Case Details
- Citation: [2025] SGHC(I) 18
- Title: TERRAFORM LABS PTE. LTD.
- Court: Singapore International Commercial Court (International Commercial Court)
- Originating Application No: Originating Application No 5 of 2024
- Summons No: Summons No 26 of 2025 (SUM 26/2025)
- Related Proceedings: SIC/SUM 19/2025 (SUM 19/2025); SIC/OA 3/2024 (OA 3; “Beltran Action”); SIC/ORC 13/2025 (ORC 13; “Plan Recognition Order”); SIC/SUM 57/2024 (SUM 57)
- Statutory Framework: Part 11 of the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed); s 252; Third Schedule; UNCITRAL Model Law on Cross-Border Insolvency
- Foreign Proceeding: United States Bankruptcy Court for the District of Delaware, Chapter 11; In re Terraform Labs Pte. Ltd., Case No 24-10070
- Judgment Date(s): 6 May 2025; 6 June 2025; 11 July 2025
- Judge: Peck IJ
- Applicant/Respondent (in SUM 26): Terraform Labs Pte Ltd (“TFL”) as applicant; non-parties as respondents/non-parties in the related joinder application
- Parties / Non-parties: A group of individuals and entities including Adam Dulberger, Angelo Rondello, Aurelien Chevrier, Benjamin Thompson, Black Mandrill, Black Pip Ltd, Bryan Droznes, Christopher Mege, Damien Querbes, Damien Riviere, Enrico Michele Fratta, Frederic Blanc, Gabriel Nul, Gauthier Benat, Jordan Suchet, Kashyap Patel, Kyle Novak, Nicolas Dequiedt, Numa Collinet, Raminder Singh Balbir Hora, Remo Gentile, Thomas Birnstiel, Thomas Blanc, Tristan Le Gac, Yacine Najari (listed as non-parties)
- Legal Area(s): Cross-border insolvency; recognition and reliefs; injunctions and moratoria; costs in insolvency-related proceedings; civil procedure
- Judgment Length: 22 pages; 5,978 words
- Procedural Posture: SUM 26/2025 sought to strike out SUM 19/2025 and enforce a moratorium/injunction contained in ORC 13 (Plan Recognition Order); costs were reserved and later determined
- Key Prior Decision: Re Terraform Labs Pte Ltd [2025] 3 SLR 1516 (the “TFL Plan Recognition Decision”)
- Related Singapore Decision: Re Terraform Labs Pte Ltd [2025] SGHC(I) 17 (Beltran Action context)
Summary
This decision of the Singapore International Commercial Court (“SIC”) addresses the consequences of non-compliance with protections granted to a foreign debtor under Singapore’s cross-border insolvency framework. In particular, it concerns costs arising from an application by Terraform Labs Pte Ltd (“TFL”) to strike out a belated joinder application brought by certain non-parties in the ongoing “Beltran Action” (SIC/OA 3/2024). The court’s earlier recognition of TFL’s Chapter 11 plan in Singapore had included an explicit injunction barring the commencement or continuation of actions against TFL in respect of claims compromised under the plan.
While the court granted TFL’s application in SUM 26 (in part) by striking out the relevant portions of SUM 19 as against TFL, the costs issue was reserved. In the present grounds of decision, the court ultimately ordered the non-parties to pay $74,200 to TFL (jointly and severally) as reimbursement for TFL’s legal efforts in enforcing the Plan Recognition Order (ORC 13). The court emphasised that purposeful and intentional interference with recognition orders—especially where it predictably undermines the foreign restructuring plan—will expose parties to adverse costs consequences.
What Were the Facts of This Case?
TFL faced severe financial distress in the United States following its Chapter 11 proceedings in the District of Delaware. The genesis of the insolvency and the restructuring context were set out in the court’s foundational Plan Recognition Decision, which also explained why TFL was effectively insolvent after a massive jury award in favour of the US Securities and Exchange Commission. After negotiations, TFL’s Chapter 11 plan (“the Plan”) was confirmed by the Bankruptcy Court through a Confirmation Order. TFL then sought recognition and assistance in Singapore under the UNCITRAL Model Law on Cross-Border Insolvency as incorporated into Singapore law by Part 11 of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”).
Recognition was granted in Singapore through SIC/ORC 13/2025 (“ORC 13”), following TFL’s application in SIC/SUM 57/2024 (“SUM 57”). ORC 13 did not merely recognise the foreign proceeding; it also provided specific reliefs in aid of the Chapter 11 case. Most importantly for present purposes, ORC 13 contained an explicit injunction/moratorium against commencing or continuing actions concerning TFL’s property, rights, obligations, or liabilities for claims that had been compromised under the Plan. The injunction was framed to prevent claimants from undermining the restructuring outcomes achieved through the Plan and the Confirmation Order.
Within the Plan, the court noted a structured classification scheme that created different rights for different groups of claimants. A representative group of claimants in the Beltran Action (“Beltran Parties”) had secured a special position. Their claims were linked to a Singapore escrow arrangement funded as a condition to releasing an injunction in the US proceedings. The escrow funds were deposited with the SIC in the amount of USD $56,948,675.49. Under the Plan, the escrow was treated as TFL’s asset with a reversionary potential: if not fully required to satisfy Beltran Parties’ claims, remaining funds could revert to TFL and be redistributed to other creditors.
Crucially, the Plan’s classification scheme meant that only those individuals who were members of the Beltran Parties’ class at the time of Plan confirmation had the benefit of the escrow-linked secured status. Other claimants, including the non-parties in this costs dispute, were classified in an unsecured class (class 5) with undetermined recovery percentages. The non-parties therefore had an economic incentive to attempt to improve their position by joining the Beltran Action and thereby seeking to fall within the more favourable class 3 secured status.
What Were the Key Legal Issues?
The principal legal issue in SUM 26 was whether the court should strike out the non-parties’ belated attempt to join the Beltran Action (SUM 19/2025) in circumstances where ORC 13 had already imposed an injunction barring actions inconsistent with the Plan and its compromises. The court had to consider the effect of the Plan Recognition Order and the scope of the moratorium/injunction, including whether the non-parties’ joinder attempt was a prohibited “commencement or continuation” of proceedings in respect of claims compromised under the Plan.
Once the court determined that SUM 19 should be struck out (at least as against TFL), a second issue arose: costs. The court had reserved costs after the hearing on 6 May 2025, and later considered further submissions. The question then became what costs order was appropriate, proportionate, and reasonable in the circumstances—particularly where the non-parties were said to have acted with knowledge of ORC 13 and despite warnings that their conduct would breach the injunction.
How Did the Court Analyse the Issues?
The court’s analysis proceeded against the background of its earlier recognition decision. The Plan Recognition Decision (Re Terraform Labs Pte Ltd [2025] 3 SLR 1516) was described as foundational because it explained the factors considered in granting recognition under Art 21(1) of the UNCITRAL Model Law and the basis for entering ORC 13. In the present grounds, the court treated the existence and content of ORC 13 as central: it was not a discretionary or informal restraint, but a court order intended to facilitate the implementation of the foreign restructuring plan.
In explaining the context for SUM 26, the court highlighted the specific terms of ORC 13, including the injunction that “no actions or proceedings” concerning TFL’s property, rights, obligations or liabilities (save for the Beltran Action itself) in respect of all claims compromised under the Plan shall be commenced or continued against TFL. The court also referred to the liberty to apply provision in ORC 13 (paragraph 5), which allowed persons affected by the order to seek clarification or directions. This mattered because it provided a procedural route for affected parties to regularise their position rather than proceed in defiance of the injunction.
The court characterised the non-parties’ conduct as a deliberate attempt to improve their status under the Plan. The non-parties had sought to be joined as additional plaintiffs in OA 3 shortly after ORC 13 was entered. The court inferred that their motivation was economic: by joining the Beltran Action, they hoped to shift from class 5 unsecured status to class 3 secured status linked to the escrow. The court noted that they had been given fair warning and were placed on notice to withdraw SUM 19 or face adverse consequences. In other words, the court treated the breach not as inadvertent but as purposeful and intentional.
On costs, the court applied the general civil principle that costs should follow the event, but with careful attention to proportionality and reasonableness. The court considered the legal efforts undertaken by TFL in pursuing SUM 26 to enforce ORC 13. It then determined that a costs order of $74,200 against the non-parties (jointly and severally) as reimbursement was reasonable and proportionate. The court’s reasoning also served a broader normative function: it sought to deter future interference with recognition orders and to protect the integrity of the cross-border insolvency regime.
Importantly, the court linked the costs award to the policy rationale of cross-border insolvency recognition. Recognition orders under the SG Model Law are designed to provide certainty and stability to the foreign debtor’s restructuring process. If parties could disregard injunctions and pursue proceedings that undermine the plan, the effectiveness of recognition would be compromised. The court therefore emphasised that parties who take unjustified actions in defiance of protections granted to foreign debtors will face costs consequences, particularly where the adverse impact on the foreign debtor and its assets is directly connected to a wilful violation of a court order meant to facilitate implementation of the restructuring plan.
What Was the Outcome?
The court granted TFL’s application in SUM 26 (in part), striking out SUM 19 only as against TFL. The practical effect was that the non-parties’ attempt to join the Beltran Action in a manner inconsistent with ORC 13’s injunction could not proceed against TFL. This reinforced the binding nature of the Plan Recognition Order and the moratorium/injunction contained within it.
On costs, the court ordered the non-parties to pay $74,200 to TFL (jointly and severally) as reimbursement for TFL’s legal efforts in enforcing ORC 13. The order signals that costs can be used as a targeted remedy to discourage intentional breaches of recognition protections in cross-border insolvency matters.
Why Does This Case Matter?
This case is significant for practitioners because it demonstrates how Singapore courts will enforce the protective architecture of the UNCITRAL Model Law regime in a concrete, enforcement-oriented way. While recognition of foreign insolvency proceedings is often discussed at the level of jurisdiction and discretion, this decision shows that the court will also police compliance with the substantive reliefs granted in recognition orders—particularly injunctions designed to preserve the restructuring plan’s integrity.
From a litigation strategy perspective, the decision underscores that parties who are “affected” by a recognition order should use the liberty to apply mechanism rather than proceed unilaterally. The court’s emphasis on warnings and the availability of procedural routes suggests that a party’s knowledge and intent will be relevant not only to whether relief should be granted, but also to the costs consequences of non-compliance.
For insolvency and restructuring counsel, the case also illustrates the practical consequences of plan classification schemes. Where a plan creates differentiated rights (such as escrow-linked secured status for a defined class), attempts to re-characterise one’s position through late procedural steps may be treated as interference with the plan’s compromises. The decision therefore provides a cautionary lesson for claimants seeking to improve their status after recognition: the cross-border insolvency process is designed to be orderly, and Singapore courts will protect that order.
Legislation Referenced
- Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed), Part 11
- Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed), s 252
- Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed), Third Schedule (UNCITRAL Model Law on Cross-Border Insolvency)
- UNCITRAL Model Law on Cross-Border Insolvency, Art 21(1)
Cases Cited
- Re Terraform Labs Pte Ltd [2025] 3 SLR 1516 (“TFL Plan Recognition Decision”)
- Re Terraform Labs Pte Ltd [2025] SGHC(I) 17 (context of the Beltran Action and related issues)
- Beltran, Julian Moreno and others v Terraform Labs Pte Ltd and others [2025] SGHC(I) 17
- In re Terraform Labs Pte. Ltd., Case No 24-10070 (US Bankruptcy Court for the District of Delaware, Chapter 11) (referenced as the foreign proceeding)
Source Documents
This article analyses [2025] SGHCI 18 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.