Speech by Mr Edwin Tong, Senior Minister of State for Law & Health, at the International Women’s Insolvency & Restructuring Confederation (IWIRC) 10th Anniversary Celebration
1. Thank you Catherine D’Alton, Debby Lim, Co-Chairs of the IWIRC Singapore Network.
2. Good evening. I’m glad to be here and to be part of your 10th anniversary celebrations.
3. As you’ve heard earlier, IWIRC has gone from strength to strength. It is a network now of more than 1,500 members, including lawyers, bankers, accountants, turnaround professionals, financial advisors, valuers – everyone connected to the restructuring space and of course, some insolvency practitioners.
4. The network has gone from strength to strength – really because of the determination of a few individuals. I think some of them you've heard about, others you've seen this evening.
5. In 2014, there was an IWIRC hosted panel on technology and professional services at the annual Singapore Insolvency Conference. There was also an all women’s panel on Financing and Effecting Successful Restructuring.
6. But it was really in 2017, when the Singapore network hosted the inaugural IWIRC Asia Restructuring and Insolvency Conference that I think people really stood up and understood that IWIRC is more than just about gender equality. While celebrating the achievements of women in restructuring, I think the greatest achievement will be that one day, we will have the women professionals as part of the restructuring space, as a given.
7. The achievements that we've come so far with really requires a lot of gratitude to the IWIRC Singapore members.
8. The efforts to put Singapore on the restructuring map really goes beyond just networking and social events, much of which I think the members have done, and have achieved a lot on. But I think there are a lot more contributions that we can thank the women for, both in Singapore and also beyond this field.
9. Let me just cite a few cases. I know some have been cited earlier by Catherine and Debby, but let me just say that in Diablo Fortune, one of the leading cases today, the case at first instance was decided by a female judge, and both lead counsel were women. The decision was upheld on appeal. It is a seminal case in the shipping context, addressing for the first time in Singapore, the legal nature of contractual liens over sub-freights or sub-hire.
10. Many here tonight would have been involved in cases which really also push the envelope in terms of jurisprudence on the recent reforms, and in developing Singapore's own brand of jurisprudence – which is really what we need to become a first class restructuring jurisdiction.
11. You've heard about Zetta Jet – Meiyen is instrumental in that. She was also involved in an online travel platform, Asiatravel.com Holdings Ltd, where there was super-priority financing. Debby in Hoe Leong Corporation – a pre-packaged scheme of arrangement. Debby again in China Sports International where a foreign company was placed under judicial management. And of course in Skaugen, Lauren’s case, which involved a moratorium under section 211B of the Companies Act.
12. These are all ground-breaking cases. They lead the way in terms of jurisprudence and development of the law, the development of Singapore law in the context of the provisions that we put in place in the 2017 amendments to the Companies Act, and which we will continue to refine, as our omnibus Insolvency Act comes into force shortly.
13. The growth of IWIRC Singapore is certainly testament to the capability and expertise of women restructuring professionals here. They also reflect the broader context of Singapore's increasing importance as a centre for debt restructuring.
14. These developments have been part of a very concerted push by the government working in a very concerted way with the stakeholders, working with the industry to make Singapore a regime that is attractive for restructuring work. To leverage on our first class judiciary, to use the established rules of law, to have neutrality in our jurisdiction, and ultimately fairness in adjudication.
15. We seek to continue to grow that space. it is not so much a competition between one jurisdiction or another, but I see it as really complementary. How we, in the Asian circuit, where a lot more investments are coming in into this part of the world, can work together to develop this space and to work complementarily, in the field of restructuring.
16. Let me just touch on a couple of the reforms that we've done, and also end off with some comments on the upcoming Insolvency Act.
17. Starting with the Companies Act that we refined in 2017, the enhanced regime is, if I may say so, a very forward looking, balanced, flexible debt restructuring regime in Asia. It's also been put together very quickly with the expertise of so many different stakeholders – lawyers, accountants, bankers, people who work at the front end or back end of restructuring work, those on the debtor side and those on the creditor side as well.
18. Ultimately, I think we put together a package that was, as far as possible, facilitative of rehabilitation of distressed companies. But at the same time, taking efforts to ensure that the regime strikes a balance between the differing interests of all stakeholders.
19. We will continue to study developments both locally, as well as abroad; in other jurisdictions, there have been continual advancements as well. So we will study those, take on board the best practices, contextualise them for Singapore, and we will continue to refine our legislation to make ourselves a lot more competitive and responsive also to industry needs.
20. We have had a strong start, I’m pleased to say, since the 2017 amendments.
21. There have been more than 100 applications to Court under the new provisions alone.
22. But beyond just the headline numbers, there have been a number of impactful restructurings that have benefited many stakeholders in Singapore.
23. Some SGX listed companies, such as Nam Cheong and Hoe Leong, have benefited from the enhanced moratorium, providing much needed breathing space for them to rework the debts and find better solutions for stakeholders of the companies. Further, in Hoe Leong, a “pre-packaged” scheme of arrangement was utilised to restructure S$80 million of debt within just two months. Something that can be done quickly, expeditiously as well, always benefits the different stakeholders in a restructuring.
24. More importantly, our enhanced regime has also been recognised by foreign courts. A few months ago in March 2019, the High Court of England and Wales recognised Singapore’s enhanced moratorium granted by the High Court in Singapore to H & CS Holdings, as a foreign main proceeding under UK’s enactment of the UNCITRAL Model Law. It is a landmark decision and certainly addresses any prior uncertainty as to whether the courts in England would recognise Singapore’s new moratorium order. This certainly enhances our position as a viable, serious, forward-thinking restructuring regime.
25. Looking forward, we have the Insolvency, Restructuring and Dissolution Act – a bit of a mouthful, so we call it the IRDA. You know Singaporeans; Singaporeans love our acronyms. So, henceforth it shall be the IRDA.
26. This Act seeks to consolidate corporate and personal insolvency. We used to have, as practitioners, to refer to so many different pieces of legislation. It also establishes a regulatory regime for insolvency practitioners. And I think that's important because as we mature as a jurisdiction, and we look at cases that come from beyond our shores, I think we must have a strong framework to regulate insolvency practitioners and that's what IRDA will seek to do. It also continues the enhancement of Singapore’s corporate rescue framework, and I'll just touch on a couple of points.
27. We have approximately 50 pieces of subsidiary legislation to be drafted, amended or revoked, and also new processes required for the various supporting agencies’ IT systems. And this will take time. I say this because I'm continually being asked by people: you know, the government passed the omnibus Insolvency Bill some months ago, what's happened to it? The reason for that is because it has taken a real army of officers from MinLaw, Courts and IPTO and so on, to look at it and to make sure that all the provisions are cross-checked against each other, and also, the key subsidiary legislation is drafted properly.
28. But I will say that practitioners can look forward to various new pieces of subsidiary legislation such as –
a. Assignment of proceeds of an action, which fleshes out the process by which an assignment of proceeds from some actions brought by a judicial manager or liquidator, can be done.
b. There are also going to be provisions that govern electronic correspondence and meetings. This will be welcome to many people. You now no longer need to attend meetings in person in some cases. This addresses novel provisions in the Act which provide for remote attendance at certain meetings and also, the passing of resolutions by means of correspondence. This helps in terms of convenience, ease of transactions, and also in situations where parties might be in different jurisdictions.
29. In addition, one of the key pieces that we were looking at, that we are preparing for, is the restriction on ipso facto clauses that has been introduced into our legislation. While seeking to maintain the efficacy of the restriction to support a company's restructuring efforts, certain contracts will be exempt, and let me just explain this a little bit.
30. In formulating the amendments for the ipso facto regime, we studied the experience in other jurisdictions – we're not the first jurisdiction to have this and I think we won’t be the last. We looked at jurisdictions that have long had the ipso facto provisions like the US and Canada, or Australia, which had just introduced it last year.
31. We intend to take guidance from these jurisdictions as we refine and look at which types of contracts ought to be exempted from these provisions. We also look at what is happening with the financial markets, and take guidance from leading practitioners who are well accustomed to these regimes – and I am not saying just those in Singapore – but also those who operate in those jurisdictions that already have the ipso facto provisions.
32. Ultimately, we want to strike a balance. We want to allow creditors in the right cases to rely on the ipso facto provisions, which are built into their contracts, and in many cases, have been in their contracts for a long period of time. To take an example out of the Australian exemption provision. Bonds, for instance, will be accorded the same treatment under our regime as it is in Australia. We will continue to look at the spectrum of cases that should fall within the exemption provisions.
33. But at the same time, let me just stress also that we do not want to allow a genuine restructuring to be derailed only because the debtor might have sought judicial intervention in applying for a moratorium or to try to get a restructuring done, because the whole tenor of these amendments is to try to facilitate, as far as possible, genuine restructurings. So if there is a genuine restructuring and the company is unable to meet obligations only because it is trying to work out the restructuring, then I think the ipso facto provisions, in the way we have envisaged them, will apply.
34. We recognise the importance of these exemptions in practice, in much of the work that you do. So we will draft the subsidiary legislation around these exemptions, and we will also invite market commentary and industry feedback on it as well. And that will be done soon.
35. Let me touch a little bit on some of the other reforms that we have done, such as the Judicial Insolvency Network, which has been helpful. It is a very novel judicial innovation that has helped, especially in the context of cross-border cases. It has been used, at least in the occasion of Ezra Holdings – I know some of you are involved in that – where there was a lot of communication between the High Court in Singapore and also the US Bankruptcy Court for the Southern District of New York, to jointly manage the insolvency of Ezra Holdings. Although I understand the case did not proceed further for other reasons, it illustrates its utility.
36. Second, on thought leadership – which is a point that was touched on earlier by the two co-chairs – I think that is a very important aspect. And on this, I think you all know, that INSOL International has announced back in April that it will locate its first office outside London, in Singapore. And that will be set up shortly. And in a matter of weeks, we should expect that they will make an announcement as to when the office can be opened.
37. It adds a lot to the insolvency and restructuring scene in Singapore to have a giant like INSOL located in Singapore, along with the peripheral services that it has. It is widely regarded as one of the world's leading restructuring, insolvency and turnaround associations, comprising over 40 member associations and over 10,500 members.
38. The decision to locate INSOL’s office in Singapore recognises the potential in Singapore and in our rules, to develop synergies with and also create opportunities for INSOL in Singapore. And I do encourage our professional organisations, whether it is IWIRC, IPAS or others, to collaborate with INSOL. To leverage on the presence of INSOL, to leverage on their membership and their reach, to further enhance thought leadership in Singapore.
III. CAPTURING OPPORTUNITIES
39. In the longer term, against the backdrop of the various measures I've spoken about to enhance Singapore's debt restructuring space, we see some potential for growth in this area. I will just pick up on two points.
40. First, I'm not sure if you are aware that there was a study conducted by the Singapore Academy of Law on governing law: choice of governing law, which kind of entities, which in-house counsel prefer Singapore law, who would prefer UK law, US law and so on. It concluded this year and released recently. It has made some interesting findings.
41. That Singapore law is gaining traction as an internationally accepted choice for cross-border transactions; just as English law and New York law were widely used outside of the UK and US. The desire to tap into Singapore's established legal system and jurisprudence is one of the key reasons for parties wanting to choose Singapore law. We are very encouraged by that development and finding and certainly want to push the use of Singapore law a lot more. And I think ultimately also in the restructuring space.
42. Second, as highlighted by a 2018 IMF report, whilst Asia in the longer term is expected to see tremendous growth in the coming decades, there are also downsides in the near and medium term.
43. In particular, based on a study by Oliver Wyman in 2017, something like US$250 billion worth of debt will be available for restructuring across various key Asia-Pacific markets in the near term.
44. In this context, I believe IWIRC provides valuable networks for practitioners who work across different jurisdictions; providing perspective on the different cultural, ethnic, and maybe even linguistic needs, of debtors and creditors in the Asia Pacific. And I think you are well placed to take advantage of those opportunities.
45. On that, I think IWIRC is not content with just growing its footprint in Singapore. I think it has done well by expanding in Asia, by assisting in the formation of the India and also the Malaysia networks. You have also chosen to collaborate with other women's networks, such as the Singapore Arbitration Women, and also WISTA, to organise inter-disciplinary, cross-disciplinary seminars. I think that ultimately it recognises that, it is not just in the restructuring space that IWIRC has a role.
46. I hope to see practitioners take up the various opportunities that you have, in particular, as I mentioned, INSOL, but I also want to recognise as the co-chairs have done, three of IWIRC Singapore’s members, Debby Lim, Sheila Ng and Jo Tay. They have become the first Singapore-qualified practitioners to embark on the Global Insolvency Practitioners’ Course. The qualification received will bestow a fellowship from INSOL on them. It is a rare distinction already as it is, and even rarer for those in Asia. I also understand that Jo finished top three in the class. It is a strong recognition of the role that our insolvency practitioners – in particular women – can play in this space and many congratulations to all of you!
47. Finally, these developments bode well. I mentioned thought leadership and I want to come back to it.
48. In Zetta Jet, Justice Aedit Abdullah recognised the US bankruptcy proceedings of a luxury plane operator under the UNCITRAL Model Law. This decision was named the most important cross-border recognition decision at the Global Restructuring Review Awards in 2019. Congratulations. the people behind and who worked very hard on this, you know who you are.
49. The US case of Agrokor, I think some of you may have worked on this as well, the US Bankruptcy Court for the Southern District of New York agreed with the views expressed by Justice Kannan Ramesh, and quoted some passages in his decision in Pacific Andes on the Gibbs principle.
50. These are just some examples of how we need to be developing that space, taking our role in thought leadership and legal jurisprudence around the world. These developments can only bode well for the future.
51. I want to reiterate that the Singapore network has done tremendously well in the few short years that it has been in being.
52. Kudos to the founding members and to everyone else who has come on board.
53. But more importantly I think all this will not succeed without the support of the broader community in the restructuring space.
54. On that note, thank you very much all of you. Enjoy your dinner!
 Duncan, Cameron Lindsay and another v Diablo Fortune Inc and another matter  SGHC 172.
 Re: Zetta Jet Pte Ltd and others (Asia Aviation Holdings Pte Ltd, intervener)  SGHC 53.
 Tan Meiyen, Past Chair of IWIRC Singapore Network; Head of
Restructuring & Insolvency, Oon & Bazul.
 Unreported judgment. Case No.: HC/OS 964/2018.
 Debby Lim, Co-Chair of IWIRC Singapore Network; Partner, Shook
Lin & Bok.
 Unreported judgment. Case No.: HC/OS 14/2018.
 Unreported judgment. Case No.: HC/OS 436/2018.
 Re IM Skaugen SE and other matters  SGHC 259.
 Lauren Tang, Partner, Virtus Law.
 Insolvency, Restructuring and Dissolution Act 2018 (No. 40 of
 H & CS Holdings Pte Ltd v Glencore International AG
 EWHC 1459 (Ch).
 Insolvency & Public Trustee’s Office.
 Insolvency Practitioners Association of Singapore.
 Women’s International Shipping & Trading Association.
 Sheila Ng, Partner, Rajah & Tann.
 Jo Tay, Senior Associate, Allen & Gledhill.
 In re: Agrokor DD et. al.  Case No.
 Pacific Andes Resources Development Ltd  SGHC