HIN LEONG TRADING (PTE.) LTD. (IN COMPULSORY LIQUIDATION) & 2 Ors

[2024] SGHC 256 High Court (General Division) 15 October 2024 • HC/OA 555/2024 ( HC/SUM 1957/2024 ) |HC/OA 726/2024 • 29 min read

8 cases cited (4 SG, 4 foreign) Cited by 1 case

Catchwords

Companies — Schemes of arrangement — Whether creditors can be classified as potentially secured creditors

Practice Areas

Companies

Judges (1)

Andre Maniam Delivered

Counsel (30)

Allen & Gledhill LLP Firm Helmsman LLC Firm JWS Asia Law Corporation Firm Providence Law Asia LLC Firm Shook Lin & Bok LLP Firm TSMP Law Corporation Firm Wong & Leow LLC Firm WongPartnership LLP Firm Abigail Fernandez Counsel Non-Party Alston Yeong Counsel Applicant Choo Xiao Li Counsel Non-Party Daniel Liang Counsel Non-Party Darrell Lee Counsel Non-Party Emmanuel Chua Counsel Non-Party Felicia Ang Counsel Non-Party Grace Sim Counsel Non-Party Huang Xinli Daniel Counsel Applicant Iris Ng Counsel Non-Party Jamal Siddique Counsel Non-Party Jeremy Chu Counsel Non-Party Juliana Lake Counsel Non-Party Lau Hui Ming Kenny Counsel Applicant Ponniya Nandakumar Counsel Non-Party Rahul Mohan Counsel Non-Party Richard Xu Counsel Non-Party Soon Wen Qi Andrea Counsel Non-Party Tan Jia Xin Counsel Non-Party Tan Kai Yun Counsel Non-Party Vergis S Abraham Counsel Applicant Wong Tjen Wee Counsel Non-Party

Parties (14)

ABN Amro Bank N.V. Non-Party Cooperative Rabobank U.A., Singapore Branch Non-Party Credit Agricole Corporate and Investment Bank, Singapore Branch Non-Party DBS Bank Ltd Non-Party Hin Leong Trading (Pte) Ltd (in compulsory liquidation) Applicant ING Bank N.V., Singapore Branch Non-Party Oversea-Chinese Banking Corporation Limited Non-Party Skomer Investments Designated Activity Company Non-Party Societe Generale, Singapore Branch Non-Party The Hongkong and Shanghai Banking Corporation Non-Party Trafigura Pte Ltd Non-Party UT Singapore Services Pte Ltd Non-Party Chan Kheng Tek Applicant Goh Thien Phong Applicant

Case Significance

In Re Hin Leong Trading (Pte) Ltd (in compulsory liquidation) and another matter [2024] SGHC 256, the General Division of the High Court considered whether a scheme of arrangement may include creditors who are only potentially secured, without their security claims being fully and finally determined. The proceedings comprised Originating Application No 555 of 2024 (Summons No 1957 of 2024) and Originating Application No 726 of 2024, brought by applicants Goh Thien Phong, Chan Kheng Tek and Hin Leong Trading (Pte) Ltd (in compulsory liquidation).

A non-party creditor, UT Singapore Services Pte Ltd ("UTSS"), contended that a scheme proposed on such terms was not permissible and could not be sanctioned, and that leave should not have been granted to convene a scheme meeting. Andre Maniam J had granted leave to convene the scheme meeting (the "Convening Order") and thereafter sanctioned the scheme (the "Sanction Order"), and UTSS filed appeals in CA/CA 55/2024. The matter was heard on 30 August 2024 with the grounds of decision issued on 15 October 2024. Numerous financial institutions appeared as non-parties, including DBS Bank Ltd, The Hongkong and Shanghai Banking Corporation, ING Bank N.V. Singapore Branch, Oversea-Chinese Banking Corporation Limited and ABN Amro Bank N.V., with Providence Law Asia LLC acting for the applicants.

Summary

In this General Division of the High Court matter concerning the compulsory liquidation of Hin Leong Trading (Pte) Ltd, the liquidators sought leave to convene a scheme meeting and sanction of a proposed scheme of arrangement, while a non-party, UT Singapore Services Pte Ltd, contended that a scheme could not include creditors who were only potentially secured without their security claims being fully and finally determined. The central issue was whether such potentially secured creditors could be included in the scheme. The court granted leave to convene the scheme meeting and subsequently sanctioned the scheme, dismissed the remaining prayers in UTSS's setting-aside application, and ordered UTSS to pay the liquidators' costs of $20,000 and $15,000 for the respective applications.

What was the central question in Re Hin Leong Trading (Pte) Ltd [2024] SGHC 256?

The central question was whether a scheme of arrangement could include creditors who are only potentially secured, without their security claims being fully and finally determined. Andre Maniam J considered this after non-party UT Singapore Services Pte Ltd challenged the scheme's permissibility in the General Division of the High Court.

What orders had Andre Maniam J made in the Hin Leong Trading scheme of arrangement?

Andre Maniam J had granted leave to convene a scheme meeting (the Convening Order) and thereafter sanctioned the scheme (the Sanction Order). UT Singapore Services Pte Ltd, a non-party creditor, filed appeals in CA/CA 55/2024 challenging those orders, leading to the grounds of decision dated 15 October 2024.