Three Arrows Capital Ltd v Davies: Freezing Order Dispute Over Cryptocurrency Hedge Fund Assets
The liquidators of Three Arrows Capital Ltd, a company in liquidation in the British Virgin Islands, sought a freezing order in Singapore against Kyle Livingston Davies' wife, Kelly Kaili Chen, alleging she held assets as his nominee. The High Court of Singapore, presided over by Justice Philip Jeyaretnam, dismissed Ms. Chen's application to discharge the freezing order and her related application for a stay of her obligation to disclose information regarding her assets. The liquidators claimed Ms. Chen owed the company money and that transactions were undervalue. The court found the liquidators had a good arguable case and demonstrated a real risk of asset dissipation.
1. Case Overview
1.1 Court
General Division of the High Court1.2 Outcome
Ms. Chen's applications to discharge the Singapore Freezing Order and stay her ancillary disclosure obligations were dismissed.
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Liquidators sought a freezing order against Three Arrows Capital's co-founder's wife. The court dismissed the wife's application to discharge the order.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Three Arrows Capital Ltd | Applicant | Corporation | Application granted | Won | Leo Zhen Wei Lionel, Muhammed Ismail bin K.O. Noordin, Kwong Kai Sheng, T Abirami, Soon Wen Qi Andrea |
| Christopher Farmer | Applicant | Individual | Application granted | Won | Leo Zhen Wei Lionel, Muhammed Ismail bin K.O. Noordin, Kwong Kai Sheng, T Abirami, Soon Wen Qi Andrea |
| Russell Crumpler | Applicant | Individual | Application granted | Won | Leo Zhen Wei Lionel, Muhammed Ismail bin K.O. Noordin, Kwong Kai Sheng, T Abirami, Soon Wen Qi Andrea |
| Kyle Livingston Davies | Respondent | Individual | Freezing order remains in place | Lost | Saadhvika Jayanth |
| Kelly Kaili Chen | Respondent | Individual | Application Dismissed | Lost | Pillai K Muralidharan SC, Luo Qinghui, Tao Tao, Yau Chun Shin |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Philip Jeyaretnam | Judge of the High Court | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Leo Zhen Wei Lionel | WongPartnership LLP |
| Muhammed Ismail bin K.O. Noordin | WongPartnership LLP |
| Kwong Kai Sheng | WongPartnership LLP |
| T Abirami | WongPartnership LLP |
| Soon Wen Qi Andrea | WongPartnership LLP |
| Saadhvika Jayanth | Advocatus Law LLP |
| Pillai K Muralidharan SC | Rajah & Tann Singapore LLP |
| Luo Qinghui | Rajah & Tann Singapore LLP |
| Tao Tao | Yang Chunxun |
| Yau Chun Shin | Yang Chunxun |
4. Facts
- The liquidators of Three Arrows Capital Ltd sought a freezing order against Ms. Chen.
- Ms. Chen is the wife of Kyle Livingston Davies, co-founder of Three Arrows Capital Ltd.
- The liquidators alleged Ms. Chen held assets as a nominee for Mr. Davies.
- The liquidators claimed Ms. Chen owed over US$4.5m to the Company.
- The liquidators sought to set aside a purported credit of US$70m as an undervalue transaction.
- The liquidators also made a claim against Mr. Davies and Mr. Zhu worth around US$1.078bn.
- Ms. Chen applied to discharge the freezing order and stay her ancillary disclosure obligations.
5. Formal Citations
- Three Arrows Capital Ltd and others v Davies, Kyle Livingston and another, Originating Application No 1259 of 2023 (Summonses Nos 309 and 716 of 2024), [2024] SGHC 164
6. Timeline
| Date | Event |
|---|---|
| Three Arrows Capital Ltd co-founded by Mr. Zhu Su and Mr. Kyle Livingston Davies. | |
| Mr. Davies transferred shares in Three Arrows Fund Limited to Ms. Chen. | |
| Three Arrows Capital Ltd placed into liquidation in the British Virgin Islands. | |
| BVI Proceedings recognised as foreign main proceedings by the High Court of Singapore. | |
| Mr Davies transferred a villa in Dubai to Ms Chen. | |
| Liquidators obtained a worldwide freezing order over the assets of Mr. Zhu, Mr. Davies, and Ms. Chen in the BVI Proceedings. | |
| Liquidators filed HC/OA 1259/2023, seeking a domestic injunction to freeze the Singapore assets of Mr. Davies and Ms. Chen. | |
| Liquidators filed HC/SUM 3814/2023 for an interim freezing order without notice. | |
| Chan Seng Onn SJ granted the interim freezing order (HC/ORC 5969/2023). | |
| Ms. Chen filed HC/SUM 309/2024 to stay her ancillary disclosure obligations. | |
| Ms. Chen filed HC/SUM 716/2024 to set aside the Singapore Freezing Order. | |
| Hearing for SUM 309 and SUM 716 before Philip Jeyaretnam J. | |
| SUM 309 and SUM 716 dismissed; costs fixed at $25,000 in favour of the Liquidators. | |
| Reasons for decision provided by Philip Jeyaretnam J. |
7. Legal Issues
- Whether the Liquidators had made out a good arguable case on the merits against Ms Chen
- Outcome: The court found that the Liquidators had made out a good arguable case on the merits of the claims against Ms Chen, namely, the Debt Claims and Undervalue Transaction Claims.
- Category: Substantive
- Whether the Liquidators had shown a real risk of dissipation of assets by Ms Chen
- Outcome: The court accepted that there is and was a real risk of dissipation, justifying the urgency of the application made without notice and the continuance of the Singapore Freezing Order.
- Category: Substantive
- Whether the Liquidators had complied with their duty to give full and frank disclosure to the Judge at the without notice hearing for the Singapore Freezing Order
- Outcome: The court was satisfied that there was no breach of the obligation to provide full and frank disclosure.
- Category: Procedural
8. Remedies Sought
- Freezing Order
- Ancillary Disclosure
9. Cause of Actions
- Debt Claims
- Undervalue Transaction Claims
- Insolvent Trading Claims
10. Practice Areas
- Commercial Litigation
- Insolvency
- Asset Recovery
11. Industries
- Finance
- Cryptocurrency
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Bouvier, Yves Charles Edgar and another v Accent Delight International Ltd and another and another appeal | Singapore Court of Appeal | Yes | [2015] 5 SLR 558 | Singapore | Cited for the threshold of a “good arguable case” in the context of the grant or discharge of a Singapore Freezing Order. |
| JTrust Asia Pte Ltd v Group Lease Holdings Pte Ltd and others | Singapore High Court | Yes | [2018] 2 SLR 159 | Singapore | Cited for the threshold of a “good arguable case” in the context of the grant or discharge of a Singapore Freezing Order and that the court “must not try to resolve conflicts of evidence on affidavit”. |
| The “Vasiliy Golovnin” | Singapore Court of Appeal | Yes | [2008] 4 SLR(R) 994 | Singapore | Cited for the principle that a fact would only be material to the without notice hearing if they were objectively material to enabling the Judge to make an informed decision. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Civil Law Act 1909 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Freezing Order
- Liquidators
- Nominee
- Dissipation of Assets
- Good Arguable Case
- Full and Frank Disclosure
- TAFL Shares
- Debt Claims
- Undervalue Transaction Claims
- Insolvent Trading Claims
15.2 Keywords
- freezing order
- injunction
- cryptocurrency
- insolvency
- liquidation
- Three Arrows Capital
- asset dissipation
- nominee
- BVI proceedings
16. Subjects
- Civil Procedure
- Insolvency
- Freezing Orders
17. Areas of Law
- Civil Procedure
- Mareva Injunctions
- Insolvency Law