British Steamship v Thresh: Cross-Border Insolvency & COMI Determination

The Singapore Court of Appeal heard an appeal by British Steamship Protection And Indemnity Association Limited and British Steamship Management Ltd against the decision to recognize liquidation proceedings of British Steamship Protection and Indemnity Association (Bermuda) Limited in Bermuda as a foreign main proceeding. The respondents, Charles Thresh and Michael Morrison, are the joint provisional liquidators. The court dismissed the appeal, holding that the company's center of main interests (COMI) was in Bermuda, and that activities conducted in breach of its Bermuda insurance license should not be considered when determining COMI.

1. Case Overview

1.1 Court

Court of Appeal of the republic of singapore

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore Court of Appeal affirmed the recognition of Bermuda liquidation proceedings, ruling that illegitimate activities are excluded when assessing a company's COMI.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
British Steamship Protection And Indemnity Association LimitedAppellantCorporationAppeal DismissedLost
British Steamship Management LtdAppellantCorporationAppeal DismissedLost
Charles ThreshRespondentIndividualAppeal DismissedWon
Michael MorrisonRespondentIndividualAppeal DismissedWon

3. Judges

Judge NameTitleDelivered Judgment
Sundaresh MenonChief JusticeNo
Belinda AngJustice of the Court of AppealNo
Kannan RameshJudge of the Appellate DivisionYes

4. Counsels

Counsel NameOrganization
Mohamed Ibrahim s/o Mohamed YakubAchievers LLC
Yasmin Binte AbdullahAchievers LLC
Siraj OmarDrew & Napier LLC
Allister Brendan Tan Yu KuanDrew & Napier LLC
Joelle TanDrew & Napier LLC

4. Facts

  1. The Company was incorporated in Bermuda and licensed to carry on insurance business in and from within Bermuda.
  2. The Company was registered under the Bermuda Insurance Act as a Class 2 Insurer.
  3. The Company initially complied with the terms of its license but subsequently did not.
  4. The BMA brought proceedings to wind up the Company due to breaches of the Bermuda Insurance Act.
  5. The JPLs sought recognition of the Bermuda proceedings in Singapore as a foreign main proceeding.
  6. The appellants challenged the recognition, arguing that the Company's COMI was not in Bermuda.
  7. The Company's policyholders would have thought that they were procuring insurance coverage from a Bermudan incorporated, licensed and regulated entity.

5. Formal Citations

  1. British Steamship Protection and Indemnity Association Ltd and another v Thresh, Charles and another, Civil Appeal No 2 of 2024, [2024] SGCA 43

6. Timeline

DateEvent
Company incorporated in Bermuda
Company registered under the Bermuda IA as a Class 2 Insurer
Company failed to appoint an approved auditor
Company failed to file statutory financial returns
BMA brought Proceeding to wind-up the Company
Winding-Up Order made
Supreme Court of Bermuda issued a certificate affirming that the Proceeding was a foreign proceeding
JPLs sought recognition of the Proceeding and the Winding-Up Order
Appeal dismissed
Grounds of decision delivered

7. Legal Issues

  1. Determination of Centre of Main Interests (COMI)
    • Outcome: The court held that the company's COMI was in Bermuda, and that activities conducted in breach of its Bermuda insurance license should not be considered when determining COMI.
    • Category: Substantive
    • Sub-Issues:
      • Relevance of illegitimate activities in COMI assessment
      • Impact of regulatory non-compliance on COMI
  2. Recognition of Foreign Proceeding
    • Outcome: The court held that the Proceeding was a foreign proceeding within Art 2(h) of the SG Model Law.
    • Category: Procedural
    • Sub-Issues:
      • Whether the Proceeding was conducted under a law relating to insolvency or adjustment of debt
      • Whether the Proceeding was collective in nature
  3. Public Policy Exception
    • Outcome: The court held that the public policy exception in Art 6 was not engaged on the facts.
    • Category: Procedural
    • Sub-Issues:
      • Breach of natural justice and due process
      • Misrepresentations by JPLs

8. Remedies Sought

  1. Recognition of foreign main proceeding
  2. Consequential relief

9. Cause of Actions

  • Winding-up
  • Recognition of Foreign Proceeding

10. Practice Areas

  • Commercial Litigation
  • Insolvency
  • Cross-Border Insolvency

11. Industries

  • Insurance
  • Shipping

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Re Thresh, Charles and another (British Steamship Protection and Indemnity Association Ltd and another, non-parties)High CourtYes[2023] SGHC 337SingaporeAffirmed the Judge’s decision recognizing the liquidation proceedings in Bermuda as a foreign main proceeding.
Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte LtdCourt of AppealYes[2023] 2 SLR 421SingaporeCited for the five cumulative requirements that had to be satisfied for a proceeding to be considered a foreign proceeding within Art 2(h).
Re Zetta Jet Pte Ltd and others (Asia Aviation Holdings Pte Ltd, intervener)High CourtYes[2019] 4 SLR 1343SingaporeCited for the principle that the presumption in Art 16(3) is a helpful starting point which may be displaced by other factors.
Re Rooftop Group International Pte Ltd and another (Triumphant Gold Ltd and another, non-parties)High CourtYes[2020] 4 SLR 680SingaporeCited for the principle that COMI is a holistic analysis and the correct approach is to ascertain where the COMI is, based on factors readily and objectively ascertainable by third parties, especially creditors.
In re Global Cord Blood CorporationBankr. S.D.N.Y.Yes2022 WL 17478530United StatesCited to distinguish that participation of all creditors is not a requirement for a proceeding to be regarded as collective in nature.
In re British American Insurance Company LimitedUS Bankruptcy Court, S.D. FloridaYes425 B.R. 884United StatesCited by the appellants to argue that the Company's COMI was not in Bermuda, but distinguished by the court.
In re Bear Stearns High-Grade Structured CreditUS Bankruptcy Court S.D. New YorkYes374 B.R. 122United StatesCited by the appellants to argue that the Company's COMI was not in Bermuda, but distinguished by the court.
In re Oi Brasil Holdings Coöperatief U.A.Bankr SDNYYes578 BR 169United StatesCited for the principle that issues of bad faith and other inequitable conduct had to be taken into account when considering the factors relevant to determining COMI.
In re Fairfield Sentry Ltd2nd CirYes714 F 3d 127United StatesCited for the principle that consideration could be given to the period between the commencement of the foreign proceeding and the application for recognition in order to ascertain if there had been any bad faith manipulation of COMI by the debtor.
Re Tantleff, AlanHigh CourtYes[2023] 3 SLR 250SingaporeCited for the principle that the actions of a foreign representative were irrelevant to the assessment of COMI.
Re PT Garuda Indonesia (Persero) Tbk and another matterSingapore International Commercial CourtYes[2024] 3 SLR 254SingaporeCited for the principle that a challenge under Art 6 would only succeed if the fundamental public policy of Singapore was engaged.
Stocznia Gdynia SA v Bud-Bank Leasing SPNot AvailableYes[2010] BCC 255England and WalesCited for the principle that the fact that foreign insolvency laws and procedures operate differently from what is normally expected and experienced in the domestic insolvency regime cannot, without more, give rise to a finding that the foreign proceeding is abhorrent and contrary to Singapore public policy.
In re Gold and Honey, LtdNot AvailableYes410 BR 357United StatesCited as an example of a situation that might fall within the public policy exception, where recognition is sought in respect of a foreign proceeding commenced in breach of a moratorium over legal proceedings.
In re ToftBankr SDNYYes453 BR 186United StatesCited as an example of a situation that might fall within the public policy exception, where the relief sought under the Model Law is prohibited in the forum state or where compliance with orders for such reliefs would open individuals to criminal prosecution.
In re Creative Finance Ltd (In Liquidation)Bankr SDNYYes2016 BL 8825United StatesCited as an example of a situation that might fall within the public policy exception, where the foreign representatives acted in bad faith or failed to make full and frank disclosure of material facts to the receiving court.
Re Zetta Jet Pte Ltd and othersHigh CourtYes[2018] 4 SLR 801SingaporeCited for the position that the threshold for refusal of recognition under Art 6 the SG Model Law was not lower than under Art 6 of the Model Law as a result of omission of “manifestly” in the former.
In re British American Isle of Venice (BVI) LtdNot AvailableYes441 BR 713United StatesCited for the actions of a foreign representative

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Bermuda Insurance Act 1978Bermuda
Bermuda Companies Act 1981Bermuda
UNCITRAL Model Law on Cross-Border InsolvencyNot Available

15. Key Terms and Keywords

15.1 Key Terms

  • Centre of Main Interests
  • COMI
  • Foreign main proceeding
  • Cross-border insolvency
  • Bermuda Insurance Act
  • UNCITRAL Model Law
  • Foreign proceeding
  • Liquidation
  • Joint provisional liquidators
  • Bermuda Monetary Authority
  • Insurance business

15.2 Keywords

  • Insolvency
  • Cross-border
  • COMI
  • Bermuda
  • Liquidation
  • Insurance

17. Areas of Law

Area NameRelevance Score
Insolvency Law95
Winding Up90
Cross-Border Insolvency85
Recognition of foreign insolvency proceedings80
Foreign Law70
Private International Law60
International Law50
Comity40
Arbitration10

16. Subjects

  • Insolvency
  • Cross-Border Insolvency
  • Insurance Law