Strengthening Ties: Singapore Leads The Way For Future Indian Insolvency Cases

What prompted the Resolution Professional to knock on the doors of the Singapore Court and what does this decision mean for Indian businesses that may want to avail themselves of solutions offered by Singapore's restructuring regime?

Compuage Infocom Limited (“CIL”), an Indian technology distribution company, incorporated under the Companies Act, 1956 (now Companies Act, 2013) of India, operates in Singapore through two entities: a branch office, registered as a “foreign entity” but managed from India (“CIL SG Branch”) and a wholly owned subsidiary, Compuage Infocom (S) Pte. Ltd. (“CIL SG”). Although both entities are managed from the same address, they are distinct in form and effectively controlled from India.

In December 2024, an Originating Application No. 1272 of 2024 (“OA 1272”) was filed before the General Division of the High Court of Singapore (“Court”), seeking recognition of the Corporate Insolvency Resolution Process (“CIRP”) of CIL ongoing in India and twofold reliefs: first, to obtain the bank statements of two current accounts held by CIL's Singapore branch with HSBC Bank Singapore Limited, and second, Mr. Gajesh Labhchand, who was appointed as the Resolution Professional (“RP”) by the National Company Law Tribunal (“NCLT”), India in the CIRP of CIL, be appointed as the authorised signatory of those accounts. Since the bank refused to disclose any account information or allowed changes to its mandate, without obtaining judicial recognition of Indian insolvency orders by the Court, it led the RP to file this instant application. These measures flow from the RP's obligation to discharge his statutory responsibilities of immediate custody and control over all assets and business records of the corporate debtor, as mandated under Section 25(2)(a) of the Insolvency and Bankruptcy Code, 2016 (“IBC”).

The following three key reliefs were sought:

1. Recognition of CIL's CIRP as a “foreign proceeding” under Article 17 of the Model Law.

2. Recognition of the RP as a “foreign representative” under Article 2(i) of the Model Law, granting him authority to act on behalf of CIL's estate.

3. Authorization under Article 21(1)(e) of the Model Law to take control of and repatriate CIL's Singapore assets to India for distribution amongst creditors.

Among the three reliefs sought, the Court granted the first two but declined the third at this stage of the proceedings.

Reluctance to Grant Repatriation: A Balanced Judicial Approach

Taking a measured, step-by-step approach, the Court first recognised CIRP as a foreign proceeding and the RP as a foreign representative. The Court declined to authorise the additional relief of repatriating Singapore-based assets or their proceeds to India under Article 21(1)(e) of the Model Law, which the RP had sought for the benefit of the CIRP creditors. The refusal was grounded in the safeguards provided under Article 22(1) of the Model Law. The Court emphasized that any attempt to repatriate assets must follow due process, including notice to Singapore-based creditors, affording them an opportunity to be heard and conducting a separate hearing with their participation.

At the same time, the Court granted the RP access to relevant bank statements and records and authorised him as the signatory to CIL's accounts. In doing so, the Court observed that the funds in CIL's HSBC bank accounts, along with the related financial records, constituted "property" as defined under Section 2(1) of the IRDA, empowering the Court to hear OA 1272 under Article 4(2)(a)(ii) of the Model Law. ^[1]

In granting partial relief and recognising the CIRP, the Court also affirmed that it met the threshold under Article 6 of the Model Law as none of the reliefs contradicted public policy.

This decision reflects the protective approach adopted by the Singapore judiciary in cross-border insolvency matters by striking a careful balance between facilitating cooperation with foreign proceedings and safeguarding the interests of local stakeholders. Also, the holistic and pragmatic nature of this balanced application of the Model Law ensures that the repatriation of the assets is only permitted through judicial oversight and fair creditor engagement, while also reinforcing the authority of any foreign representative including the RP who is a reverential authority over the estate in the home jurisdiction to access and manage the foreign assets of the estate. This highlights Singapore's role as a cooperative yet creditor-conscious jurisdiction in international insolvency proceedings.

Recognizing Foreign Insolvency Proceedings under Singapore's Legal Framework and the Model law

In the efforts to facilitate a domestic insolvency proceeding, this application of the Model Law builds bridges recognizing cross-border insolvency through the recognition and empowerment of foreign courts. In this case, the Court identified the first port of call as determining whether CIL's CIRP qualified as a foreign main proceeding, with its Centre of Main Interests (“COMI”) situated in India. Alongside, another pivotal issue arose, whether NCLT qualifies as a “foreign court” under Article 2(e) of the Model Law.

The definition of “foreign court” as provided under Article 2(e) of the Model Law and in the light of Paragraph 74 of the Guide to Enactment of the Model Law, reflects an intrinsic connection between the concepts of “foreign proceedings” and “foreign courts” and includes not only judicial authorities but also non-judicial ones. This broad interpretation aligns with the wide recognition granted to foreign proceedings, in accordance with the objectives of the Model law.

To address these issues, the Court referred to the decision in Ascentra Holdings Inc (in official liquidation) and others v SPGK Pte Ltd [2023] 2 SLR 421 (“Ascentra Holdings”), which mandates five requirements for a proceeding to qualify as a “foreign proceeding” under the Model law. The process must be collective in nature, involve a judicial or administrative proceeding in a foreign state and be conducted under a law relating to insolvency or debt adjustment. Further, its aim must be reorganising or liquidating the debtor, with the property and affairs of the debtor company being subject to the control or supervision of a foreign court in that proceeding. The following sections explore how India's CIRP aligns with each criterion under the Model Law, thereby justifying its recognition as a “foreign proceeding”.

The “Collectivity” Criterion

Insolvency is not an individual action, but a collective affair to resolve the debtor's affairs. This process is governed by several factors, such as whether, the debtor has been wholly or partially divested of its assets, an insolvency practitioner has been appointed, the debtor's assets and affairs are under court supervision and individual enforcement proceedings are temporarily stayed by law.

India's insolvency framework under the IBC incorporates all these elements. It mandates that upon initiation of CIRP, the RP maintains a list of claims of all creditors, invited through a public announcement under Sections 13 & 15 of the IBC, marking the commencement of a collective process. The RP is then obligated to publish it on the company's official website in accordance with Regulation 13 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”). The RP also takes control of all the debtor's assets under Section 18 and 25(2)(a) of IBC.

A detailed Information Memorandum is prepared, which serves as a comprehensive document detailing the company's financial standing and other key information related to creditor's claims in line with Section 29 of IBC and Regulation 36 of the CIRP Regulations, before inviting resolution plans from prospective Resolution Applicants. The proposed plan is subsequently presented to the Committee of Creditors (“CoC”), a body comprising all the financial creditors. The CoC is responsible for evaluating its feasibility and viability and carefully assesses the plan's potential impact on both the creditors and the company's future. Upon thorough evaluation, the CoC may either approve the Plan with a minimum voting threshold of 66% or reject it, in accordance with Section 30(4) of the IBC.

This framework is not only judicially structured but also inherently collective in nature as it entails active participation of all stakeholders and simultaneously safeguarding the rights and claims of creditors through a fair and transparent process, thus fulfilling one of the fundamental requirements of the Model Law.

It is illuminating to see how the Court has interpreted the criterion of 'collectivity', affirming that CIRP qualifies as a “collective” proceeding under Article 2(h) of the Model Law.

Administrative or Judicial Proceeding

The classification of NCLT as a “foreign court” under Article 2(e) of the Model Law is of paramount importance in evaluating whether NCLT possesses the authority competent to control or supervise a foreign proceeding. This precedes determining whether CIRP is an administrative or a judicial proceeding.

The NCLT is a quasi-judicial body, established by the Ministry of Corporate Affairs. As the adjudicating authority under the IBC, the NCLT exercises comprehensive judicial powers at various stages of the CIRP. These powers encompass admitting or rejecting a creditor's petition to initiate CIRP under Section 30 of IBC, declaring a moratorium under Section 14 of IBC to prevent the continuation of any legal actions against the debtor, appointing and confirming an Interim Resolution Professional (“IRP”) under Section 16 of IBC and assessing the Resolution Professional's compliance with Section 30 of the IBC before approving the final Resolution Plan. Further, the powers of the NCLT are wide enough and play a critical role in also adjudicating any interim applications filed during the CIRP process. Thus, the NCLT unquestionably falls within the definition of a 'foreign court', and the CIRP, being a proceeding initiated and supervised by the NCLT, constitutes a judicial or administrative proceeding in a foreign state, as outlined in the Model Law.

Thus, it is not the name of the court that matters, but the nature of the powers it exercises.

Proceedings conducted under an Insolvency law

The NCLT takes the wheel and charts the course, steering the process from ensuring compliance of the Resolution Plan under Section 30 of the IBC, to overseeing and managing its effective implementation. Through these, while ensuring that the debtor's affairs are managed in accordance with the approved plan, NCLT also safeguards the interests of all the stakeholders. This whole process fulfils all three key requirements as envisaged in Ascentra Holdings, i.e., conducting proceedings under a law relating to insolvency or debt adjustment, aimed at reorganizing or liquidating the debtor, with the debtor's property and affairs under the control and supervision of a foreign court.

In Re Zetta Jet Pte Ltd and others (Asia Aviation Holdings Pte Ltd, intervener) [2019] 4 SLR 1343 (“Re Zetta”) the Court while determining the COMI, considered several relevant factors. These included the location from which control and directions were exercised, the location of creditors, the place of operations, dealings with third parties and the governing law. The Court emphasized that such factors must reflect a degree of permanence or intended permanence. In this case, both the entities, a branch office, CIL SG Branch and a wholly owned subsidiary, CIL SG, operate in Singapore; however, their management and control are exercised from India. Further, a significant majority of creditors were based in India and CIL's property and affairs remained under the supervision of the NCLT throughout the CIRP.

In line with the approach adopted in Re Zetta Jet, and finding no sufficient evidence to rebut the presumption, the Court held India to be the COMI.

Recognition of the RP as a Foreign Representative under Article 2(i) of the Model Law

Another critical question is whether the RP qualifies as a “foreign representative” under Article 2(i) of the Model Law, i.e., “a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor's property or affairs, or to act as a representative of such foreign proceeding.”

The Court found that the RP satisfied this threshold. In the Indian insolvency framework, the RP plays a central and comprehensive role in the CIRP. Section 23 of the IBC entrusts the RP with the responsibility of managing the affairs of the corporate debtor as a going concern during the CIRP and is further empowered under Section 18 of the IBC to take control and custody of the debtor's assets. The RP exercises wide powers, from running the business, managing operations, verifying creditors' claims, constituting a CoC, raising interim finance with CoC approval, appointing professionals, and facilitating the entire resolution process. These wide powers are not merely administrative but reflective of a comprehensive mandate to steer the reorganisation of the debtor's affairs.

The functional responsibilities of the RP closely mirror the duties and responsibilities of the “foreign representative” as contemplated under Article 2(i) of the Model Law. Also, the insolvency functionaries including administrators, managers, supervisors, and liquidators are recognised as “foreign representatives”, as long as they fulfil the provided duties. Therefore, this expanding vision of recognition to the insolvency functionaries along with the appointment of the RP by the NCLT and the statutory powers vested under the IBC, empowers the RP to administer the reorganisation of the corporate debtor.

Thus, the essence of the role takes precedence over its nomenclature.

The Road Ahead: Singapore's Stance to Cross-Border Assistance and Relief

The recent jurisprudence, as exhibited in Re Terraform Labs Pte Ltd [2025] SGHC(I) 4 (“Re Terraform”) reflects Singapore's commitment and its evolving role as a nodal jurisdiction for cross-border insolvency and restructuring. In Re Terraform, the Court granted an “appropriate relief”, affirming the “expansive and open-ended” nature of its discretion under Article 21(1) of the Singapore Model Law, while clarifying that such discretion of broad powers under Article 21(1) is circumscribed in Article 22(1). This does not extend to parochial attitudes such as ring-fencing assets to prioritise local creditors over foreign ones but ensures fair and equitable treatment of all creditors wherever situated.

The commercially attuned approach in this judgment reflects Singapore Courts' commitment to adopting a broad and flexible interpretation of the Model Law, and positions Singapore as a well-balanced venue for facilitating cross-border cooperation effectively thereby reinforcing its status as a creditor-and-debtor-friendly hub. The well-established framework serves as a beacon for future engagements between India and Singapore in the fold of restructuring businesses with related entities, assets or stakeholders in both jurisdictions.

Authors: Ms. Smitha Menon (Head of the Restructuring & Insolvency Practice and a Partner in the International Arbitration and India Practices) and Ms. Kajal Bhatia – (Associate, Foreign Lawyer, Restructuring & Insolvency Practice) WongPartnership LLP, Singapore. Views are personal.

1. Under Article 4(2)(a)(ii) of the Model Law, the Singapore High Court will have jurisdiction to recognise foreign proceedings if the company has any nexus or property situated in Singapore. ↑