Managing Partner Bazul Ashhab and Senior Associate Prakaash Silvam share with Asian Legal Business the key maritime trends from the past year and what to anticipate in 2018

Oon & Bazul’s Managing Partner and Head of Dispute Resolution Bazul Ashhab and Senior Associate Prakaash Silvam share with Asian Legal Business the key maritime trends from the past year and what to anticipate in 2018 in the article, “Unchartered Waters”.  A snippet of their section as follows:

“For Bazul Ashhab, managing partner, and Prakaash Silvam, senior associate, of Oon & Bazul, 2017 was a challenging year for the shipping sector. Two key trends they noticed were an increase in insolvency and restructuring work, and an increase in cybercrime in shipping operations. “As both shipowners and charterers continue navigating a choppy economy, there were more cases of insolvency, and in a bid to stave off insolvency, concerted focus was on restructuring to streamline operational costs,” they say. “A key change in 2017 was Singapore’s formal adoption of the UNCITRAL Model Law on Cross Border Insolvency, which came into effect on May 23 last year.”

They note that the Model Law provides a platform for the Singapore court’s recognition of and assistance to foreign insolvency process, the nature and extent of such recognition and assistance turning on whether the foreign liquidator was appointed in the insolvent company’s Centre of Main Interests (COMI). “Under the Model Law framework, recognition is largely a formalistic process and upon an application being made by a foreign representative in the proper form, foreign insolvency proceedings will be mandatorily recognised, subject to the public policy exception,” Ashhab and Silvam say. “With this, foreign insolvency office holders appointed in proceedings commenced from May 23, 2017, onwards, now no longer rely on the common law to recognise foreign proceedings; the Model Law gives them direct access to the Singapore courts to seek recognition of foreign insolvency proceedings, and obtain interim relief in respect of the debtor’s assets while the courts decide on the main application.”

While the Model Law does not provide for restructuring of a foreign company’s debts and liabilities in Singapore, the amendments to the Companies Act in 2017 extended Singapore’s Scheme of Arrangement and Judicial Management mechanisms of restructuring to foreign companies which are liable to be wound up under the Companies Act, they add. “Singapore’s adoption of the Model Law and extension of the Scheme of Arrangement and Judicial Management regimes are positive developments for cross-border insolvency practice, judicial management and restructuring in Singapore,” say Ashhab and Silvam. “With a growing number of global maritime and offshore firms with complex cross-border corporate and asset holding structures going into liquidation or looking to quickly and efficiently restructure to avoid liquidation, these changes to Singapore’s insolvency and restructuring laws may see more global maritime and offshore firms looking to Singapore as an attractive jurisdiction to restructure. We can already see this happening with two major troubled players, EMAS Offshore Limited and Nam Cheong choosing to restructure their debts in Singapore, and recently having their proposed scheme of arrangements successfully obtaining creditor approval.””

To read the full article, click here.