Speech by Mr K Shanmugam, Minister for Law & Home Affairs, at the launch of the INSOL Asia Hub

05 AUG 2019

5 Aug 2019 Posted in Speeches

Honorable Judges, Ladies and Gentlemen,

  1. Thank you for inviting me here for this launch.

  2. We take great pleasure in welcoming INSOL to Singapore.

  3. This launch is significant for INSOL, for Singapore, and for this entire region.

  4. INSOL plays a significant role in the restructuring and insolvency fields, with 43 Member Associations globally, and over 10,500 members across the restructuring and insolvency field.

  5. It is significant that this is INSOL’s first overseas office since it was established in London in 1982.

  6. This office joins over 160 international organizations in Singapore, including the World Bank Group, International Chamber of Commerce’s International Court of Arbitration, INTERPOL, World Intellectual Property Organisation (WIPO), and most recently, Asian Development Bank, and also the 4,200 regional headquarters of MNCs based in Singapore, which is the largest concentration of regional headquarters in the Asia-Pacific region.

  7. Asia – it has been said again and again, we expect to see tremendous growth in the coming decades – in technology growth and business growth. That will inevitably, of course, see a rise in the need for restructuring. A study by Oliver Wyman done in 2017 studied key Asia Pacific markets and predicted that USD250 billion of debt was available for restructuring.

  8. INSOL is setting up in Singapore at a time of tremendous change, and that is an understatement.

  9. So let me share with you what’s happening in Singapore, what our goal is, and how are we going to partner with INSOL.

  10. Our goal is simple, to be the leading Asian center for debt restructuring - a very simple, clear goal. Those who know the Singapore Government should know that when we say it, we intend to achieve it. We want to be one of the leading centers in the world alongside London and New York on corporate debt restructuring and insolvency. This Government has driven various phases of legislative reform, with very strong support from stakeholders. Very substantial changes were made to the Companies Act in 2017. It took in elements from the world’s best regimes, including Chapter 11, it strengthened the cross-border regime, through the adoption of the Model Law. It is recognised by international commentators, the international journals, as one of the most forward-looking, balanced, and flexible debt restructuring regimes in the world. Very considerable efforts were made to strike the right balance between the interests of all the stakeholders, including creditors.

  11. Next we have the Insolvency, Restructuring and Dissolution Act (IRDA), passed in October last year, which builds on earlier amendments. This Act consolidates both the corporate and personal insolvency laws into a single piece of legislation. It sets up a regulatory regime for insolvency practitioners and enhances that corporate rescue framework. There will also be 50 separate pieces of subsidiary legislation which will involve new processes and IT upgrades to implement the changes.

  12. In addition to legislative reforms, my Ministry has also been active with a number of related initiatives. The Insolvency and Public Trustee’s Office (IPTO) hosted the second INSOL International Legislative and Regulatory Colloquium in April this year, just a few months ago. A number of delegates from 18 jurisdictions, together with participants joining via video conference, took part. Our Ministry officials also continue to participate actively at UNCITRAL’s Working Group V (Insolvency Law) sessions.

  13. So far, we have received quite a number of applications to court under the 2017 Companies Act reforms. And beyond the numbers, the changes to the laws have made a real difference. Listed companies now benefit from the enhanced moratorium that has provided breathing space to find better solutions. In one case, a prepackaged arrangement scheme was utilised to restructure $80 million debt within two months.

  14. We are also very happy that decisions of Singapore courts are now accepted around the world. In March this year, the High Court of England and Wales recognised a new moratorium granted by the Singapore High Court as foreign main proceedings under UK’s enactment of the Model Law. It is a landmark decision that addresses the question of whether UK courts would recognise Singapore’s new moratorium order. Second, our Courts have delivered important judgements. Justice Aedit Abdullah’s decision in Zetta Jet on recognition under the Model Law was named the most important cross border recognition decision at the Global Restructuring Review Awards this year, and Justice Kannan Ramesh’s views on the Gibbs principle were cited by the US bankruptcy courts. Justice Kannan was also recently appointed Vice-President of the Board of the International Insolvency Institute.

  15. Our Supreme Court is also a founder member of the Judicial Insolvency Network (“JIN”), a network in leading bankruptcy courts. JIN held its inaugural conference in Singapore in October of 2016. It issued guidelines for court to court communications and cooperation on cross-border insolvency matters. The JIN guidelines have received international recognition and acceptance, and were adopted by 12 very important courts, the latest being a court in the Netherlands in May 2019. The guidelines formed the basis of the cross border protocol in the Canadian case of Aralez Pharmaceuticals. The JIN guidelines have also now been supplemented.

  16. In this context, with trade flows there are some issues in terms of international commerce and trade between the world’s two leading economies, but the secular trend in this region is still upwards, and one can be optimistic about that. The presence of INSOL will add to the vibrancy and development of the sector in Singapore, as well as in the Asia Pacific region.

  17. We hope Singapore would provide, and INSOL will find Singapore an ideal place to increase its membership and engagement with stakeholders in the region, raising standards for the industry through enhanced training and education, and increasing the adoption of Model Law. These are all objectives that Singapore shares, and supports, and we would be happy to partner with INSOL in doing this, to help everyone have a better system. The more practitioners who are trained in this system and the more they work on it, the better it is for everyone. I am confident in particular on the collaboration of practitioners.

  18. INSOL’s launch today is one of a series of significant events in related legal fields happening in the city. The Inaugural IBA Asia Pacific Arbitration Conference will be held tomorrow. The signing of the Singapore Convention on Mediation will be on 7 August. It’s an UNCITRAL treaty that was passed in December. Within the short period of seven months, more than 35 countries have confirmed signing, including the US, China, India, South Korea and a number of other countries. The EU has a specific issue in terms of whether to support. It has to decide whether this convention has to be signed by the EU as a whole or if individual countries should sign. So, it just has to be resolved but in the negotiation process, the EU was very supportive and I am sure they will find a way. And we have the Grand Opening of Maxwell Chamber Suites on the 8th of August, where INSOL will be housed.

  19. There are other events taking place this week, which together demonstrate what Singapore has to offer as an International Legal Services Hub. It signals our resolve to be a leading destination for legal services globally.

  20. I warmly welcome all of you to join us and wish INSOL the very best.

  21. Thank you.

Last updated on 22 Aug 2019