Case Details
- Citation: [2024] SGCA 43
- Title: British Steamship Protection and Indemnity Association Ltd and another v Thresh, Charles and another
- Court: Court of Appeal of the Republic of Singapore
- Court Appeal No: Civil Appeal No 2 of 2024
- Date of Decision: 24 October 2024
- Judges: Sundaresh Menon CJ, Belinda Ang JCA, Kannan Ramesh JAD
- Decision Type: Grounds of decision (appeal against recognition of foreign insolvency proceedings)
- Plaintiff/Applicant: British Steamship Protection and Indemnity Association Ltd and another
- Defendant/Respondent: Thresh, Charles and another
- Respondents’ Capacity: Joint provisional liquidators appointed in Bermuda
- Legal Areas: Insolvency Law — Cross-border insolvency; Recognition of foreign insolvency proceedings; Centre of main interests (COMI)
- Key Statutory Instruments: UNCITRAL Model Law on Cross-Border Insolvency as adopted in Singapore (the “SG Model Law”)
- Legislation Referenced: Bermuda Insurance Act 1978; Bermuda Companies Act 1981; Companies Act (Singapore) (as part of the adoption framework); Insurance regulatory regime in Bermuda
- Primary Procedural Context: Recognition application in Singapore for Bermuda liquidation proceedings
- Lower Court Decision: Re Thresh, Charles and another (British Steamship Protection and Indemnity Association Ltd and another, non-parties) [2023] SGHC 337
- Related Court of Appeal Authority: Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd [2023] 2 SLR 421
- Judgment Length: 40 pages, 11,663 words
Summary
In British Steamship Protection and Indemnity Association Ltd and another v Thresh, Charles and another ([2024] SGCA 43), the Singapore Court of Appeal upheld the recognition of Bermuda liquidation proceedings as a “foreign main proceeding” under the UNCITRAL Model Law on Cross-Border Insolvency as adopted in Singapore (the “SG Model Law”). The case arose from an application by joint provisional liquidators (“JPLs”) in Bermuda to recognise the winding-up of a Bermuda-incorporated insurer.
The central dispute on appeal concerned the company’s centre of main interests (“COMI”). The appellants argued that the company’s insurance underwriting activities outside Bermuda—conducted after it had failed to comply with Bermuda’s licence conditions—should be treated as illegitimate and therefore excluded from the COMI analysis. The Court of Appeal rejected this argument, holding that the relevant COMI inquiry should not disregard the company’s regulated insurance activities in Bermuda merely because the company later breached licence conditions.
The Court of Appeal also affirmed that the Bermuda proceeding satisfied the SG Model Law’s requirements for a “foreign proceeding” and that recognition was not barred by Singapore’s public policy exception. The appeal was dismissed, and consequential relief recognising the Bermuda liquidation as a foreign main proceeding remained in place.
What Were the Facts of This Case?
The company at the centre of the dispute, British Steamship Protection and Indemnity Association (Bermuda) Limited (the “Company”), was incorporated in Bermuda on 18 June 2010. It obtained a licence from the Bermuda Monetary Authority (“BMA”) to carry on insurance business “in and from within Bermuda” under the Bermuda Insurance Act 1978 (the “Bermuda IA”). The licence was conditional and required centralisation of underwriting in Bermuda, together with regulatory oversight measures enabling the BMA to supervise the Company and its insurance activities.
As a Class 2 Insurer, the Company’s licence imposed further restrictions. It was limited to underwriting insurance business for its shareholders, and those policies had to be 100% ceded to reinsurers unless prior written approval from the BMA was obtained. The licensing structure also required policyholders to purchase shares in the Company’s parent for the term of their policies. Initially, the Company complied with these licence terms.
Over time, however, the Company failed to comply with key regulatory obligations. The BMA brought winding-up proceedings on 12 September 2022 under the Bermuda Companies Act 1981 and the Bermuda IA. The grounds relied upon were principally breaches of Bermuda’s statutory and regulatory requirements, including: failure to appoint an approved auditor since 2019; failure to file statutory financial returns from 2019 to 2021; failure to maintain adequate accounting and record-keeping systems and meet reporting requirements under Bermuda’s Insurance Code of Conduct 2015; failure to appoint and maintain a principal representative as required by Bermuda IA; and failure to maintain a registered office as required by the Bermuda Companies Act.
Importantly, the Company was not wound up on the basis that it was insolvent. Instead, the winding-up was regulatory in nature, triggered by non-compliance with licensing and statutory obligations. The Bermuda court made a winding-up order and appointed joint provisional liquidators (“JPLs”). The JPLs later sought recognition in Singapore, applying for recognition of the Bermuda proceeding and winding-up order as a foreign main proceeding under Article 17(2)(a) of the SG Model Law.
In support of the application, the JPLs explained that they were unable to proceed with an orderly run-off of existing policies and dissolution of the Company because of alleged non-cooperation by Mr Li Yu, who was a Singapore resident and had been an executive director of the Company prior to winding-up. The appellants opposed recognition, contending that the Bermuda proceeding should not qualify under the SG Model Law and that COMI was not in Bermuda.
What Were the Key Legal Issues?
The Court of Appeal identified and addressed several legal questions under the SG Model Law framework. First, it had to determine whether the Bermuda winding-up proceeding was a “foreign proceeding” within the meaning of Article 2(h) of the SG Model Law. This required analysis of whether the proceeding was conducted under a law relating to insolvency or adjustment of debt and whether it was collective in nature.
Second, the Court had to decide whether recognition should be granted as a foreign main proceeding under Article 17(2)(a). This turned on the company’s COMI, assessed by reference to general principles developed in Singapore case law, including the role of objectively ascertainable and permanent factors.
Third, the Court considered whether recognition would be contrary to Singapore’s public policy under Article 6 of the SG Model Law. The appellants argued that there had been a lack of due process and that the JPLs had allegedly advanced dishonest arguments and incurred exorbitant costs. Although the Court’s discussion of these points was not the main focus, it remained a distinct legal hurdle to recognition.
How Did the Court Analyse the Issues?
Foreign proceeding under Article 2(h). The Court of Appeal endorsed the approach taken by the Judge below, applying the five requirements for a “foreign proceeding” articulated in Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd [2023] 2 SLR 421. The Court agreed that the Bermuda winding-up proceeding was brought under a law relating to insolvency or adjustment of debt, even though the Company was not wound up on insolvency grounds in the conventional sense.
The Court reasoned that the Bermuda IA contained provisions enabling winding-up petitions on grounds that included insolvency-related triggers. In particular, the Court accepted that the statutory scheme under which the BMA brought the proceeding fell within the SG Model Law’s intended scope. It was sufficient that the proceeding was conducted under a law relating to insolvency or adjustment of debt, rather than requiring that the factual basis in the particular case be insolvency in the strictest sense.
Collective nature. The Court also agreed that the proceeding was collective. It emphasised that the JPLs had powers analogous to liquidators and that the winding-up involved distribution of the Company’s assets among creditors on a pari passu basis, followed by treatment of contributories. This structure aligned with the collective character contemplated by the SG Model Law.
COMI analysis and the “regulated company” issue. The most significant aspect of the appeal concerned whether the Company’s activities outside Bermuda—undertaken after it had failed to comply with licence conditions—should be excluded from the COMI analysis as “illegitimate”. The appellants argued that the Company’s insurance underwriting outside Bermuda was not a legitimate reflection of its commercial centre and should not influence where its COMI lay.
The Court of Appeal rejected that framing. It held that the COMI inquiry should focus on the company’s centre of main interests as revealed by objectively ascertainable and permanent factors. While the Company may have breached licence terms later, the Court did not accept that such breaches automatically rendered the relevant activities irrelevant to COMI. The Court treated the regulatory licensing and oversight framework as a key objective anchor for COMI.
In particular, the Court found it material that the Company’s insurance business was licensed by Bermuda and regulated by the BMA. This regulatory connection indicated where the company’s commercial activity was centred in a way that was objectively ascertainable. The Court also noted that the appellants had not advanced evidence that the Company’s COMI was in another jurisdiction based on permanent and objective factors. In the absence of such evidence, the Bermuda regulatory framework remained the most persuasive indicator.
Failure to fulfil statutory obligations. The Court further addressed the appellants’ attempt to characterise the Company’s non-compliance as undermining the COMI analysis. It accepted that the Company’s breaches were relevant to the fact that the BMA initiated winding-up proceedings. However, it did not follow that breaches should lead to a recharacterisation of COMI away from the jurisdiction that had licensed and regulated the company. The Court’s approach reflects a pragmatic view: COMI should not be manipulated by later non-compliant conduct, especially where the company’s regulatory footprint remains stable and objectively verifiable.
Role of the foreign representative. The Court also considered the relevance of the activities of the foreign representative in the COMI analysis. While the foreign representative’s conduct may be relevant in some contexts, the Court’s decision indicates that COMI is primarily a property of the debtor company’s interests and operations, not a function of the representative’s later actions. The Court therefore did not treat the JPLs’ activities as determinative of COMI, although it remained relevant to the overall recognition framework.
Public policy exception. The Court of Appeal agreed with the Judge that the public policy exception in Article 6 did not apply. It rejected arguments that recognition should be refused due to alleged lack of due process or unfair hearing. It also did not accept the appellants’ allegations that the JPLs had acted dishonestly or incurred exorbitant costs as a basis to deny recognition. The Court’s treatment underscores that Article 6 is a narrow exception and is not a general mechanism to relitigate factual disputes from the foreign proceedings.
What Was the Outcome?
The Court of Appeal dismissed the appeal and affirmed the Judge’s decision recognising the Bermuda liquidation proceedings and winding-up order as a foreign main proceeding under Article 17(2)(a) of the SG Model Law. Recognition therefore remained in place, together with the consequential relief ordered by the court below.
Practically, the decision reinforces that Singapore courts will give effect to foreign insolvency-related proceedings where the statutory criteria are satisfied, and that COMI will be determined by objectively ascertainable factors—particularly the jurisdictional regulatory framework—rather than by later allegations that certain activities were illegitimate due to licence breaches.
Why Does This Case Matter?
This decision is significant for cross-border insolvency practice in Singapore because it clarifies how COMI should be assessed for regulated entities whose operations may not perfectly align with their licensing terms. The Court of Appeal’s refusal to exclude non-compliant activities from the COMI analysis signals that COMI is not a purely factual “where the company actually operated at the time” inquiry. Instead, it is anchored in objective, permanent indicators, including the regulatory and licensing environment.
For practitioners, the case provides guidance on evidential strategy. The Court placed weight on the absence of objectively ascertainable evidence demonstrating a different COMI. Parties opposing recognition should therefore be prepared to adduce concrete, permanent factors showing that the company’s main interests are centred elsewhere, rather than relying on allegations of illegitimacy tied to breaches of regulatory conditions.
The decision also reinforces the narrowness of the public policy exception. Arguments framed as due process concerns or allegations of misconduct by foreign representatives are unlikely to succeed unless they meet a high threshold. This promotes predictability and comity in recognition applications, aligning with the SG Model Law’s objective of facilitating cross-border insolvency cooperation.
Legislation Referenced
- UNCITRAL Model Law on Cross-Border Insolvency as adopted in Singapore (the “SG Model Law”), including Articles 2(h), 2(i), 6, and 17(2)(a)
- Bermuda Insurance Act 1978 (“Bermuda IA”), including provisions relating to licensing, regulatory oversight, and winding-up triggers
- Bermuda Companies Act 1981 (“Bermuda CA”), including provisions relating to registered office and winding-up
- Companies Act (Singapore) (referenced as part of the legislative framework for cross-border insolvency recognition)
Cases Cited
- Re Thresh, Charles and another (British Steamship Protection and Indemnity Association Ltd and another, non-parties) [2023] SGHC 337
- Ascentra Holdings, Inc (in official liquidation) and others v SPGK Pte Ltd [2023] 2 SLR 421
- British Steamship Protection and Indemnity Association Ltd and another v Thresh, Charles and another [2024] SGCA 43 (this case)
Source Documents
This article analyses [2024] SGCA 43 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.