SINGAPORE Trends and Developments Contributed by: KOH Swee Yen, SC, Wendy LIN, TIONG Teck Wee and Monica CHONG Wan Yee, WongPartnership LLP
The Appellate Division of the High Court confirmed that the principles in Toh concerning the consequenc- es of a defence being struck out continued to apply under the Rules of Court 2021, and that the Court would therefore need to consider whether the SOC warranted the judgment being entered. Ultimately, the Appellate Division concluded that the SOC was suf- ficient to support the reliefs sought by the claimant and confirmed the terms of the judgment entered in the claimant’s favour. Costs consequences of interference with recognition orders – Terraform Labs Pte Ltd [2025] SGHC(I) 18 This decision concerned an application by non-par- ties to belatedly join pending litigation in the Beltran Action discussed above (“Joinder Application”). Terra- form applied to strike out the Joinder Application and sought to enforce the moratorium issued by the Sin- gapore court intended to stop claimants such as the non-parties from pursuing any claims against it that are inconsistent with the terms of its plans of reorgani- sation under Chapter 11, which had been confirmed by the US Bankruptcy Court for the District of Dela- ware and recognised in Singapore under the UNCI- TRAL Model Law on Cross-Border Insolvency read with the Third Schedule of the Insolvency, Restructur- ing and Dissolution Act 2018.
The moratorium explicitly stated that “[n]o actions or proceedings concerning [Terraform’s] property, rights, obligations or liabilities (save for the proceed- ings in [the Beltran Action]) in respect of all claims that have been compromised under the Plan shall be commenced or continued against [Terraform]”. The Singapore court order containing the moratorium also stated that any person affected by the order has lib- erty to apply for orders and directions. Despite hav- ing knowledge of the moratorium, the non-parties sought to be joined as additional parties to the Beltran Action without first obtaining permission to proceed or applying for clarification as to whether the moratorium applied to them. The SICC struck out the Joinder Application and ordered the non-parties to pay Terraform’s full costs of SGD74,200, highlighting that interference with rec- ognition orders will expose parties to costs awards “especially […] where the adverse impact on the for- eign debtor and its assets is directly related to a wilful violation of a court order meant to afford protections to the foreign debtor and to facilitate implementation of its restructuring plan”. Notably, Terraform had given notice to the non-parties that their Joinder Applica- tion constituted a violation of the moratorium and offered the non-parties the opportunity to withdraw the Joinder Application voluntarily. The SICC held that in rejecting that offer, the non-parties “assumed the risk of paying the price for their own audacity”.
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