Singapore legislation

Clause 222

of Insolvency, Restructuring and Dissolution Bill

Clause 222

Interest on debts

(1)

In the judicial management or insolvent winding up of a company, where interest on a debt was not previously reserved or agreed, interest is allowed on the debt, at a rate not exceeding the prescribed rate of interest, in the following circumstances:

(a)

in any case where the debt is due by virtue of a written instrument and payable at a certain time, interest is allowed for the period between that time and the date of commencement of the judicial management or winding up, as the case may be;

(b)

in any other case, if a demand for payment was made in writing by or on behalf of the creditor before the commencement of the judicial management or winding up (as the case may be) and notice was given that interest would be payable from the date of the demand to the date of the payment, interest is allowed for the period between the date of the demand and the date of commencement of the judicial management or winding up, as the case may be.

(2)

For the purposes of distribution of dividend —

(a)

where a debt, which has been proved in the judicial management or winding up (as the case may be) includes interest, and the rate of such interest was previously agreed or reserved, the interest is calculated —

(i)

from the date the interest was payable to the date of commencement of the judicial management or winding up, as the case may be; and

(ii)

at the rate previously agreed or reserved; and

(b)

where a debt, which has been proved in the judicial management or winding up (as the case may be) includes interest, and the rate of such interest was not previously agreed or reserved, the interest is calculated —

(i)

from the date the interest was payable to the date of commencement of the judicial management or winding up, as the case may be; and

(ii)

at the prescribed rate of interest.

(3)

Interest on preferential debts ranks equally with interest on other debts.

(4)

In this section, “interest” includes any pecuniary consideration in lieu of interest and any penalty or late payment charge by whatever name called.

(5)

This section applies subject to any express provision of any creditor’s compromise or arrangement.

Read in full context — Insolvency, Restructuring and Dissolution Bill →