Re Fullerton Capital Ltd: Cross-Border Insolvency & Disclosure Orders

The joint liquidators of Fullerton Capital Limited (in liquidation) ("FCL") applied to the General Division of the High Court of Singapore on April 8, 2024, for recognition of FCL's liquidation in the British Virgin Islands ("BVI") as a foreign main proceeding and for disclosure and examination orders against named "Relevant Persons." Mr. Lau Yean Liang, Raymond, a non-party, objected. The court allowed the joint liquidators' application, leading Mr. Lau to file an appeal on May 5, 2024. The primary legal issue was cross-border insolvency. The court ultimately recognized the BVI liquidation as a foreign main proceeding and granted the disclosure and examination orders.

1. Case Overview

1.1 Court

General Division of the High Court of the Republic of Singapore

1.2 Outcome

Application allowed in the main

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court recognizes BVI liquidation of Fullerton Capital Ltd as a foreign main proceeding and grants disclosure orders. Key issue: cross-border insolvency.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Jason Aleksander KardachiApplicantIndividualApplication allowed in the mainWonYam Wern-Jhien, Ian Mah
Elaine HanrahanApplicantIndividualApplication allowed in the mainWonYam Wern-Jhien, Ian Mah
Lau Yean Liang, RaymondNon-partyIndividualDisclosure and Examination Order made against Mr. LauLostEric Ng Yuen, Jenny Lu
Morgan James Wilbur IVNon-partyIndividualDisclosure and Examination Order made against Mr. WilburNeutralPoh Yee Shing
UOB Kay Hian Private LimitedNon-partyCorporationOrder granted as agreedConsentPhang Shi Ting
PDLegal LLCNon-partyLimited Liability PartnershipOrder granted as agreedConsentSathya Justin Narayanan
Discovery Key Investments LimitedNon-partyCorporationWatching briefNeutralAxl Rizqy
Zhou Li HuaNon-partyIndividualDisclosure and Examination Order made against Ms. ZhouNeutral
Tan ZhenjianNon-partyIndividualDisclosure and Examination Order made against Mr. TanNeutral
RHTLaw Asia LLPNon-partyLimited Liability PartnershipNo order madeNeutral
Maybank Singapore LimitedNon-partyCorporationNo order madeNeutral

3. Judges

Judge NameTitleDelivered Judgment
Kristy TanJudicial Commissioner of the High CourtYes

4. Counsels

Counsel NameOrganization
Yam Wern-JhienSetia Law LLC
Ian MahSetia Law LLC
Eric Ng YuenMalkin & Maxwell LLP
Jenny LuMalkin & Maxwell LLP
Poh Yee ShingShook Lin & Bok LLP
Phang Shi TingRajah & Tann LLP
Sathya Justin NarayananPDLegal LLC
Axl RizqyProvidence Law Asia LLC

4. Facts

  1. Jason Aleksander Kardachi and Elaine Hanrahan are the joint liquidators of Fullerton Capital Limited.
  2. Fullerton Capital Limited is a company incorporated in the British Virgin Islands on March 11, 2014.
  3. Lau Yean Liang, Raymond was a shareholder and director of Fullerton Capital Limited from March 11, 2014 to March 20, 2018.
  4. On August 10, 2017, Fullerton Capital Limited entered into a loan contract with Discovery Key Investments Limited to lend CAD110,000,000.
  5. As security for the loan, Discovery Key Investments Limited pledged its 7,200,000 common stock in The Stars Group Inc.
  6. On October 10, 2022, the BVI High Court made an order declaring the dissolution of Fullerton Capital Limited void.
  7. On December 12, 2022, the Joint Voluntary Liquidators provided notice that they intended to proceed with the liquidation of Fullerton Capital Limited as an insolvent liquidation.

5. Formal Citations

  1. Re Fullerton Capital Ltd, Originating Application No 116 of 2024, [2024] SGHC 155

6. Timeline

DateEvent
Fullerton Capital Limited incorporated in the BVI.
Lau Yean Liang, Raymond became a shareholder and director of Fullerton Capital Limited.
Fullerton Capital Limited entered into a loan contract with Discovery Key Investments Limited.
Lau Yean Liang, Raymond ceased to be a shareholder and director of Fullerton Capital Limited.
Tan Zhenjian became a director of Fullerton Capital Limited.
Tan Zhenjian ceased to be a director of Fullerton Capital Limited.
Discovery Key Investments Limited commenced HC/S 435/2019 against Fullerton Capital Limited, Lau Yean Liang, Raymond, and Morgan James Wilbur IV.
Fullerton Capital Limited's board and members initiated a voluntary solvent liquidation.
Dissolution of Fullerton Capital Limited finalized.
Zhang Yingxia requested PDLegal cease acting for Fullerton Capital Limited.
Discovery Key Investments Limited applied to the BVI High Court for an order to restore Fullerton Capital Limited to liquidation.
BVI High Court made an order declaring the dissolution of Fullerton Capital Limited void and restoring it to the Register of Companies.
Fullerton Capital Limited was restored to the Register of Companies in the BVI.
Joint Voluntary Liquidators provided notice to the Official Receiver that they intended to proceed with the liquidation of Fullerton Capital Limited as an insolvent liquidation.
Discovery Key Investments Limited discontinued S 435 against Mr. Wilbur.
Discovery Key Investments Limited resolved to appoint Jason Aleksander Kardachi as a joint liquidator of Fullerton Capital Limited.
Fullerton Capital Limited entered into a funding agreement with Discovery Key Investments Limited.
Joint Liquidators applied to the BVI High Court for permission to commence proceedings to seek recognition and enforcement of the BVI Restoration Order.
BVI High Court granted the BVI Sanction Application.
Joint Liquidators commenced OA 116 to seek recognition of the insolvent liquidation of Fullerton Capital Limited in Singapore.
Mr Lau’s Written Submissions dated.
High Court allowed the joint liquidators’ application in the main.
Mr Kardachi filed an affidavit to provide the Undertaking on behalf of the Joint Liquidators.
Mr Lau filed an appeal against the decision.
Judgment Date

7. Legal Issues

  1. Recognition of Foreign Proceeding
    • Outcome: The court concluded that, pursuant to Art 17(1) of the SG Model Law, the court must recognise the BVI Liquidation.
    • Category: Substantive
    • Related Cases:
      • [2023] 2 SLR 421
      • [2023] 3 SLR 250
      • [2018] 4 SLR 801
      • [2024] 3 SLR 254
      • [2023] SGHC 337
  2. Centre of Main Interests (COMI)
    • Outcome: The court concluded that the presumption that the BVI was FCL’s COMI was not displaced. The BVI Liquidation qualified as a foreign main proceeding and had, under Art 17(2)(a) of the SG Model Law, to be recognised as such in Singapore.
    • Category: Substantive
    • Related Cases:
      • [2019] 4 SLR 1343
      • [2020] 4 SLR 680
  3. Disclosure and Examination Orders
    • Outcome: The court made the Disclosure and Examination Order and the Injunctive Effect Order against Ms. Zhou, Mr. Tan, Mr. Wilbur and Mr. Lau, with liberty granted to them to apply for any directions or orders they thought necessary or convenient. In addition, in relation to Mr. Lau, the court ordered the Joint Liquidators to provide an undertaking that they would not disclose to DKI documents and information directly relevant to DKI’s claim against Mr. Lau in S 435, which they obtained from Mr. Lau pursuant to the Disclosure and Examination Order, save for documents and information already obtained in S 435 and subject to the Joint Liquidators having liberty to apply to the court to do so.
    • Category: Procedural
    • Related Cases:
      • [2015] 3 SLR 665
      • [2010] EWHC 1299 (Ch)
      • [2023] 5 SLR 656
      • [2023] 4 SLR 1575
      • [2023] 2 SLR 535
      • [2003] 3 SLR(R) 493
      • [2018] 3 SLR 687
      • [2004] 3 SLR(R) 164

8. Remedies Sought

  1. Recognition of foreign proceeding
  2. Disclosure order
  3. Examination order

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Cross-Border Insolvency
  • Liquidation
  • Disclosure Orders
  • Examination Orders

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte LtdSingapore High CourtYes[2023] 2 SLR 421SingaporeCited to define the requirements for a proceeding to qualify as a foreign proceeding under Art 2(h) of the SG Model Law.
Re Tantleff, AlanSingapore High CourtYes[2023] 3 SLR 250SingaporeCited for the principle that the fact of appointment of the foreign representative in the foreign proceeding suffices for recognition.
Xu Wei Dong v Midas Holdings LtdSingapore High CourtYes[2022] SGHC 268SingaporeCited for the principle that s 244 of the IRDA applies extra-territorially.
Re Zetta Jet Pte Ltd and othersSingapore High CourtYes[2018] 4 SLR 801SingaporeCited for the principle that whether or not a foreign insolvency proceeding was properly commenced is irrelevant to the granting of recognition.
Re PT Garuda Indonesia (Persero) Tbk and another matterSingapore High CourtYes[2024] 3 SLR 254SingaporeCited for the principle that a recognition proceeding is a light-touch process.
Re Thresh, Charles and another (British Steamship Protection and Indemnity Association Ltd and another, non-parties)Singapore High CourtYes[2023] SGHC 337SingaporeCited for the principle that preventing the exercise of or limiting a person’s rights on public policy grounds is an exceptional measure.
Re Zetta Jet Pte Ltd and others (Asia Aviation Holdings Pte Ltd, intervener)Singapore Court of AppealYes[2019] 4 SLR 1343SingaporeCited for the principles regarding the definition of "foreign main proceeding" and the determination of a debtor's COMI.
Re Rooftop Group International Pte Ltd and another (Triumphant Gold Ltd and another, non-parties)Singapore High CourtYes[2020] 4 SLR 680SingaporeCited for the principle that the question is whether it was objectively ascertainable by third parties that the debtor’s operational decisions were being made at the location of its controller.
PricewaterhouseCoopers LLP and others v Celestial Nutrifoods Ltd (in compulsory liquidation)Singapore Court of AppealYes[2015] 3 SLR 665SingaporeCited for the two-stage test for whether an order should be made under s 285 of the Companies Act, which applies to s 244 of the IRDA.
Picard (foreign representative of Bernard L Madoff Investment Securities LLC) v FIM Advisers LLPEnglish High CourtYes[2010] EWHC 1299 (Ch)England and WalesCited for the principles to be considered when applying Art 21(1)(d) of the UK Model Law, which is similar to Art 21(1)(d) of the SG Model Law.
Ong Jane Rebecca v Lim Lie HoaSingapore High CourtYes[2023] 5 SLR 656SingaporeCited for the principle that s 244 of the IRDA is derived from s 285 of the Companies Act.
Song Jianbo v Sunmax Global Capital Fund 1 Pte Ltd (in compulsory liquidation)Singapore High CourtYes[2023] 4 SLR 1575SingaporeCited for the principle that it is orthodox for a liquidator to seek funding from creditors with a view to meeting the costs and expenses associated with investigations into the affairs of the company.
Rashmi Bothra v SuntecCity Thirty Pte Ltd and othersSingapore High CourtYes[2023] 2 SLR 535SingaporeCited for the principle that information obtained by a liquidator under s 244 of the IRDA is to be used only for the purpose of assisting the liquidator to discharge his duties.
Re Lion City Holdings Pte LtdSingapore High CourtYes[2003] 3 SLR(R) 493SingaporeCited for the duties of liquidators.
Petroships Investment Pte Ltd v Wealthplus Pte Ltd (in members’ voluntary liquidation) (Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd and another, interveners) and another matterSingapore High CourtYes[2018] 3 SLR 687SingaporeCited for the duties of liquidators.
Liquidator of W&P Piling Pte Ltd v Chew Yin What and othersSingapore High CourtYes[2004] 3 SLR(R) 164SingaporeCited for the principle that it is legitimate for the liquidator to seek examination orders with a view to investigating whether a claim exists.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Insolvency, Restructuring and Dissolution Act 2018Singapore
UNCITRAL Model Law on Cross-Border InsolvencyN/A
BVI Business Companies Act 2004 (No 16 of 2004)British Virgin Islands
Insolvency Act 2003 (No 5 of 2003)British Virgin Islands
Evidence Act 1893Singapore
Companies Act 1967Singapore
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Foreign main proceeding
  • Centre of main interests
  • Disclosure order
  • Examination order
  • Joint liquidators
  • BVI Liquidation
  • Relevant Persons

15.2 Keywords

  • Insolvency
  • Cross-border
  • Liquidation
  • Singapore
  • BVI
  • Recognition
  • Disclosure
  • Examination

16. Subjects

  • Insolvency
  • Cross-border insolvency
  • Company Law

17. Areas of Law

  • Insolvency Law
  • Cross-border insolvency