Insolvency, Restructuring and Dissolution Act 2018 · 2020 Revised Edition · Part 5 · Scheme of Arrangement
64. Power of Court to restrain proceedings, etc., against company
Feedback & supportLast amended by an amending law of 2021.
Where a company proposes, or intends to propose, a compromise or an arrangement between the company and its creditors or any class of those creditors, the Court may, on the application of the company, make one or more of the following orders, each of which is in force for such period as the Court thinks fit:
company
“company” has the meaning given by section 4(1) of the Companies Act 1967;
an order restraining the passing of a resolution for the winding up of the company;
an order restraining the appointment of a receiver or manager over any property or undertaking of the company;
an order restraining the commencement or continuation of any proceedings (other than proceedings under section 210 or 212 of the Companies Act 1967, or this section or section 66, 69 or 70) against the company, except with the permission of the Court and subject to such terms as the Court imposes;
an order restraining the issuance, continuation or execution of any enforcement order or other legal process, or the levying of any distress, against any property of the company, except with the permission of the Court and subject to such terms as the Court imposes;
an order restraining the taking of any step to enforce any security over any property of the company, or to repossess any goods held by the company under any chattels leasing agreement, hire‑purchase agreement or retention of title agreement, except with the permission of the Court and subject to such terms as the Court imposes;
an order restraining the enforcement of any right of re‑entry or forfeiture under any lease in respect of any premises occupied by the company (including any enforcement pursuant to section 18 or 18A of the Conveyancing and Law of Property Act 1886), except with the permission of the Court and subject to such terms as the Court imposes.
The company may make the application under subsection (1) only if all of the following conditions are satisfied:
no order has been made and no resolution has been passed for the winding up of the company;
the company makes, or undertakes to the Court to make as soon as practicable —
an application under section 210(1) of the Companies Act 1967 for the Court to order to be summoned a meeting of the creditors or class of creditors in relation to the compromise or arrangement mentioned in subsection (1); or
an application under section 71(1) to approve the compromise or arrangement mentioned in subsection (1);
the company does not make an application under section 210(10) of the Companies Act 1967.
When the company makes the application under subsection (1) to the Court —
the company must publish a notice of the application in the Gazette and in at least one English local daily newspaper, and send a copy of the notice published in the Gazette to the Registrar of Companies; and
unless the Court orders otherwise, the company must send a notice of the application to each creditor meant to be bound by the intended or proposed compromise or arrangement and who is known to the company.
The company must file the following with the Court together with the application under subsection (1):
evidence of support from the company’s creditors for the intended or proposed compromise or arrangement, together with an explanation of how such support would be important for the success of the intended or proposed compromise or arrangement;
in a case where the company has not proposed the compromise or arrangement to the creditors or class of creditors yet, a brief description of the intended compromise or arrangement, containing sufficient particulars to enable the Court to assess whether the intended compromise or arrangement is feasible and merits consideration by the company’s creditors when a statement mentioned in section 211(1)(a) of the Companies Act 1967 or section 71(3)(a) relating to the intended compromise or arrangement is placed before those creditors;
a list of every secured creditor of the company;
a list of all unsecured creditors who are not related to the company or, if there are more than 20 such unsecured creditors, a list of the 20 such unsecured creditors whose claims against the company are the largest among all such unsecured creditors.
An order of the Court under subsection (1) —
may be made subject to such terms as the Court imposes; and
may be expressed to apply to any act of any person in Singapore or within the jurisdiction of the Court, whether the act takes place in Singapore or elsewhere.
When making an order under subsection (1), the Court must order the company to submit to the Court, within such time as the Court may specify, sufficient information relating to the company’s financial affairs to enable the company’s creditors to assess the feasibility of the intended or proposed compromise or arrangement, including such of the following information as the Court may specify:
a report on the valuation of each of the company’s significant assets;
if the company acquires or disposes of any property or grants security over any property — information relating to the acquisition, disposal or grant of security, such information to be submitted not later than 14 days after the date of the acquisition, disposal or grant of security;
periodic financial reports of the company and the company’s subsidiaries;
forecasts of the profitability, and the cash flow from the operations, of the company and the company’s subsidiaries.
The Court may make an order extending the period for which an order under subsection (1) is in force, if an application for the extension of the period is made by the company before the expiry of that period.
Subject to subsection (9), during the automatic moratorium period for an application under subsection (1) by a company —
no order may be made, and no resolution may be passed, for the winding up of the company;
no receiver or manager may be appointed over any property or undertaking of the company;
no proceedings (other than proceedings under section 210 or 212 of the Companies Act 1967, or this section or section 66, 69 or 70) may be commenced or continued against the company, except with the permission of the Court and subject to such terms as the Court imposes;
no enforcement order or other legal process may be issued, continued or executed, and no distress may be levied, against any property of the company, except with the permission of the Court and subject to such terms as the Court imposes;
no step may be taken to enforce any security over any property of the company, or to repossess any goods under any chattels leasing agreement, hire‑purchase agreement or retention of title agreement, except with the permission of the Court and subject to such terms as the Court imposes; and
despite sections 18 and 18A of the Conveyancing and Law of Property Act 1886, no right of re‑entry or forfeiture under any lease in respect of any premises occupied by the company may be enforced, except with the permission of the Court and subject to such terms as the Court imposes.
Subsection (8) does not apply to a company that makes an application under subsection (1) if, within the period of 12 months immediately before the date on which that application is made, the company made an earlier application under subsection (1) to which subsection (8) applied.
The company, any creditor of the company, or any receiver and manager of the whole (or substantially the whole) of the property or undertaking of the company, may apply to the Court for —
creditor
“creditor”, in relation to a debtor proposing a voluntary arrangement under Part 14, means a creditor to whom the debtor owes a debt provable in bankruptcy;
an order discharging or varying any order made under subsection (1); or
an order that subsection (8), or any paragraph of that subsection that is specified in the order, does not apply to the company starting on the date of the order.
The Court must grant an application under subsection (10) by a creditor of a company, or by a receiver and manager of the whole (or substantially the whole) of the property or undertaking of a company, if the company failed to comply with subsection (4) when making the application under subsection (1) for the order under subsection (1), and the Court may impose such terms when granting the application under subsection (10) as the Court thinks fit.
property
“property” includes —(a)money, goods, things in action, land and every description of property, wherever situated; and(b)obligations and every description of interest, whether present or future or vested or contingent, arising out of or incidental to property;
Neither an order made by the Court under subsection (1) nor subsection (8) affects —
the exercise of any legal right under any arrangement (including a set‑off arrangement or a netting arrangement) that may be prescribed by regulations; or
the commencement or continuation of any proceedings that may be prescribed by regulations.
The company must, within 14 days after the date of an order made under subsection (1), (7) or (10), lodge a copy of the order with the Registrar of Companies.
Registrar of Companies
“Registrar of Companies” means the Registrar of Companies appointed under section 8 of the Companies Act 1967 and includes any Deputy or Assistant Registrar of Companies;
In this section —
“automatic moratorium period”, in relation to an application under subsection (1), means the period starting on the date on which the application is made, and ending on the earlier of the following:
a date that is 30 days after the date on which the application is made;
the date on which the application is decided by the Court;
“chattels leasing agreement”, “hire-purchase agreement” and “retention of title agreement” have the meanings given by section 88(1).
chattels leasing agreement
“chattels leasing agreement”, “hire-purchase agreement” and “retention of title agreement” have the meanings given by section 88(1);