Singapore Court of Appeal clarifies COMI presumption in cross-border insolvencies
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Introduction
In a notable development for cross-border insolvency, the Singapore Court of Appeal has handed down a landmark decision which clarifies the framework for the rebuttable presumption of a debtor's Centre of Main Interests (COMI) under the UNCITRAL Model Law on Cross Border Insolvency enacted in Singapore (Singapore's Model Law).
In Re Fullerton Capital Ltd (in liquidation) [2025] SGCA 11, the Court of Appeal upheld the High Court's decision, recognising the British Virgin Islands (BVI) liquidation of Fullerton Capital Ltd (Fullerton) as a foreign main proceeding under Singapore's Model Law.
COMI
COMI is crucial in determining the extent to which courts in one jurisdiction will recognise and assist insolvency proceedings initiated in another jurisdiction. Under most frameworks of cross-border insolvency, including the UNCITRAL Model Law, a foreign insolvency proceeding for which recognition is sought, must be located in the main jurisdiction of the debtor's COMI. This holistic approach is designed to provide greater certainty in cross-border insolvency cases and to promote modified universalism.
Case Background
Amid ongoing liquidation proceedings in the BVI, Fullerton's liquidators and foreign representatives, Jason Kardachi and Colin Wilson of Kroll (Liquidators), sought recognition of the BVI liquidation as the foreign main proceeding under Singapore's Model Law and ancillary relief in the form of disclosure and examination orders against (amongst others) the appellant, a former director and shareholder of Fullerton, Mr Raymond Lau Yean Liang (Mr Lau).
The Liquidators recognition application was challenged by Mr Lau, who argued that Fullerton's COMI was not in the BVI, where it was duly incorporated, but rather in Hong Kong, China or Singapore. As such, the BVI liquidation could not be recognised as the foreign main proceeding.
On 18 June 2024, the Singapore High Court ruled in favour of the Liquidators, granting a disclosure and examination order against Mr Lau and agreeing that Fullerton's COMI was in the BVI. The presumption of the BVI as Fullerton's COMI, was 'not displaced' by Mr Lau's claims that it was in China, Hong Kong or Singapore.
None of the below factors relied on by Mr Lau rebutted this presumption, namely:
- Location of Fullerton’s control and direction: Even if Fullerton’s controllers were domiciled in China, this was irrelevant as it was not objectively ascertainable to third parties dealing with Fullerton.
- Location of Fullerton’s creditors: Although Discovery Key Investments Ltd (DKI) was Fullerton’s sole creditor, there was insufficient evidence to conclude that DKI was based in Hong Kong; and
- Location of Fullerton’s operations: There was insufficient evidence of Fullerton’s operations as most of the indicators relied on by Mr Lau were disputed and, in any event, did not clearly point to any particular location.
The High Court's decision was appealed by Mr Lau on the grounds that the Judge in the High Court had erred in the interpretation of Singapore’s Model Law and that Fullerton's COMI should be China. Mr Lau's claim was subsequently rejected by the Singapore Court of Appeal on the 13 March 2025, ruling that none of his submissions 'had a firm evidential substratum or came close to establishing anything resembling a meaningful connection with China'.
In its judgment, the Court of Appeal addressed several key legal questions in the developing area of cross-border insolvency.
Presumption and Burden of Proof
The Court held that the presumption under Article 16(3) of Singapore's Model Law, that a debtor's COMI is at the location of its registered office, is the mandatory starting point for an assessment of COMI. Here, the Singapore Court of Appeal drew on the English Court of Appeal's judgment in In re Melars Group Ltd [2023] Bus LR 260 whereby Lord Justice Snowden outlined 'the process of determination of a corporate debtor’s COMI does not start from a blank sheet of paper', as 'in every case the court must start its inquiry from the premise that the COMI of a corporate debtor is in the same place as the debtor’s registered office'.
The burden of establishing 'proof to the contrary' that a debtor's COMI is elsewhere, rests solely on the party opposing the presumption under Article 16(3) of Singapore's Model Law. Here, the Court categorically rejected Mr Lau's submissions that Singapore's Model Law should follow the US approach, whereby if challenged by an opposing party, the foreign representative must adduce evidence to prove the COMI is in the same location as the registered office.
The Court of Appeal held that the burden of establishing proof to the contrary, cannot be discharged by proving a lack of connection between the debtor and its location of its registered office. Instead, the challenger must identify a competing jurisdiction as the debtor’s COMI and demonstrate a stronger connection to that jurisdiction. This could only be achieved by 'sufficient contrary evidence of objective factors' which indicate a stronger connection elsewhere. This is a useful reminder of the basic principles applicable when determining COMI, namely the importance of an objective criteria ascertainable by third parties.
The standard of proof for rebutting the presumption under Article 16(3) of Singapore's Model Law is to establish, on the balance of probabilities, that a location other than the registered office is the debtor’s COMI. This is significant as it marks the first time the highest court in Singapore has addressed the question of which standard of proof is required to displace the rebuttable presumption.
Timing
The Court of Appeal also rejected the notion that a COMI should focus solely on the debtor's position while it was 'alive and flourishing'. This affirmed the Singapore judgment in British Steamship Protection and Indemnity Association Ltd and another v Thresh, Charles and another [2024] 2 SLR (British Steamship), which held that the debtor's COMI should be assessed as at the date of the recognition application. This choice of a specific point in time creates greater certainty for practitioners, compared to the 'amorphous moving target' of 'alive and flourishing'. The Court of Appeal also accepted that COMI shifts can occur after a company commences insolvency proceedings, confirming that the 'manipulation of a debtor's COMI with a view to benefiting its creditors is legitimate and unobjectionable' as a form of good forum shopping.
Role of Foreign Representatives
The Court of Appeal also confirmed that there is no absolute bar in considering the actions of the foreign representatives prior to the filing of a recognition application. This affirmed the decision in British Steamship and rejected the more restrictive approach in Re Zetta Jet Pte Ltd and others (Asia Aviation Holdings Pte Ltd, intervener) [2019] 4 SLR 1343. This seems sensible as it does not make sense to exclude foreign representatives from the COMI analysis, especially when they may have been involved in complex insolvency proceedings for an extended period from the onset of the insolvency proceedings to the date of the recognition application.
Implications for Practitioners
This decision is instructive for cross-border insolvency practitioners. It provides certainty on the presumption that a debtor's COMI will be in the location of its registered office, unless a challenger mounts a compelling, evidence-based case to the contrary. This is critical in a globalised economy where companies operate across multiple jurisdictions, and creditors need predictable outcomes when assessing their risks and recovery prospects.
Another intriguing practical implication of the ruling is the acceptance that a company's COMI can shift after the commencement of insolvency proceedings, with the relevant assessment date being the filing of the recognition application. Finally, the Court of Appeal confirmed that even if recognition applications are carried out on an ex parte basis, there is still an obligation on foreign representatives to disclose all material facts to the court, even if they are prejudicial to their application. This duty imposes significant responsibility on insolvency practitioners and confirms that recognition proceedings are not a rubber-stamp exercise but a substantive process requiring candour.
The judgment reinforces Singapore's position as a hub for cross-border restructuring and insolvency matters as practitioners have greater assurances that the national courts will safeguard fairness and apply a consistent approach to determining COMI when considering recognition applications under Singapore's Model Law.
This article was previously published by the author on the website of DLA Piper
