Goh Thien Phong v UT Singapore Services: Scheme of Arrangement & Creditor Classification
The High Court of Singapore heard an application by Goh Thien Phong and Chan Kheng Tek, the liquidators of Hin Leong Trading (Pte) Ltd (in compulsory liquidation) ("HLT"), to sanction a scheme of arrangement. UT Singapore Services Pte Ltd ("UTSS") opposed the scheme, arguing that creditors could not be classified as 'potentially secured creditors.' The court sanctioned the scheme and dismissed UTSS's application to set aside the convening order. The court found that the scheme was reasonable and that UTSS's objections were without merit.
1. Case Overview
1.1 Court
General Division of the High Court of the Republic of Singapore1.2 Outcome
Scheme Sanctioned; Setting-Aside Application Dismissed
1.3 Case Type
Insolvency
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Singapore court sanctioned a scheme of arrangement for Hin Leong Trading, addressing whether potentially secured creditors can be included.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| UT Singapore Services Pte Ltd | Non-party, Respondent, Applicant | Corporation | Application Dismissed | Lost | |
| Goh Thien Phong | Applicant | Individual | Application Granted | Won | |
| Chan Kheng Tek | Applicant | Individual | Application Granted | Won | |
| Hin Leong Trading (Pte.) Ltd (in compulsory liquidation) | Applicant | Corporation | Application Granted | Won | |
| DBS Bank Ltd | Non-party | Corporation | Neutral | Neutral | |
| Skomer Investments Designated Activity Company | Non-party | Corporation | Neutral | Neutral | |
| Trafigura Pte Ltd | Non-party | Corporation | Neutral | Neutral | |
| The Hongkong and Shanghai Banking Corporation | Non-party | Corporation | Neutral | Neutral | |
| ING Bank N.V., Singapore Branch | Non-party | Corporation | Neutral | Neutral | |
| Cooperative Rabobank U.A., Singapore Branch | Non-party | Corporation | Neutral | Neutral | |
| Societe Generale, Singapore Branch | Non-party | Corporation | Neutral | Neutral | |
| Credit Agricole Corporate and Investment Bank, Singapore Branch | Non-party | Corporation | Neutral | Neutral | |
| Oversea-Chinese Banking Corporation Limited | Non-party | Corporation | Neutral | Neutral | |
| ABN Amro Bank N.V. | Non-party | Corporation | Neutral | Neutral |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Andre Maniam | Judge | Yes |
4. Counsels
4. Facts
- HLT was in the business of oil trading and stored oil at UTSS's terminals.
- UTSS claimed a general lien over oil at its terminals belonging to HLT.
- HLT was placed in interim judicial management on 27 April 2020.
- Various third parties asserted ownership of and/or security over some of the oil.
- The liquidators proposed a scheme for the distribution of US$80 million of the Uninjuncted Proceeds to HLT’s creditors.
- Creditors were divided into Potential Secured Creditors and Unsecured Creditors.
- UTSS opposed the scheme, arguing that creditors could not be classified as 'potentially secured creditors.'
5. Formal Citations
- Re Hin Leong Trading (Pte) Ltd (in compulsory liquidation) and another matter, Originating Application No 555 of 2024 (Summons No. 1957 of 2024), [2024] SGHC 256
6. Timeline
| Date | Event |
|---|---|
| HLT placed in interim judicial management | |
| UTSS commenced interpleader proceedings in HC/OS 489/2020 | |
| HLT's liquidators commenced HC/SUM 4108/2021 | |
| HLT's liquidators commenced HC/SUM 1003/2022 | |
| Scheme presented to creditors at a dialogue session | |
| HLT’s liquidators applied by OA 555 for leave to convene a Scheme Meeting | |
| Copy of Convening Application and supporting affidavit provided to Scheme Creditors | |
| Court directed creditors to file reply affidavits by 21 June 2024 | |
| Convening Application heard; Convening Order granted | |
| UTSS applied by HC/SUM 1957/2024 to set aside the Convening Order | |
| Court declined to defer the Scheme Meeting | |
| Scheme Meeting held | |
| Liquidators applied by HC/OA 726/2024 for the Scheme to be approved and sanctioned | |
| Court granted the Sanction Application and dismissed the remaining prayers of the Setting-Aside Application |
7. Legal Issues
- Creditor Classification
- Outcome: The court held that it was permissible to classify creditors as 'potentially secured' in the scheme of arrangement.
- Category: Substantive
- Sub-Issues:
- Appropriateness of classifying creditors as 'potentially secured'
- Requirements for including creditors with contingent claims in a scheme of arrangement
- Related Cases:
- [2008] 3 SLR(R) 121
- [2012] 2 SLR 213
- Sanction of Scheme of Arrangement
- Outcome: The court sanctioned the scheme of arrangement, finding that all requirements were met.
- Category: Substantive
- Sub-Issues:
- Whether the statutory requirements for sanctioning a scheme of arrangement were met
- Whether the scheme was one that an intelligent and honest man would reasonably approve
- Related Cases:
- [2008] 3 SLR(R) 121
- Admissibility of Objections at Sanction Stage
- Outcome: The court held that it was not obliged to entertain objections raised for the first time at the sanction stage without a good explanation.
- Category: Procedural
- Sub-Issues:
- Whether objections to creditor classification can be raised for the first time at the sanction stage
- The need for a good explanation for not raising objections at the convening stage
- Related Cases:
- [2012] 2 SLR 213
8. Remedies Sought
- Sanction of Scheme of Arrangement
- Setting Aside of Convening Order
9. Cause of Actions
- Scheme of Arrangement
10. Practice Areas
- Restructuring
- Insolvency Litigation
- Commercial Litigation
11. Industries
- Oil Trading
- Shipping
- Finance
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| The Oriental Insurance Co Ltd v Reliance National Asia Re Pte Ltd | Court of Appeal | Yes | [2008] 3 SLR(R) 121 | Singapore | Cited for the requirements for sanctioning a scheme of arrangement. |
| The Royal Bank of Scotland NV (formerly known as ABN Amro Bank NV) and others v TT International Ltd and another appeal | Court of Appeal | Yes | [2012] 2 SLR 213 | Singapore | Cited regarding the timing of objections to creditor classification in scheme of arrangement proceedings. |
| UDL Argos Engineering & Heavy Industries Co Ltd v Li Oi Lin | N/A | Yes | [2001] 3 HKLRD 634 | Hong Kong | Discussed in relation to the practice of leaving issues of creditor classification to the sanction hearing, but not followed. |
| Practice Statement (Companies: Schemes of Arrangement) | N/A | Yes | [2002] 1 WLR 1345 | England | Cited for the English approach to determining whether to order meetings of creditors and the appropriate composition of those meetings. |
| Re Smile Telecoms Holdings Ltd and another | High Court | Yes | [2022] EWHC 740 (Ch) 519 | England and Wales | Cited for the principle that the court is not required to conduct the evidential exercise again at the sanction hearing if proper notice of the convening hearing is given and there is no material change in circumstances. |
| Re ColourOz Investment 2 LLC and others | N/A | Yes | [2021] BCLC 55 | N/A | Discussed regarding whether the court would always have to address a class question even if raised at sanction, but the approach in Smile Telecoms was preferred. |
| DX Holdings Ltd | N/A | Yes | [2010] EWHC 1513 (Ch) | England and Wales | Cited for the principle that it would be regrettable for a creditor to ask the court to make a different value judgment at the sanction hearing when that creditor failed to file evidence at the convening stage. |
| Re Hawk Insurance | N/A | Yes | [2001] 2 BCLC 480 | N/A | Cited for the principle that schemes can include claims with elements of contingency and futurity, and which are of uncertain quantum. |
| Re T&N Ltd and other companies | N/A | Yes | [2006] EWHC 1447 (Ch) | England and Wales | Cited as an example where persons with potential claims for damages for personal injuries arising out of exposure to asbestos were included in a scheme. |
| Pathfinder Strategic Credit LP and another v Empire Capital Resources Pte Ltd and another appeal | Court of Appeal | Yes | [2019] 2 SLR 77 | Singapore | Cited for the principle that the appropriate comparator is the most likely scenario in the absence of scheme approval. |
| Wah Yuen Electrical Engineering Pte Ltd v Singapore Cables Manufacturers Pte Ltd | N/A | Yes | [2003] 3 SLR(R) 629 | Singapore | Cited for the principle that creditors' rights must not be so dissimilar that they cannot consult together with a view to their common interest. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Companies Act (Cap 50, 2006 Rev Ed) | Singapore |
| Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) | Singapore |
| Companies Act 1967 (2020 Rev Ed) | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Scheme of Arrangement
- Potential Secured Creditors
- Unsecured Creditors
- Convening Order
- Sanction Order
- Uninjuncted Proceeds
- General Lien
- Interpleader Proceedings
- Liquidators
15.2 Keywords
- scheme of arrangement
- creditor classification
- insolvency
- Hin Leong Trading
- UT Singapore Services
- security interests
- liquidation
17. Areas of Law
| Area Name | Relevance Score |
|---|---|
| Insolvency Law | 90 |
| Schemes of Arrangement | 85 |
| Restructuring and Dissolution | 80 |
| Winding Up | 75 |
| Commercial Disputes | 60 |
| Corporate Law | 40 |
| Arbitration | 30 |
| Breach of Contract | 20 |
| Contractual terms | 20 |
16. Subjects
- Insolvency
- Schemes of Arrangement
- Company Law