In Re Zipmex Co Ltd,(1) the Singapore High Court published remarks on the jurisdiction of the Court over foreign companies under sections 64 and 65 of the Insolvency, Restructuring and Dissolution Act 2018. These sections govern the moratoria regime in restructuring situations, allowing a company in difficulties the breathing space to put together a rescue plan and avoid a scramble among creditors to liquidate the company.


The applicants were companies in the Zipmex group (Zipmex), comprising entities from Singapore, Thailand, Australia and Indonesia. Zipmex operates a cryptocurrency exchange platform, which is accessed through the Zipmex app, on which various cryptocurrencies are traded. The various country entities were established ostensibly to comply with local market regulations.

Zipmex is one of the latest victims of a crypto contagion sparked by the collapse of the TerraUSD stablecoin. Zipmex sought a five-month extension of the moratoria operating in each Zipmex company's favour under sections 64 and 65 of the Act.


The Court granted a shorter extension, of three months, and provided brief remarks on the jurisdiction of the Court over the applicants, comprising foreign entities, which turned on the existence of a substantial connection to Singapore.

Interestingly, a recording of these proceedings was uploaded to YouTube, to address the needs of the large number of creditors who were account holders in these various entities, most of whom were situated outside Singapore.

While much of the application did not raise substantial issues, the Court provided brief remarks on the issue of a "substantial connection" to highlight considerations for future applications.

The Court's jurisdiction over foreign companies stems from section 63 of the Act, which includes within the term "company" any corporation liable to be wound up under the Act. Section 246(1) of the Act, in turn, provides that an unregistered company, which is a foreign company, may be wound up only if it has a substantial connection with Singapore. Such substantial connection may be established by several factors, including that Singapore is the centre of main interests (COMI) of the company.

The Court summarised observations made about the determination of COMI in a previous case:

  • what COMI factors are objectively ascertainable by potential creditors is a material consideration;
  • what weight would be given by such a creditor to a particular factor;
  • the focus is on the practical, with activities on the ground being more important than the legal structure;
  • the factors should have an element of settled or intended permanence; and
  • ultimately, the Court considers on a robust basis, where, on balance, the centre of gravity of the material factors is located.

Applying the above considerations, the Court found that the location of the ultimate use of the crypto assets, the use and provision of a specific service through the Singapore entity, and the locus of management in Singapore established that the COMI for each of the entities was Singapore.

The Court also considered that, aside from COMI, substantial connection could be established based on other grounds and, particularly, that substantial assets were held with the Singapore entity – that is, the lex situs of the crypto assets was Singapore. Moreover, Singapore was the nerve centre of the business and the focus of investments. The Court, however, declined to further explain what counts as "substantial connection" given the absence of contrary submissions.

Townhall, engagement, creditor committees, independent advisors
The Court also provided guidance on the issue of "engagement" where applicants face the situation of a large number of unrepresented creditors. The Court highlighted that engagement is important and would be under scrutiny by the courts when an application for extension is made.

The Court clarified that it would take a practical approach, but stressed that applicants must give serious and comprehensive consideration to ensure proper communication and engagement with creditors. The Court acknowledged that there is no checklist to be followed and what may be needed will vary from case to case – but applications must seriously consider each of the following guidelines, and be prepared to respond to the Court as to why a particular form of engagement is not being used:

  • At a minimum, facilities should be provided for dissemination of information, electronically or otherwise.
  • Translations of documents should be provided wherever feasible.
  • Explanations of how section 64 of the Act works, possible investments and the likely timelines should also be given.
  • Serious thought should be given to the establishment of creditor committees – and a framework for selection and representation ought to be explored.
  • If feasible, independent legal and financial advisors focused on the needs of unrepresented creditors should be appointed and their remuneration provided for.
  • At the very least, the applicant should appoint a financial advisor.

The above is not exhaustive, and the Court acknowledged that other mechanisms would be helpful. The objective is to provide timely communications, and to assist creditors in understanding what is happening, and to have some voice in the process.

The Court cautioned that an applicant cannot excuse itself by pointing at large numbers – the applicants had the benefit of a large customer base and cannot seek to hide behind numbers when things come to grief.

On its part, the Court will consider what can be done to facilitate access to hearings – in this case, by making available a recording of the proceedings available on YouTube, in addition to the Zoom webinar system.


As Singapore gains traction as the centre for debt restructuring in Asia, this guidance from the Singapore High Court is undoubtedly timely for the benefit of applicants, practitioners and, perhaps most importantly, creditors.

For further information on this topic please contact Christian Teo or Esther Yong at Helmsman LLC by telephone (+65 6816 6660) or email ([email protected] or [email protected]). The Helmsman LLC website can be accessed at www.helmsmanlaw.com.


(1) [2022] SGHC 196.