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 Singapore1.2 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
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, Ang Ann Liang, Yeoh Tze Ning, Edwin Teong Ying Keat |
| 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, Ang Ann Liang, Yeoh Tze Ning, Edwin Teong Ying Keat |
| Babel Block Limited | Applicant | Corporation | Moratoria Extension Applications granted for a period of about three months | Partial | Yeo Alexander Lawrence Han Tiong, Ang Ann Liang, Yeoh Tze Ning, Edwin Teong Ying Keat |
| Moonalpha Financial Service Limited | Applicant | Corporation | Moratoria Extension Applications granted for a period of about three months | Partial | Yeo Alexander Lawrence Han Tiong, Ang Ann Liang, Yeoh Tze Ning, Edwin Teong Ying Keat |
| Shinar Trading Services Private Limited | Applicant | Corporation | Moratoria Extension Applications granted for a period of about three months | Partial | Yeo Alexander Lawrence Han Tiong, Ang Ann Liang, Yeoh Tze Ning, Edwin Teong Ying Keat |
| DRB Panama Inc | Other | Corporation | Applications allowed | Lost | Abraham S Vergis SC, Mohamed Nawaz Kamil, Alston Yeong, Daniel Huang Xinli |
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 |
| Ang Ann Liang | Allen & Gledhill LLP |
| Yeoh Tze Ning | Allen & Gledhill LLP |
| Edwin Teong Ying Keat | Allen & Gledhill LLP |
| Abraham S Vergis SC | Providence Law Asia LLC |
| Mohamed Nawaz Kamil | Providence Law Asia LLC |
| Alston Yeong | 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 |
|---|---|
| 1st Affidavit of Yang Zhou filed in HC/OA 192/2023 | |
| 3rd Affidavit of Yang Zhou filed in HC/OA 192/2023 | |
| Applicants’ Joint Written Submissions dated relating to the moratoria extension applications | |
| Applicants’ Joint Written Submissions dated relating to the sealing orders | |
| 1st Non-Party’s Written Submissions dated | |
| Hearing held | |
| 4th Affidavit of Yang Zhou in HC/OA 192/2023 dated | |
| Judgment reserved | |
| 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
16. Subjects
- Insolvency
- Restructuring
- Schemes of Arrangement
- Cryptocurrency
17. Areas of Law
- Insolvency Law
- Schemes of Arrangement
- Restructuring Law