Earlier this year the Committee to Strengthen Singapore as an International Centre for Debt Restructuring (the "Committee") published, and the Singapore Ministry of Law accepted, recommendations aimed at enhancing Singapore's position as a `lead centre' for international debt restructuring. Is Singapore now well-positioned to become Asia Pacific's debt restructuring hub?
In 2010, the Insolvency Law Review Committee (the "ILRC") was formed to review Singapore's corporate insolvency and restructuring laws and to provide recommendations for the Omnibus Insolvency Bill, intended to implement a comprehensive framework for corporate insolvency and restructuring in Singapore. A few years after the ILRC published its report, the Committee was formed to promote Singapore as a lead centre for international debt restructuring. The Committee has made a number of recommendations to the Ministry of Law for reform of Singapore's laws, derived mainly from its consideration of the ILRC report and of the UK and US regimes, with particular attention given to Chapter 11 of the US Bankruptcy Code.
This alert provides a comparative analysis of those recommendations against Hong Kong's current corporate insolvency and restructuring regime, comprising the Companies Ordinance (Cap. 622) ("CO"), the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) ("CWMPO") and the reform proffered by the Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 ("Amendment Ordinance"), to help gauge how well Singapore will be positioned to become Asia Pacific's debt restructuring hub.
Comparison of Singapore and Hong Kong
Click here to view the table.
The above comparison shows that the changes proposed by the Committee are certainly more progressive and would bring the Singapore regime more in line with the US and UK regimes than those proposed by the Amendment Ordinance. They may well improve Singapore's competitiveness as a forum for cross border insolvency and restructuring, perhaps at the expense of Hong Kong. As referred to in our previous client alert June 2016, we believe the Amendment Ordinance to be a lost opportunity for bringing the Hong Kong regime similarly in line.
However, although Singapore's Ministry of Law has broadly accepted the Committee's recommendations, practically speaking it remains to been seen as to when these recommendations will be given legal effect, how they will then be applied, what their impact will then be and, accordingly, whether Singapore will indeed become Asia Pacific's restructuring hub as a result.