Aaquaverse Pte. Ltd.

"Primarily, the applicants failed to make out the requirement in Re Pacific Andes Resources Development Ltd and other matters [2016] SGHC 210 (“Pacific Andes”) that there was a reasonable prospect of the Scheme working: Pacific Andes at [65]." — Per Aedit Abdullah J, Para 7

Case Information

• Citation: [2023] SGHC 29 (Para 0)
• Court: In the General Division of the High Court of the Republic of Singapore (Para 0)
• Date of hearing: 10 November 2022 and 19 January 2023; decision date: 10 February 2023 (Para 0)
• Coram: Aedit Abdullah J (Para 0)
• Case numbers: Originating Application No 646 of 2022; Originating Application No 647 of 2022; Originating Application No 648 of 2022; Originating Application No 656 of 2022 (Para 0)
• Counsel for the applicants: Han Guangyuan Keith, Tan Mei Yen and Ammani Mathivanan of Oon & Bazul LLP (Para 0)
• Counsel for Candy Ventures Sarl (non-party): Samuel Richard Sharpe of Sharpe & Jagger LLC (Para 0)
• Area of law: Companies — Schemes of Arrangement — Moratoria — Reasonable Prospect of the Scheme Working (Para 0)
• Judgment length: Brief remarks delivered by the judge in relation to the moratoria extension applications (Para 1)

Summary

This decision concerned applications by companies in the Aaqua Group for extensions of moratoria under ss 64 and 65 of the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) in support of a proposed scheme of arrangement. The court’s focus was narrow but decisive: whether the applicants had shown that there was a reasonable prospect of the Scheme working. The judge concluded that they had not, and the applications were dismissed. (Para 1, Para 16)

The Scheme was built around a proposed pooling of the group’s assets and liabilities in Aaquaverse Pte Ltd, together with an expected substantial award from an English Damages Inquiry. The court had already granted only a short extension and had required further affidavits on the group’s assets, foreign proceedings, likely damages, financing, and scheme details. When the matter returned, the judge remained unconvinced that the evidence established a realistic prospect of the Scheme succeeding. (Para 3, Para 4, Para 5)

The central difficulty was evidential and conceptual. The applicants relied heavily on the possibility of a damages award, but the report they tendered was not supported by a legal opinion assessing the likelihood and range of any English award. The other assets were also found wanting: the Aaqua App valuation appeared optimistic, the app had not been brought to market, and the Audioboom shares were insufficient to change the overall picture. The court therefore found the forecast of a better return than liquidation unsupported and noted concerns about bona fides. (Para 9, Para 11, Para 12, Para 13, Para 14)

What Was the Court Asked to Decide About the Moratoria Extensions?

The court was asked to decide whether the applicants had shown, for the purposes of extending moratoria under ss 64 and 65 of the IRDA, that there was a reasonable prospect of the proposed Scheme working. That was the governing question identified at the outset of the remarks, and it framed the entire analysis that followed. (Para 1)

"These remarks focus primarily on the question of whether the applicants showed, for the purposes of an extension of moratoria under ss 64 and 65 of the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) (“IRDA”), that there was a reasonable prospect of the proposed scheme of arrangement (the “Scheme”) working." — Per Aedit Abdullah J, Para 1

The judge’s approach shows that the moratoria application was not treated as a mere procedural formality. The court was not simply checking whether a scheme existed in outline; it was testing whether the scheme had a realistic chance of functioning in practice. That distinction mattered because the applicants were seeking the court’s continued protection while they attempted to restructure, and the court was unwilling to extend that protection unless the scheme had a credible foundation. (Para 1, Para 8)

At the earlier hearing, the court had already expressed concerns and had therefore granted only a relatively short extension until 20 January 2023. The judge also directed the applicants to file further affidavits to substantiate specific aspects of their case, including assets, foreign proceedings, likely damages, financing, and scheme details. That procedural history is important because it shows the court was not rejecting the application out of hand; rather, it was giving the applicants an opportunity to fill evidential gaps before deciding whether the moratoria should continue. (Para 4)

Who Were the Applicants and What Was the Aaqua Group’s Restructuring Proposal?

The applicants were companies within the Aaqua Group: Aaquaverse Pte Ltd, the group holding company incorporated in Singapore; Aaqua BV, a Netherlands subsidiary; Aaqua Pte Ltd, a Singapore subsidiary; and Aaqua Inc, a United States subsidiary. The judgment identifies the group structure because the proposed restructuring was group-wide, not confined to a single entity. (Para 2)

"The applications were made by companies in the Aaqua Group: Aaquaverse Pte Ltd (the group holding company incorporated in Singapore), Aaqua BV (a Netherlands subsidiary), Aaqua Pte Ltd (a Singapore subsidiary), and Aaqua Inc (a United States subsidiary)." — Per Aedit Abdullah J, Para 2

The Scheme itself had two principal features. First, it proposed that all assets and liabilities of the Aaqua Group be pooled in Aaquaverse Pte Ltd so that the debts of the entire group could be restructured more easily. Second, it contemplated that the applicants would receive a substantial sum from the English courts after an ongoing Damages Inquiry. Those two features were linked: the pooling mechanism was intended to create a single restructuring platform, while the expected damages recovery was meant to provide the financial basis for creditor repayment. (Para 3)

"First, the Scheme proposed that all assets and liabilities of the Aaqua Group be pooled in Aaquaverse Pte Ltd to allow for easier restructuring of the debts of the entire Group." — Per Aedit Abdullah J, Para 3

"Next, the Scheme contemplated that the applicants would be awarded a substantial sum by the English courts following an ongoing inquiry into damages (the “Damages Inquiry”)." — Per Aedit Abdullah J, Para 3

That structure explains why the court’s scrutiny focused so heavily on the quality of the evidence supporting the anticipated inflow of funds. If the scheme depended on a future damages award, then the court needed to be satisfied that the award was not merely hoped for, but realistically attainable in a form and amount sufficient to support the restructuring. The judgment makes clear that the court was not prepared to accept aspiration as a substitute for proof. (Para 3, Para 10)

Why Did the Court Initially Grant Only a Short Extension and Require Further Evidence?

The court had concerns at the first hearing and therefore granted only a relatively short extension of the moratoria until 20 January 2023. At the same time, the judge directed the applicants to file further affidavits to substantiate parts of their case. This indicates that the court saw the application as incomplete and wanted more material before deciding whether the statutory threshold had been met. (Para 4)

"As I had concerns about aspects of the application, I granted only a relatively short extension of the moratoria until 20 January 2023 and directed that the applicants file further affidavits to substantiate parts of their case" — Per Aedit Abdullah J, Para 4

The matters requiring further substantiation were not peripheral. They went to the heart of whether the Scheme could work: the applicants had to explain their assets, the status and relevance of foreign proceedings, the likely damages recovery, the financing position, and the details of the scheme itself. In other words, the court was asking for the factual and financial architecture of the restructuring to be demonstrated with greater precision. (Para 4)

That procedural step also foreshadowed the eventual outcome. A short extension can be understood as a judicial holding pattern: the court was willing to preserve the status quo temporarily, but only while the applicants attempted to cure the deficiencies identified by the court. When the matter returned, the judge concluded that the additional material still did not establish a reasonable prospect of the Scheme working. (Para 4, Para 5, Para 16)

What Did the Applicants Argue at the 19 January 2023 Hearing?

At the 19 January 2023 hearing, the applicants sought a further extension of the moratoria. Their position was that, at that stage, they had made out sufficiently the reasonable prospect of the Scheme working. The judgment does not set out a lengthy narrative of their submissions, but it does record the essence of their argument: they said the evidential threshold had been met well enough to justify continued protection. (Para 5)

"At the 19 January 2023 hearing, which is the subject of these brief remarks, the applicants sought a further extension of the moratoria. They argued that they had made out sufficiently for that stage the reasonable prospect of the Scheme working." — Per Aedit Abdullah J, Para 5

The applicants were represented by counsel from Oon & Bazul LLP, and Candy Ventures Sarl was represented as a non-party by separate counsel. The excerpt does not provide a detailed account of Candy Ventures’ submissions, so any attempt to reconstruct them would be speculative and is therefore avoided. What can be said, however, is that the court had before it an adversarial setting in which the applicants had to persuade the judge that the Scheme’s prospects were sufficiently real to justify another extension. (Para 0, Para 5)

The judge’s later reasoning shows that the applicants’ argument failed because the court was not satisfied by the quality of the evidence supporting the Scheme. The issue was not whether the applicants sincerely believed in the restructuring, but whether the material before the court established a realistic prospect of success. On that question, the court answered in the negative. (Para 5, Para 8, Para 13)

What Was the Governing Legal Test for Extending the Moratoria?

The governing test was whether there was a reasonable prospect of the Scheme working. The judge relied on earlier authorities, including Re Pacific Andes Resources Development Ltd and other matters and Re Conchubar Aromatics Ltd and other matters, to explain that the court must be satisfied not only that creditors support the scheme, but also that the scheme has a real prospect of functioning. (Para 7, Para 8)

"While the test was expressed in Pacific Andes and Re Conchubar Aromatics Ltd and other matters [2015] SGHC 322 as requiring a reasonable prospect of the scheme working and being acceptable to the general run of the creditors, such support by the creditors was not sufficient on its own." — Per Aedit Abdullah J, Para 8

The judge’s formulation is important because it separates two ideas that might otherwise be conflated. One is creditor acceptability, which concerns whether the general body of creditors is likely to support the scheme. The other is workability, which concerns whether the scheme can actually be implemented and deliver the promised outcome. The court made clear that creditor support, even if present, does not by itself satisfy the statutory and doctrinal requirement. (Para 8)

"The former limb of the test was equally important: the court should only let through a scheme that had a reasonable prospect of working." — Per Aedit Abdullah J, Para 8

That statement captures the ratio of the decision. The court was not prepared to treat the moratoria as a gateway that could be opened merely because a restructuring proposal had some support. The proposal had to be credible in operational and financial terms. In this case, the judge concluded that the applicants had not crossed that threshold. (Para 8, Para 16)

Why Did the Court Find the Expected Damages Award Too Speculative?

A central plank of the Scheme was the expectation that the applicants would receive a substantial award from the English courts after the Damages Inquiry. The court accepted that the applicants had tendered a report on that issue, but the report was not supported by a legal opinion evaluating the likelihood of the English court making such an award and assessing the possible range. That omission was fatal to the reliability of the applicants’ financial projections. (Para 3, Para 9)

"While the applicants tendered a report on that issue, it was not supported by a legal opinion evaluating the likelihood of the English court making such an award and assessing the possible range." — Per Aedit Abdullah J, Para 9

The judge then made a broader point of principle. Where a moratorium or scheme depends on an inflow of funds from a judicial or arbitral award, the applicant must expect heavy scrutiny and must provide robust and rigorous analysis. That is because the court cannot responsibly extend restructuring protection on the basis of an uncertain future award unless the applicant demonstrates, with proper analysis, why the award is likely and what range of recovery is realistically available. (Para 10)

"All this meant that any applicant for a moratorium or scheme relying on an inflow of funds from a judicial or arbitral award should be prepared to face heavy questioning and should be prepared to give robust and rigorous analysis to support their position." — Per Aedit Abdullah J, Para 10

In practical terms, the court was saying that a damages-based restructuring model is not inherently impermissible, but it is evidentially demanding. The applicants needed more than a report describing the Damages Inquiry; they needed a legal assessment of the probability of success and the likely quantum range. Without that, the court could not treat the expected award as a dependable foundation for the Scheme. (Para 9, Para 10)

Why Did the Court Reject the Aaqua App Valuation and the Audioboom Shares as a Sufficient Basis for the Scheme?

The court also examined the other assets said to support the Scheme and found them doubtful. The IP valuation of the Aaqua App seemed rather optimistic, and the app had not been brought to market. The judge observed that forecasts and dreams of the developers could not be the basis of a scheme proposal. That language shows a clear judicial insistence on commercial realism rather than aspirational valuation. (Para 11)

"The other aspects of the Scheme were also very doubtful: the IP valuation of the Aaqua App seemed rather optimistic. The Aaqua App had not been brought to market; the forecasts and dreams of the developers could not be the basis of a scheme proposal." — Per Aedit Abdullah J, Para 11

The court then turned to the Audioboom shares. Even assuming they could be sold off at a good return in the market, the judge found that they were not sufficient to make a substantial enough difference. This is significant because it shows the court assessing the assets not in isolation, but in relation to whether they could materially alter the restructuring’s viability. The answer was no. (Para 12)

"That left the shares in Audioboom, which were not sufficient to make a substantial enough difference to my mind even assuming they could be sold off at a good return in the market." — Per Aedit Abdullah J, Para 12

These findings together reveal the court’s overall evidential concern. The Scheme was not supported by a stable, demonstrable asset base. Instead, it depended on a combination of speculative valuation, untested market assumptions, and an uncertain litigation recovery. The court was not prepared to treat that combination as a reasonable prospect of working. (Para 11, Para 12, Para 13)

How Did the Court Assess the Forecast of a Better Return Than Liquidation?

The applicants appear to have advanced the proposition that the Scheme would produce a better return than liquidation. The judge rejected that forecast as unsupported. This is a critical part of the reasoning because a restructuring proposal often seeks to justify itself by showing that creditors will fare better than in liquidation. Here, however, the court found that the forecast lacked adequate evidential foundation. (Para 13)

"I therefore found that the forecast of a probable better return than liquidation was really unsupported." — Per Aedit Abdullah J, Para 13

The significance of that finding is twofold. First, it undermined the economic case for the Scheme. Second, it reinforced the earlier conclusion that the applicants had not shown a reasonable prospect of the Scheme working. If the projected upside relative to liquidation was not supported, then the restructuring’s practical justification became much weaker. (Para 13, Para 8)

The judge also linked the evidential shortcomings to a broader concern about bona fides. That does not mean the court made a finding of dishonesty; rather, it noted that the weaknesses in the application pointed to a lack of bona fides in the application. In context, that observation reflects the court’s unease with the quality and candour of the restructuring case presented. (Para 14)

"The shortcomings above also pointed to a lack of bona fides in the application." — Per Aedit Abdullah J, Para 14

What Was the Final Outcome of the Moratoria Applications?

The final outcome was straightforward: the applications for extension of moratoria under ss 64 and 65 of the IRDA were dismissed. The court did not grant the further protection sought by the applicants. (Para 16)

"The applications for extension of moratoria under ss 64 and 65 of the IRDA were dismissed." — Per Aedit Abdullah J, Para 16

That outcome followed directly from the court’s assessment of the evidence. The applicants had not shown a reasonable prospect of the Scheme working, and the court was not satisfied that the proposed restructuring had a sufficiently credible financial basis. The dismissal therefore reflects a merits-based refusal, not a mere procedural default. (Para 7, Para 8, Para 9, Para 11, Para 12, Para 13, Para 16)

For practitioners, the lesson is that a moratorium extension in support of a scheme is not granted simply because a company is in distress and has a restructuring idea. The court will test whether the idea is grounded in evidence, whether the expected funding sources are real, and whether the projected return to creditors is properly substantiated. If those elements are missing, the moratoria may be refused. (Para 8, Para 10, Para 13, Para 16)

Why Does This Case Matter for Schemes of Arrangement and Moratoria Practice?

This case matters because it reinforces the discipline that a scheme of arrangement must have a reasonable prospect of working before the court will continue moratorium protection. The decision makes clear that creditor support, while relevant, is not enough on its own. The court must be satisfied that the scheme is commercially and evidentially viable. (Para 8)

"the court should only let through a scheme that had a reasonable prospect of working." — Per Aedit Abdullah J, Para 8

The case is also important because it warns against overreliance on contingent litigation recoveries. Where a restructuring plan depends on a damages award or arbitral recovery, the applicant must provide rigorous analysis of both liability and quantum prospects. A bare report is not enough if it is not supported by legal opinion and a realistic assessment of the possible range of outcomes. (Para 9, Para 10)

"any applicant for a moratorium or scheme relying on an inflow of funds from a judicial or arbitral award should be prepared to face heavy questioning and should be prepared to give robust and rigorous analysis to support their position." — Per Aedit Abdullah J, Para 10

Finally, the decision illustrates the court’s willingness to scrutinize asset valuations that appear aspirational rather than market-tested. The judge’s comments about the Aaqua App and the Audioboom shares show that projected value must be grounded in reality. For restructuring lawyers, the practical implication is clear: if the scheme depends on future value, the evidence must be concrete, conservative, and well-supported. (Para 11, Para 12, Para 13)

Cases Referred To

Legislation Referenced

• Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed), ss 64 and 65 (Para 1, Para 16)

Source Documents

• Original Judgment — Singapore Courts
• Archived Copy (PDF) — Litt Law CDN

This article analyses [2023] SGHC 29 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.