To stay or not to stay? A clash of arbitration and insolvency regimes

In the wake of the global Coronavirus disease 2019 (COVID-19) pandemic, a rise in creditorinitiated winding-up proceedings is likely to be impending in coming years (See e.g., RCMA Asia Pte. Ltd. v. Sun Electric Power Pte. Ltd. [2020] SGHC 205). At the same time, geopolitical developments, such as t...

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Main Authors: CHAN, Darius, SIDHARRTH B RAJAGOPAL
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Language:English
Published: Institutional Knowledge at Singapore Management University 2021
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Online Access:https://ink.library.smu.edu.sg/sol_research/3447
https://ink.library.smu.edu.sg/context/sol_research/article/5405/viewcontent/JOIA_38_0402.pdf
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spelling sg-smu-ink.sol_research-54052022-01-10T03:18:09Z To stay or not to stay? A clash of arbitration and insolvency regimes CHAN, Darius SIDHARRTH B RAJAGOPAL, In the wake of the global Coronavirus disease 2019 (COVID-19) pandemic, a rise in creditorinitiated winding-up proceedings is likely to be impending in coming years (See e.g., RCMA Asia Pte. Ltd. v. Sun Electric Power Pte. Ltd. [2020] SGHC 205). At the same time, geopolitical developments, such as the scale and ambition of Belt & Road Initiative projects, have raised questions over the issue of debt sustainability. Given the prevalence of arbitration clauses in modern international commercial and project agreements, the interplay and relationship between insolvency and dispute resolution, and especially arbitration, requires careful attention. While the intersections between the arbitration and insolvency regimes are numerous and multi-faceted, (Jennifer Permesly et al. ‘IBA Toolkit on Insolvency and Arbitration’ International Bar Association (March 2021), www.ibanet.org/LPD/Dispute_Resolution_Section/ Arbitration/toolkit-arbitration-insolvency.aspx (accessed 18 April 2021) the impact of an arbitration clause on winding-up petitions has attracted recent case law. The English, Hong Kong, and Singapore courts have each taken differing approaches to the question of how to deal with winding-up petitions presented over disputed debts that are subject to an arbitration clause. On one end of the spectrum, the Hong Kong courts currently appear to prefer a relatively more creditor-friendly approach. On the other hand, the Singapore Court of Appeal recently laid down a relatively more debtor-friendly approach. Undertaking a comparative analysis of the approaches taken by different common law jurisdiction, this article argues that the Singapore Court of Appeal’s approach is preferable. However, at least for courts in United Nations Commission on International Trade Law (UNCITRAL) Model Law jurisdictions (or jurisdictions where the mandatory stay regime of the Model Law is adopted), they ought to find that a disputed debt subject to an arbitration clause falls within the scope of the mandatory stay regime under the Model Law. This article further suggests a possible way in which the approach of the Singapore Court of Appeal can be reconciled with the mandatory stay regime under Singapore’s enactment of the Model Law. 2021-08-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/sol_research/3447 https://ink.library.smu.edu.sg/context/sol_research/article/5405/viewcontent/JOIA_38_0402.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection Yong Pung How School Of Law eng Institutional Knowledge at Singapore Management University Insolvency dispute resolution arbitration debt China Hong Kong Singapore Asian Studies Bankruptcy Law Dispute Resolution and Arbitration
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Insolvency
dispute resolution
arbitration
debt
China
Hong Kong
Singapore
Asian Studies
Bankruptcy Law
Dispute Resolution and Arbitration
spellingShingle Insolvency
dispute resolution
arbitration
debt
China
Hong Kong
Singapore
Asian Studies
Bankruptcy Law
Dispute Resolution and Arbitration
CHAN, Darius
SIDHARRTH B RAJAGOPAL,
To stay or not to stay? A clash of arbitration and insolvency regimes
description In the wake of the global Coronavirus disease 2019 (COVID-19) pandemic, a rise in creditorinitiated winding-up proceedings is likely to be impending in coming years (See e.g., RCMA Asia Pte. Ltd. v. Sun Electric Power Pte. Ltd. [2020] SGHC 205). At the same time, geopolitical developments, such as the scale and ambition of Belt & Road Initiative projects, have raised questions over the issue of debt sustainability. Given the prevalence of arbitration clauses in modern international commercial and project agreements, the interplay and relationship between insolvency and dispute resolution, and especially arbitration, requires careful attention. While the intersections between the arbitration and insolvency regimes are numerous and multi-faceted, (Jennifer Permesly et al. ‘IBA Toolkit on Insolvency and Arbitration’ International Bar Association (March 2021), www.ibanet.org/LPD/Dispute_Resolution_Section/ Arbitration/toolkit-arbitration-insolvency.aspx (accessed 18 April 2021) the impact of an arbitration clause on winding-up petitions has attracted recent case law. The English, Hong Kong, and Singapore courts have each taken differing approaches to the question of how to deal with winding-up petitions presented over disputed debts that are subject to an arbitration clause. On one end of the spectrum, the Hong Kong courts currently appear to prefer a relatively more creditor-friendly approach. On the other hand, the Singapore Court of Appeal recently laid down a relatively more debtor-friendly approach. Undertaking a comparative analysis of the approaches taken by different common law jurisdiction, this article argues that the Singapore Court of Appeal’s approach is preferable. However, at least for courts in United Nations Commission on International Trade Law (UNCITRAL) Model Law jurisdictions (or jurisdictions where the mandatory stay regime of the Model Law is adopted), they ought to find that a disputed debt subject to an arbitration clause falls within the scope of the mandatory stay regime under the Model Law. This article further suggests a possible way in which the approach of the Singapore Court of Appeal can be reconciled with the mandatory stay regime under Singapore’s enactment of the Model Law.
format text
author CHAN, Darius
SIDHARRTH B RAJAGOPAL,
author_facet CHAN, Darius
SIDHARRTH B RAJAGOPAL,
author_sort CHAN, Darius
title To stay or not to stay? A clash of arbitration and insolvency regimes
title_short To stay or not to stay? A clash of arbitration and insolvency regimes
title_full To stay or not to stay? A clash of arbitration and insolvency regimes
title_fullStr To stay or not to stay? A clash of arbitration and insolvency regimes
title_full_unstemmed To stay or not to stay? A clash of arbitration and insolvency regimes
title_sort to stay or not to stay? a clash of arbitration and insolvency regimes
publisher Institutional Knowledge at Singapore Management University
publishDate 2021
url https://ink.library.smu.edu.sg/sol_research/3447
https://ink.library.smu.edu.sg/context/sol_research/article/5405/viewcontent/JOIA_38_0402.pdf
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