SINGAPORE Law and Practice Contributed by: Doos Choi, Pierre Dzakpasu, Janelene Chen and Pieter de Ridder, Mayer Brown
6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights There are no restrictions of a generic nature on a foreign private credit lender’s ability to enforce its rights under a loan or security agreement. 6.5 Timing and Cost of Enforcement Security enforcement processes by a secured creditor typically entail the appointment of a receiver. The appointment process need not be very lengthy, and certain lenders may well have a history of appointing certain receivers, which often expedites the process. Assuming the enforcement is not contested, the most time-consuming aspect of enforcement, once commenced, is to ensure that the duty to obtain a proper price has been discharged. Typi - cally, this will be achieved by running a public auction process, which can take several months because the prevailing economic conditions, the business or asset concerned, and other factors all combined to determine market interest. The costs and expenses of a restructuring will usually include lender fees, receiver fees, legal fees and advisory fees. Depending on the situ - ation, there may be others (eg, broker fees for marketing a property). Such fees can be expect - ed to be negotiated on a case-by-case basis and may involve abort discounts and success uplifts. 6.6 Practical Considerations/Limitations on Enforcement Jurisdiction or country risk is a prime considera - tion for private credit lenders. Across South-East Asia, there are varying levels of certainty around due process and predictability of outcomes. This weighs heavily on the decision to enforce. In practice, this weights the scale in favour of consensual or negotiated exits (whether by sales
of assets, refinancings by new lenders, etc). Parties may eventually resort to court-based enforcement processes as a means of generat - ing leverage on obligors and sometimes as the primary route to an exit. There is no “one-size-fits-all” approach when it comes to enforcement. The particular enforce - ment steps should be established after a care - ful consideration of the situation, including the available legal options, which will vary across South-East Asian jurisdictions, and the relative commercial positions of the private credit lend - ers and the obligors. Ultimately, the goal of the private credit lender should be to develop a strategy that is more like - ly to lead to the debt being repaid by the obligors or restructured on more favourable terms, rather than the dogmatic pursuit of black-letter legal rights. 6.7 Claims Against Secured Lenders Post-Enforcement Generally speaking, under Singapore’s environ - mental laws and regulations, the owner or occu - pier of a property will have primary responsibility for complying with such laws and regulations. This means that, where a secured lender simply holds the benefit of the security, it is not likely to be in the firing line when it comes to envi - ronmental liability in Singapore. However, for the same reason, caution will need to be exercised where the secured lender is planning on taking possession or ownership of the property which will result in the lender effectively becoming the owner or occupier and exercising operational control of the property in question.
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