KING & WOOD MALLESONS

Facts

Re King & Wood Mallesons and other matters dealt with Originating Application Nos 90, 91 and 92 of 2025 in the General Division of the High Court, among the first Singapore applications for recognition of insolvency proceedings under Chinese law. The applicant, the law firm King & Wood Mallesons, was the reorganisation administrator of three related companies in the Delong Group, a stainless steel enterprise in Jiangsu province: Jiangsu Delong Nickel Industry Co Ltd, Xiangshui Hengsheng Stainless Steel Casting Co Ltd and Yan Cheng City Hong Chuang Trading Co Ltd.

On 1 August 2024 the People's Court of Xiangshui County placed the first two companies in reorganisation on creditors' applications and appointed the applicant as administrator, with Mr Zhang Jingping as its person-in-charge. On 30 October 2024, over objections from eight creditors and shareholders, the same court consolidated the reorganisation of 28 group companies, finding their legal personalities highly confused and the cost of separating their property too high.

According to the applicant, it had uncovered Singapore transactions needing investigation: the steel casting company's transfer of its shareholding in Alchemist Metal Industry Pte Ltd for $1 shortly before its reorganisation (later regained), the enforcement by a lessor of a mortgage over Singapore shares on or around 30 July 2024 although rentals were being paid, and an assignment of receivables owed by an Indonesian company where it was unclear whether consideration was given. It sought recognition of the Chinese proceedings and orders, a moratorium, powers to examine witnesses and obtain information, and to administer the companies' Singapore property.

Issues

1. Whether the Chinese reorganisation proceedings, including the consolidation, were a foreign proceeding under the Model Law
2. Whether a law firm could be a foreign representative under Art 2(i)
3. Whether the companies' centre of main interests was in China
4. Whether the information and administration reliefs under Art 21(1)(d) and (e) should be granted

Holding

The court allowed all three applications in their entirety. It recognised the Chinese reorganisation proceedings as a foreign main proceeding, so the automatic moratorium applied, recognised the applicant as foreign representative, and granted orders to examine witnesses and obtain information and to administer the companies' Singapore property, with no property to leave Singapore without leave of court.

Reasoning

Applying Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd [2023] 2 SLR 421, the court found that the applicant's submission merely restated Chinese law, but the proceedings were collective on their own workings: all creditors vote on the plan, a voting threshold must be met in every class, the consolidation expressly weighed fair repayment, and all assets and liabilities form a unified estate. Following its reasoning in Re Compuage Infocom Ltd [2025] SGHC 49, the People's Court was a judicial authority competent to supervise the reorganisation, both directly by approving the plan and indirectly by supervising and fining the administrator. The governing law related to insolvency and the aim was reorganisation.

Following Genesis Asia Pacific, a corporate body could be a foreign representative. The court repeated its concern that accountability is best placed on individuals, and noted that Mr Zhang was the natural person in charge. The Art 15 documentary requirements, including translations, were met.

Each registered office was in China, and the main business, assets, creditors and governing law were there too, with nothing to rebut the presumption, so the proceedings were a foreign main proceeding.

For information orders the court applied the three requirements in Fullerton Capital (HC). The material concerned the companies' Singapore assets, the applicant had a reasonable basis to think the Singapore companies' directors and officers could help, and the specified transactions, their timing and the large values involved justified the orders. The administration relief was granted because no property would be sent abroad without leave, which, as in Compuage, protects local creditors. Public policy was not offended.

From the judgment