DLA Piper acted as international counsel to Zetta Jet Pte. Ltd. (a Singapore-incorporated company) (“Zetta Jet”) and others, as applicants, in a seminal judgment on the recognition of foreign insolvency proceedings under the UNCITRAL Model Law on Cross-Border Insolvency (as adopted in Singapore in 2017) (the “Singapore Model Law”).
Zetta Jet and its wholly-owned US subsidiary, Zetta Jet USA, Inc. (the “Zetta Entities”) are currently the subject of Chapter 7 US bankruptcy proceedings that are pending in the United States Bankruptcy Court for the Central District of California.
The landmark decision considered certain critical factors to be used when determining the centre of main interests (“COMI”) of a debtor company under the Singapore Model Law. The decisive factors considered by the Court included the relevant date to be used to determine the Zetta Entities' COMI and the proper method to determine the applicants’ COMI, among other issues. When analysing these issues, the Singapore High Court considered the different approaches taken in the United States, England and Australia, as put forward by the applicants.
The Singapore High Court granted full recognition to the US Chapter 7 Trustee of the Zetta Entities. In granting full recognition, the Singapore High Court held that the COMI of the Zetta Entities was the United States, and that the Chapter 7 bankruptcy proceedings in respect of the Zetta Entities should therefore be recognised as foreign main proceedings in Singapore. Crucially, this is the first time that the Singapore High Court has found the COMI of a Singapore-incorporated company to be outside Singapore.
Andrew Payne, Singapore Restructuring Partner who led the DLA Piper team on this application, commented: “We are delighted with the outcome of this judgment for Zetta Jet. The Singapore High Court's judgment in this case is a significant step in the development of Singapore jurisprudence under the newly enacted Singapore Model Law and provides guidance on approaches to COMI issues in the future. The global capabilities of DLA Piper and experience in cross-border insolvency issues enabled our team to provide crucial insight into the different approaches taken by various jurisdictions outside Singapore (including the United States, England and Australia). We are pleased that our proposed approach on this area of law recently enacted in Singapore was validated by the Court in this instance.”
Key members of the DLA Piper team included Andrew Payne (Partner, Singapore), Diantha Ho (Associate, Singapore), John Lyons (Partner, USA), Craig Martin (Partner, USA) and Katie Allison (Associate, USA).
