Majestica Enterprises v Kams Singapore: Creditor Funding in Winding Up under IRDA

In Majestica Enterprises Limited and The Challenger Trade Finance Segregated Portfolio of the South Africa Alpha SPC v Kams Singapore Pte Ltd (in compulsory liquidation), the General Division of the High Court of Singapore granted the applicants' application for an order under s 204(3) of the Insolvency, Restructuring and Dissolution Act 2018, giving them an advantage over other creditors in the distribution of assets recovered as a result of their funding of the liquidation of Kams Singapore Pte Ltd. The court considered factors such as the reasonableness of the advantage, the opportunity for other creditors to provide funding, the absence of objections, and the liquidator's control over the proceedings.

1. Case Overview

1.1 Court

General Division of the High Court

1.2 Outcome

Application granted.

1.3 Case Type

Insolvency

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore court grants Majestica Enterprises an advantage over other creditors for funding the liquidation of Kams Singapore under s 204(3) of the IRDA.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Majestica Enterprises LimitedApplicantCorporationApplication grantedWon
The Challenger Trade Finance Segregated Portfolio of the South Africa Alpha SPCApplicantCorporationApplication grantedWon
Kams Singapore Pte Ltd (in compulsory liquidation)RespondentCorporationApplication grantedLost

3. Judges

Judge NameTitleDelivered Judgment
Chua Lee MingJudgeYes

4. Counsels

Counsel NameOrganization
Baldev Singh BhinderBlackstone & Gold LLC
Vaybhav Kumar SharmaBlackstone & Gold LLC
Jamal Siddique PeerShook Lin & Bok LLP
Suresh ViswanathShook Lin & Bok LLP
Muhammad Imran Bin Abdul RahimEldan Law LLP
Kuek ZihuiEldan Law LLP

4. Facts

  1. The respondent, Kams Singapore Pte Ltd, is in compulsory liquidation.
  2. The applicants, Majestica Enterprises Limited and The Challenger Trade Finance Segregated Portfolio of the South Africa Alpha SPC, are creditors of the company.
  3. The applicants provided funding to the liquidator to investigate the company's affairs and pursue recovery of assets.
  4. Other creditors were given the opportunity to provide funding but declined.
  5. The liquidator retained full control of any legal proceedings brought by the company.
  6. The funding agreement stipulated how recovered assets would be distributed, prioritizing the applicants.

5. Formal Citations

  1. Majestica Enterprises Ltd and another v Kams Singapore Pte Ltd (in compulsory liquidation), Originating Application No 592 of 2023, [2023] SGHC 250

6. Timeline

DateEvent
Company wound up and liquidator appointed.
Hearing date.
Judgment date.

7. Legal Issues

  1. Funding by creditors in winding up
    • Outcome: The court granted the application, giving the funding creditors an advantage over other creditors.
    • Category: Substantive
    • Related Cases:
      • [2022] SGHC 312

8. Remedies Sought

  1. An order pursuant to s 204(3) of the Insolvency, Restructuring and Dissolution Act 2018 to be given an advantage over other creditors.

9. Cause of Actions

  • No cause of actions

10. Practice Areas

  • Insolvency
  • Liquidation

11. Industries

  • No industries specified

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Song Jianbo v Sunmax Global Capital Fund 1 Pte Ltd (in compulsory liquidationHigh CourtYes[2022] SGHC 312SingaporeCited for the factors to be considered in granting a prospective order under s 204(3) of the IRDA.
Lavrentiadis, Lavrentios v Dextra Partners Pte Ltd (in liquidation) and another matterHigh CourtYes[2023] SGHC 131SingaporeCited regarding the liquidator's control over intended proceedings and public policy concerns about the administration of justice.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Insolvency, Restructuring and Dissolution Act 2018Singapore
s 204 of the Insolvency, Restructuring and Dissolution Act 2018Singapore
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Compulsory liquidation
  • Funding agreement
  • Recovered assets
  • Creditors
  • Liquidator
  • Insolvency, Restructuring and Dissolution Act 2018
  • Advantage over other creditors

15.2 Keywords

  • Insolvency
  • Winding up
  • Creditor funding
  • IRDA
  • Liquidation

17. Areas of Law

Area NameRelevance Score
Insolvency Law95
Winding Up95
Company Law40
Civil Procedure20

16. Subjects

  • Insolvency
  • Corporate Law
  • Funding by Creditors