In Sun Electric Power Pte Ltd v RCMA Asia Pte Ltd [2021] SGCA 60, the Singapore Court of Appeal had the opportunity to consider some vital questions relating to insolvency proceedings. In the context of an appeal against a winding-up order, the Court considered whether the company’s directors should be entitled to control the appeal, and who should be responsible for the costs of the appeal.
The Court also examined the test for determining whether a company is deemed unable to pay its debts under sections 254(2)(c) and 254(2)(a) of the Companies Act. Importantly, the decision establishes the cash flow test as the sole applicable test to determine insolvency for purposes of winding up under section 254(2)(c) of the Companies Act, which is retained in section 125(2)(c) of the Insolvency, Restructuring and Dissolution Act 2018.
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