A Global Guide
Chapter 29: NATIONAL REPORT FOR SINGAPORE
This chapter considers the treatment of executory contracts upon the default of a debtor company under Singapore law and the main factors behind the most recent reforms in the area. This chapter specifically considers the issues relating to the treatment of executory contract according to Singapore corporate insolvency framework. The general and specific rules applicable to these contracts, and the overarching need not to unduly prejudice the autonomy of the parties are evaluated against the insolvency law policy goals, i.e., to maximise the insolvent’s assets for the satisfaction of their creditors and to promote the rescue of distressed yet viable businesses. According to the law (reformed as recently as 2017), the right to disclaim unprofitable contracts is not available under restructuring proceedings. This is not consistent with such objectives, and with the intention to promote corporate rescue in the legal and business community. Additionally, the enforceability of ipso facto clauses may have negative consequences on corporate rescue proceedings. As the current position under Singaporean law is too much imbalanced to favour the interests of the creditors, the author believes that reforms should be taken to regulate ipso facto clauses with the intention to find a more appropriate balance between the rights and interests of both creditors and debtors.
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