Ascertaining COMI – the Importance of Transparency in Post-Insolvency Conduct

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The Model Law on Cross-Border Insolvency (“Model Law”), as incorporated into the Third Schedule of the Insolvency, Restructuring and Dissolution Act 2018 (“IRDA”), forms an integral part of Singapore law regarding the recognition of foreign insolvency proceedings. A key issue for any court applying the Model Law is whether the foreign proceeding qualifies as a foreign main proceeding. If so, the applicant will be entitled to the relief prescribed under Article 20, which includes a mandatory stay of proceedings against the debtor and its property, amongst others. To establish that a foreign proceeding is a foreign main proceeding, the applicant must demonstrate that the proceeding is taking place in the state where the debtor has its “Centre of Main Interests” (“COMI”).

Given the significant relief afforded to foreign main proceedings, the court should remain vigilant about artificial shifts of COMI. One key issue is whether the court can consider activities that take place after the commencement of insolvency proceedings. If parties could shift their COMI at their own fancy merely by commencing insolvency proceedings in a foreign country or administering a restructuring there, the purpose of the COMI requirement would be undermined.

This concern was addressed by the General Division of the High Court in Re Tantleff, Alan [2022] SGHC 147. The court held that the fact that insolvency proceedings were ongoing in the US was irrelevant in determining COMI, as were the activities of the foreign representative. To prevent parties from artificially choosing their COMI, the court opined that COMI should be assessed based on the company’s activities before the foreign restructuring commenced.

The decision in Tantleff should be contrasted with the Court of Appeal’s decision in British Steamship Protection and Indemnity Association Ltd and another v Thresh, Charles [2024] 2 SLR 317. While the Court of Appeal agreed that parties should not be allowed to manipulate their COMI artificially, the Court of Appeal was doubtful that this justified an absolute bar on considering any post-insolvency conduct. The question was ultimately fact-sensitive, and the Court of Appeal opined that the recognising court should assess all relevant factors while bearing in mind the high threshold for a COMI shift.

Most recently, the Singapore International Commercial Court (“SICC”) in Re Quoine Pte Ltd [2025] SGHC(I) 5 affirmed the Court of Appeal’s decision in British Steamship. The SICC reiterated that the COMI analysis is dynamic and fact-dependent. The determination of COMI varies from case to case and depends on the weight given to legitimate factors that are objectively ascertainable by third parties, especially creditors. On the facts, the SICC found that the indicators supporting a COMI shift from Singapore to the US were meaningful and undisputed. This included the fact that the debtor no longer operated out of Singapore, that the debtor’s new directors were all based in the US and had to seek approval from the US bankruptcy court, and that the recognition of the Debtor’s US proceedings would qualify it to be part of a Delaware trust together with other affiliated companies involved in the group restructuring. Furthermore, the debtor’s restructuring activities were well-publicized, and every creditor was aware of the status of the debtor’s US proceedings. The SICC emphasized that the touchstone for COMI assessment is the perception of third parties, particularly creditors, regarding where the debtor would open primary insolvency proceedings based on readily identifiable factors.

In sum, the evolving jurisprudence on COMI in Singapore underscores the delicate balance the court must strike between preventing forum shopping and ensuring a fair, pragmatic approach to cross-border insolvency. While earlier decisions like Tantleff took a strict stance against considering post-insolvency conduct, later cases, including British Steamship and Quoine, reflect a more nuanced and fact-sensitive approach. The overarching principle remains that the COMI should be objectively ascertainable by third parties, particularly creditors, to maintain legal certainty and predictability. As Singapore continues to develop its insolvency framework, these decisions provide valuable guidance on how the court will navigate the complexities of cross-border insolvency recognition while safeguarding against artificial manipulation of jurisdiction.

For more information, please contact:

Matthew Teo (matthew.teo@helmsmanlaw.com)

Irvin Ho (Irvin.ho@helmsmanlaw.com)

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