Insolvency, Restructuring and Dissolution Act 2018 — PART 25: SAVING AND TRANSITIONAL PROVISIONS

Sushant Shukla

Part of a comprehensive analysis of the Insolvency, Restructuring and Dissolution Act 2018

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Part 25 Saving and Transitional Provisions: Key Provisions and Their Purpose

Part 25 of the Insolvency, Restructuring and Dissolution Act 2018 (the Act) contains crucial saving and transitional provisions designed to ensure a smooth legal transition from the repealed Bankruptcy Act (Cap. 20, 2009 Revised Edition) and the Companies Act 1967 to the new legislative framework. These provisions safeguard ongoing proceedings, rights, and obligations, preventing legal uncertainty or disruption during the changeover. This analysis explores the key provisions, their purposes, and the legal rationale underpinning them.

Continuation of the Repealed Bankruptcy Act for Specific Matters

"Parts 3 and 13 to 22 do not apply to or in relation to the following, and despite section 450, the Bankruptcy Act (Cap. 20, 2009 Revised Edition) (called in this section the repealed Act) as in force immediately before 30 July 2020 continues to apply to or in relation to the following, as if Parts 3 and 13 to 22 and section 450 had not been enacted" — Section 525(1), Insolvency, Restructuring and Dissolution Act 2018

Verify Section 525 in source document →

This provision explicitly preserves the application of the repealed Bankruptcy Act to certain matters despite the enactment of the new Act. The purpose is to avoid any legal vacuum or confusion by ensuring that ongoing bankruptcy cases or specific categories of bankruptcy-related proceedings initiated before the commencement date continue to be governed by the old law. This is essential because Parts 3 and 13 to 22 of the new Act contain substantive provisions on bankruptcy and insolvency that would otherwise supersede the repealed Act.

By stating that these parts "do not apply to or in relation to the following," the legislature ensures continuity and legal certainty for cases already underway or for specific transitional categories. This avoids the unfairness or administrative difficulties that would arise if proceedings had to be restarted or re-litigated under a new regime mid-course.

Deeming and Continuation of Accounts and Funds

"Continuation and deeming provisions for various accounts and funds from the repealed Act to this Act" — Sections 525(3)-(6), Insolvency, Restructuring and Dissolution Act 2018

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Sections 525(3) to (6) provide for the continuation and deeming of various accounts and funds established under the repealed Bankruptcy Act. These include, for example, trustee accounts and funds related to bankrupt estates. The purpose is to ensure that financial and fiduciary arrangements established under the old law remain valid and enforceable under the new Act.

This continuity is critical because insolvency and bankruptcy proceedings often involve complex financial transactions and trust accounts. Without these deeming provisions, there could be disputes about the validity of funds held or administered during the transition, potentially harming creditors and other stakeholders.

Application of Repealed Act Provisions to Trustees and Undischarged Bankrupts

"Specific application of certain sections of the repealed Act to trustees, undischarged bankrupts, and Official Assignee with modifications" — Section 525(7), Insolvency, Restructuring and Dissolution Act 2018

Verify Section 525 in source document →

Section 525(7) preserves the application of specific provisions of the repealed Bankruptcy Act to trustees, undischarged bankrupts, and the Official Assignee, albeit with necessary modifications to align with the new Act. This ensures that the rights, duties, and liabilities of these parties remain consistent and enforceable during the transitional period.

The rationale is to protect the interests of creditors and maintain the integrity of bankruptcy administration by avoiding gaps or inconsistencies in the law governing these key actors. It also facilitates the orderly completion of bankruptcy estates commenced before the new Act's commencement.

Saving Provisions Relating to the Companies Act 1967

"Similar saving and transitional provisions relating to amendments to the Companies Act 1967, preserving application of the Companies Act 1967 as in force before 30 July 2020 for certain applications and orders" — Section 526(1), Insolvency, Restructuring and Dissolution Act 2018

Verify Section 526 in source document →

Section 526(1) provides that certain provisions of the Companies Act 1967 continue to apply as if the amendments made by the new Act had not been enacted, specifically for certain applications and orders. This ensures that proceedings or matters initiated under the old Companies Act are not disrupted by the legislative changes.

Given that the new Act introduces significant reforms affecting company insolvency and restructuring, this saving provision is necessary to prevent procedural unfairness or confusion for parties engaged in ongoing company-related insolvency matters.

Continuation of Approved Liquidators and Official Receiver References

"Continuation of approved liquidators and references to Official Receiver under the old Companies Act" — Section 526(2), Insolvency, Restructuring and Dissolution Act 2018

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This provision preserves the status of approved liquidators appointed under the Companies Act 1967 and maintains references to the Official Receiver as constituted under the old Companies Act. The purpose is to ensure that liquidators and receivers appointed before the new Act's commencement retain their authority and functions without interruption.

This continuity is vital for the effective administration of company winding-up and insolvency processes that span the transition period.

Exemptions and Continuation of Certain Accounts and Applications under the Companies Act 1967

"Exemptions and continuation of certain accounts and applications under the Companies Act 1967" — Sections 526(3)-(7), Insolvency, Restructuring and Dissolution Act 2018

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Sections 526(3) to (7) provide for the continuation of certain accounts, applications, and procedural matters under the Companies Act 1967. These provisions ensure that financial and procedural arrangements established under the old law remain valid and enforceable during the transition.

This prevents disruption to company insolvency proceedings and protects the interests of creditors, shareholders, and other stakeholders.

Qualified Persons and Relevant Work During the Transitional Period

"‘qualified person’ means — (a) a person (each called in this subsection an approved liquidator) — (i) belonging to a class of persons declared, under section 9(1) of the Companies Act 1967 as in force immediately before 30 July 2020, to be approved liquidators; or (ii) who is approved as a liquidator under section 9(2) of the Companies Act 1967 as in force immediately before that date; (b) a public accountant; or (c) a solicitor; ‘relevant work’ means — (a) in relation to a qualified person who is an approved liquidator, acting as a liquidator or provisional liquidator, or as a receiver or manager, under this Act; (b) in relation to a qualified person who is a public accountant, acting as a judicial manager or interim judicial manager, a trustee of a bankrupt’s estate or a nominee under a voluntary arrangement, under this Act; or (c) in relation to a qualified person who is a solicitor, acting as a trustee of a bankrupt’s estate or a nominee under a voluntary arrangement, under this Act." — Section 527(3), Insolvency, Restructuring and Dissolution Act 2018

Section 527(1) allows qualified persons to continue undertaking relevant insolvency-related work during the transitional period until licensing decisions under the new Act are made. The definition of "qualified person" includes approved liquidators under the old Companies Act, public accountants, and solicitors, reflecting the professional categories historically involved in insolvency administration.

This provision exists to prevent a sudden shortage of qualified insolvency practitioners during the transition, which could otherwise delay or disrupt insolvency and restructuring proceedings. It balances the need for regulatory reform with practical continuity in professional services.

Minister’s Power to Prescribe Additional Saving or Transitional Provisions

"Minister's power to prescribe additional saving or transitional provisions for 2 years after commencement" — Section 527(2), Insolvency, Restructuring and Dissolution Act 2018

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This provision empowers the Minister to make regulations prescribing further saving or transitional provisions for up to two years after the Act’s commencement. This flexibility allows the government to address unforeseen issues or gaps that may arise during the implementation of the new insolvency regime.

The rationale is to provide a responsive mechanism to ensure the effective and orderly transition from the old to the new legal framework, safeguarding stakeholders’ interests and maintaining confidence in the insolvency system.

Absence of Penalties for Non-Compliance in Part 25

Notably, Part 25 does not specify any penalties for non-compliance. This absence is consistent with the nature of saving and transitional provisions, which primarily serve to preserve existing rights and arrangements rather than impose new obligations or offences. Penalties for non-compliance with substantive insolvency provisions are found elsewhere in the Act.

Cross-References to Other Legislation

Part 25 contains numerous cross-references to other legislation, reflecting its role in bridging the old and new legal regimes:

The repealed Bankruptcy Act (Cap. 20, 2009 Revised Edition) is referenced extensively to preserve its application to certain matters [Section 525].
Specific sections of the repealed Bankruptcy Act, such as sections 45, 148, 38, 82, 129, 163, and 412, are preserved with modifications [Section 525(7)].
The Companies Act 1967 and its various sections (e.g., 210(1), 211I, 211B, 216(2)(f), 227B(1), 253, 351, 291(6), 377(2)(a), 9(1), 9(2), 237, 339, 322, 343, 346, 440) continue to apply for certain transitional matters [Section 526].
Sections 450 and 451 of the new Act, which relate to repeal and amendments, are referenced to clarify the scope of the saving provisions [Sections 525(1), 526(1)].
Sections 16(1) and 17(1) of the new Act, concerning the appointment of the Official Assignee and Official Receiver, are cross-referenced to maintain continuity of officeholders [Sections 525(2), 526(2)(b)].
The Minister’s regulatory powers under the new Act are invoked to enable further transitional arrangements [Section 527(2)].

Conclusion

Part 25 of the Insolvency, Restructuring and Dissolution Act 2018 is a carefully crafted transitional framework that preserves the continuity and integrity of insolvency and company winding-up proceedings during the legislative transition. By maintaining the application of the repealed Bankruptcy Act and the Companies Act 1967 to ongoing matters, continuing the authority of existing officeholders and approved liquidators, and allowing qualified persons to perform relevant work during the transitional period, the legislature ensures legal certainty and operational stability.

The Minister’s power to prescribe additional saving provisions further enhances the flexibility needed to address unforeseen transitional issues. The absence of penalties within this Part reflects its protective and preservative function rather than a punitive one.

Overall, these provisions exemplify sound legislative drafting aimed at balancing reform with continuity, thereby safeguarding the interests of creditors, debtors, insolvency practitioners, and other stakeholders in Singapore’s insolvency and restructuring landscape.

Sections Covered in This Analysis

Section 525 – Saving and Transitional Provisions Relating to the Bankruptcy Act
Section 526 – Saving and Transitional Provisions Relating to the Companies Act 1967
Section 527 – Transitional Provisions Relating to Qualified Persons and Minister’s Powers

Source Documents

For the authoritative text, consult SSO.

Written by Sushant Shukla

Topics

Singapore SSOStatutes Legislation