCC 505 | England and Wales | Cited as authority for the proposition that a company may be wound up where it is in the interests of the unsecured creditors to conduct investigations into the affairs of a company. |
| RCMA Asia Pte Ltd v Sun Electric Power Pte Ltd (Energy Market Authority of Singapore, non-party) | High Court | Yes | [2020] SGHC 205 | Singapore | Cited for the principle that the fact that a liquidator could conduct investigations into disputed dealings, and take further action, if necessary, in the interests of the creditors, was a factor to consider in exercising his discretion to wind up a company. |
| DB International Trust (Singapore) Ltd v Medora Xerxes Jamshid and another | High Court | Yes | [2023] SGHC 83 | Singapore | Cited for the principle that one of the purposes of an insolvent liquidation is to allow for an investigation into the company’s affairs by an independent and appropriately qualified person. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Insolvency, Restructuring and Dissolution Act 2018 | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 124(1)(a) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 124(1)(h) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 125(1)(e) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 125(1)(i) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 125(2)(c) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 88(1) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 94(3) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 94(4)(b) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 91(2) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 95(1)(a) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 95(1)(c) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 95(4) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 94(6) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 94(6)(a) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 94(6)(b) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 115(3)(d) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 s 115(1)(e) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Interim judicial manager
- Winding up
- Insolvency
- Unable to pay debts
- Just and equitable
- AAX Group
- Cryptocurrency
- Atom Holdings
- Liquidator
- Cash flow test
- Substratum
15.2 Keywords
- Insolvency
- Winding up
- Interim Judicial Manager
- Cryptocurrency
- Singapore
- AAX Asia
- AAX Singapore
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Winding Up | 95 |
| Insolvency Law | 90 |
| Interim Judicial Management | 70 |
| Company Law | 60 |
16. Subjects
- Insolvency Law
- Winding up
- Judicial Management