Description of debts provable in judicial management or winding up
Open ↗218.—(1) Subject to this section, the following are provable where a company other than an insolvent company is being wound up:(a)
any debt or liability to which the company —(i)
is subject at the commencement of the winding up; or
(ii)
may become subject after the commencement of the winding up;
(b)
any interest payable by the company on any debt or liability mentioned in paragraph (a).
(2) Subject to this section and section 203, the following are provable where a company is in judicial management or an insolvent company is being wound up:(a)
any debt or liability to which the company —(i)
is subject at the commencement of the judicial management or winding up, as the case may be; or
(ii)
may become subject after the commencement of the judicial management or winding up (as the case may be) by reason of any obligation incurred before the commencement of the judicial management or winding up, as the case may be;
(b)
any interest, on any debt or liability mentioned in paragraph (a), that is payable by the company in respect of any period before the commencement of the judicial management or winding up, as the case may be.
(3) Demands in the nature of unliquidated damages arising otherwise than by reason of a contract, promise, breach of trust, tort or bailment, or an obligation to make restitution, are not provable in the judicial management or insolvent winding up of a company.
(4) An estimate is to be made by the judicial manager or liquidator of the value of any debt or liability provable under this section that, by reason of its being subject to any contingency or contingencies, or for any other reason, does not bear a certain value.
(5) Any person aggrieved by any such estimate by the judicial manager or liquidator may appeal to the Court.
(6) If in the opinion of the Court the value of the debt or liability cannot be fairly estimated, the Court may make an order to that effect, and upon the making of that order the debt or liability is, for the purposes of this Act, deemed to be a debt not provable in the judicial management or winding up of the company.
(7) If in the opinion of the Court the value of the debt or liability can be fairly estimated, the Court may assess the value of the debt or liability and may give all necessary directions for the purpose of valuing the debt or liability, and the amount of the value when assessed is deemed to be a debt provable in the judicial management or winding up of the company.
(8) An amount payable under any order made by a court under any written law relating to the confiscation of the proceeds of crime is provable in the judicial management or winding up of a company.
Mutual credit and set-off
Open ↗219.—(1) This section applies to —(a)
a company in judicial management; and
(b)
an insolvent company that is being wound up.
(2) Where there have been any mutual credits, mutual debts or other mutual dealings between a company and any creditor, the debts and liabilities to which each party is or may become subject as a result of such mutual credits, debts or dealings must be set off against each other and only the balance is a debt provable in the judicial management or the winding up of the company, as the case may be.
(3) There is to be excluded from any set‑off under subsection (2) any debt or liability of the company which —(a)
is not a debt provable in judicial management or winding up; or
(b)
arises by reason of an obligation incurred at a time when the creditor had notice that an interim judicial manager had been appointed under section 94(3), or that the application for a judicial management order or the application for winding up (as the case may be) relating to the company was pending.
(4) A sum is to be regarded as being due to or from the company for the purposes of subsection (2) regardless of whether —(a)
the sum is payable at present or in the future;
(b)
the obligation by virtue of which the sum is payable is certain or contingent; or
(c)
the sum is fixed or liquidated, or is capable of being ascertained by fixed rules or as a matter of opinion.
Regulations as to proof of debts
Open ↗220. The prescribed regulations must be observed with respect to the mode of proving debts, the right of proof by secured and other creditors, the admission and rejection of proofs and any other matters relating to proof of debts.
Contracts to which company is party
Open ↗221.—(1) This section applies where a contract has been made with a company that is subsequently placed under judicial management or subsequently goes into insolvent liquidation.
(2) The Court may, on the application of any other party to the contract, make an order discharging obligations under the contract on such terms as to payment by the applicant or the company of damages for non‑performance or otherwise as appears to the Court to be equitable.
(3) Any damages payable by the company by virtue of an order of the Court under this section is a debt provable in the judicial management or winding up of the company, as the case may be.
(4) Where a company that is in judicial management or that is being wound up is a contractor in respect of any contract jointly with any person, that person may sue or be sued in respect of the contract without the joinder of the company.
Interest on debts
Open ↗222.—(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.
Realisation of security
Open ↗223.—(1) In the insolvent winding up of a company, no secured creditor is entitled to any interest in respect of the secured creditor’s debt after the commencement of the winding up, if the secured creditor does not realise the secured creditor’s security within 12 months after the commencement of the winding up or such further period as the liquidator may determine.
(2) Where a company is in judicial management and a secured creditor has obtained the permission of the Court or consent of the judicial manager to enforce any security over the company’s property under section 96(4)(e), that secured creditor is not entitled to any interest in respect of the secured creditor’s debt from the date that such permission or consent is obtained, if the secured creditor does not realise the secured creditor’s security within 12 months after the date on which the permission or consent to enforce the security was given or such further period as the judicial manager may determine.[Act 25 of 2021 wef 01/04/2022]
Source: Singapore Statutes Online (Attorney-General's Chambers), © Government of Singapore.
