Babel Holding Ltd: Extension of Moratoria under Insolvency, Restructuring and Dissolution Act for Cryptocurrency Restructuring

The Singapore High Court considered applications by Babel Holding Limited, Babel Asia Asset Management Private Limited, Babel Block Limited, Moonalpha Financial Service Limited, and Shinar Trading Services Private Limited for an extension of moratoria under Section 64 of the Insolvency, Restructuring and Dissolution Act 2018, to facilitate a scheme of arrangement for the Babel Finance Group. The court granted a three-month extension of the moratoria and allowed sealing applications to protect commercially sensitive information.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

The Sealing Applications are allowed, and the Moratoria Extension Applications are granted for a period of about three months.

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court grants moratoria extension to Babel Holding Ltd for restructuring via scheme of arrangement, involving cryptocurrency assets.

1.7 Decision Date

16 April 2023

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Babel Holding Limited	Applicant	Corporation	Moratoria Extension Applications granted for a period of about three months	Partial	Yeo Alexander Lawrence Han Tiong of Allen & Gledhill LLP Yeoh Tze Ning of Allen & Gledhill LLP Edwin Teong Ying Keat of Allen & Gledhill LLP Ang Ann Liang of Allen & Gledhill LLP
Babel Asia Asset Management Private Limited	Applicant	Corporation	Moratoria Extension Applications granted for a period of about three months	Partial	Yeo Alexander Lawrence Han Tiong of Allen & Gledhill LLP Yeoh Tze Ning of Allen & Gledhill LLP Edwin Teong Ying Keat of Allen & Gledhill LLP Ang Ann Liang of Allen & Gledhill LLP
Babel Block Limited	Applicant	Corporation	Moratoria Extension Applications granted for a period of about three months	Partial	Yeo Alexander Lawrence Han Tiong of Allen & Gledhill LLP Yeoh Tze Ning of Allen & Gledhill LLP Edwin Teong Ying Keat of Allen & Gledhill LLP Ang Ann Liang of Allen & Gledhill LLP
Moonalpha Financial Service Limited	Applicant	Corporation	Moratoria Extension Applications granted for a period of about three months	Partial	Yeo Alexander Lawrence Han Tiong of Allen & Gledhill LLP Yeoh Tze Ning of Allen & Gledhill LLP Edwin Teong Ying Keat of Allen & Gledhill LLP Ang Ann Liang of Allen & Gledhill LLP
Shinar Trading Services Private Limited	Applicant	Corporation	Moratoria Extension Applications granted for a period of about three months	Partial	Yeo Alexander Lawrence Han Tiong of Allen & Gledhill LLP Yeoh Tze Ning of Allen & Gledhill LLP Edwin Teong Ying Keat of Allen & Gledhill LLP Ang Ann Liang of Allen & Gledhill LLP
DRB Panama Inc	Other	Corporation	Applications allowed	Lost	Alston Yeong of Providence Law Asia LLC Abraham S Vergis SC of Providence Law Asia LLC Mohamed Nawaz Kamil of Providence Law Asia LLC Daniel Huang Xinli of Providence Law Asia LLC

3. Judges

Judge Name	Title	Delivered Judgment
Aedit Abdullah	Judge of the High Court	Yes

4. Counsels

Counsel Name	Organization
Yeo Alexander Lawrence Han Tiong	Allen & Gledhill LLP
Yeoh Tze Ning	Allen & Gledhill LLP
Edwin Teong Ying Keat	Allen & Gledhill LLP
Ang Ann Liang	Allen & Gledhill LLP
Alston Yeong	Providence Law Asia LLC
Abraham S Vergis SC	Providence Law Asia LLC
Mohamed Nawaz Kamil	Providence Law Asia LLC
Daniel Huang Xinli	Providence Law Asia LLC

4. Facts

The applicants are companies affiliated with the “Babel Finance” brand.
The applicants sought moratoria extension to formulate a restructuring plan.
The restructuring plan will be implemented via a scheme of arrangement.
The scheme contemplates substantive consolidation of the Babel Finance Group's assets and liabilities.
The applicants propose a deed poll structure.
The Objecting Creditor argued the applications were not brought bona fide.
The Objecting Creditor alleged the applicants omitted creditor identities and breached licensing requirements.

5. Formal Citations

Re Babel Holding Ltd and other matters, , [2023] SGHC 98

6. Timeline

Date	Event
2023-03-06	1st Affidavit of Yang Zhou filed in HC/OA 192/2023
2023-03-27	3rd Affidavit of Yang Zhou filed in HC/OA 192/2023
2023-03-29	Applicants’ Joint Written Submissions dated relating to the moratoria extension applications
2023-03-29	Applicants’ Joint Written Submissions dated relating to the sealing orders
2023-03-29	1st Non-Party’s Written Submissions dated
2023-03-31	Hearing held
2023-04-05	4th Affidavit of Yang Zhou in HC/OA 192/2023 dated
2023-03-31	Judgment reserved
2023-04-17	Judgment issued

7. Legal Issues

Extension of Moratoria
- Outcome: The court granted a three-month extension of the moratoria.
- Category: Substantive
Substantial Connection to Singapore
- Outcome: The court found that the Foreign Applicants have a substantial connection with Singapore.
- Category: Jurisdictional
Sealing of Documents
- Outcome: The court allowed the Sealing Applications.
- Category: Procedural
Bona Fides of Moratoria Extension Applications
- Outcome: The court found that the allegations of breach made by the Objecting Creditor are not clearly established.
- Category: Substantive

8. Remedies Sought

Extension of Moratoria
Sealing Orders

9. Cause of Actions

Application for Extension of Moratoria under s 64 of the Insolvency, Restructuring and Dissolution Act 2018

10. Practice Areas

Insolvency
Restructuring
Schemes of Arrangement

11. Industries

Finance
Cryptocurrency

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
Re IM Skaugen SE and other matters	High Court	Yes	[2018] SGHC 259	Singapore	Cited for the requirements for extension of moratoria, specifically that the applications are made bona fide and there is a reasonable prospect of the intended Scheme working and being acceptable to the general run of creditors.
Re Zipmex Co Ltd and other matters	High Court	Yes	[2022] SGHC 196	Singapore	Cited for the broad approach to the question of 'substantial connection' for foreign companies, requiring activities of some permanence in Singapore.
Re DSG Asia Holdings Pte Ltd	High Court	Yes	[2021] SGHC 209	Singapore	Cited for the acceptance of the use of a deed poll.
Dean-Willcocks v Soluble Solutions Hydroponics Pty Ltd	Unknown	Yes	(1997) 24 ACSR 79	Australia	Cited to show that substantive consolidation, or pooling, may be conducted pursuant to a scheme of arrangement.
Whittingham; Re Hunter Valley Gravel Supplies Pty Ltd	Unknown	Yes	(2006) 59 ACSR 559	Australia	Cited to show that substantive consolidation, or pooling, may be conducted pursuant to a scheme of arrangement.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
Insolvency, Restructuring and Dissolution Act 2018	Singapore
Section 64 of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
Section 63(3) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
Section 246(1)(d) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
Section 246(3) of the Insolvency, Restructuring and Dissolution Act 2018	Singapore
Companies Act 1967	Singapore
Section 210 of the Companies Act 1967	Singapore
Payment Services Act 2019	Singapore
Securities and Futures Act 2001	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Moratoria Extension Applications
Scheme of Arrangement
Babel Finance Group
Substantive Consolidation
Deed Poll Structure
Babel Recovery Coins
Cryptocurrency
Digital payment token services
Accredited investors
Institutional investors

15.2 Keywords

Insolvency
Restructuring
Scheme of Arrangement
Moratorium
Cryptocurrency
Babel Finance

17. Areas of Law

Area Name	Relevance Score
Insolvency Law	95
Schemes of Arrangement	90
Restructuring and Dissolution	90
Extension of moratoria	85
Extension of Validity	80
Bankruptcy	70
Company Law	60
Contract Law	30

16. Subjects

Insolvency
Restructuring
Schemes of Arrangement
Cryptocurrency