- Singapore Accepts Recommendations to Strengthen Debt Restructuring
- August 17, 2016
- Law Firm: Duane Morris LLP - Philadelphia Office
On 20 July 2016, Singapore’s Ministry of Law accepted the recommendations of the Committee to Strengthen Singapore as an International Centre for Debt Restructuring (the “Committee”).
All 17 of the recommendations made by the Committee were accepted by the Ministry of Law.
Key Recommendations Accepted by the Ministry of Law
1. Implementing processes and procedures to promote quick, cost-efficient and certain restructurings should be developed, including:
a.Provisions for the invocation of Singapore courts’ jurisdiction over foreign corporate debtors;
b. Provisions granting automatic moratoriums in support of restructuring, including extensions to related entities;
c. Provisions for the consolidation of related insolvency and restructuring proceedings before the same judge; and
d. Provisions for pre-packaged restructurings.
2. Setting up a dedicated bench of judges for restructuring proceedings, which would take a judge-led approach to managing restructuring cases.
3. Allowing disputes arising out of insolvency and restructuring to be resolved through alternative dispute resolution processes, such as mediation and arbitration.
4. Allowing super-priority liens in Singapore, subject to approvals from the courts.
The acceptance of the Committee’s recommendation is a boost in Singapore’s bid to become a debt restructuring hub, and it is likely to be exciting to see how and when these recommendations will be implemented.