Court Grants Extension of Moratoria and Sealing of Documents in Restructuring of Cryptocurrency Business
The law is constantly developing to fit the ever-changing world. Most recently, with the digitalisation of the commercial landscape and the proliferation of cryptocurrencies, non-fungible tokens (NFTs) and metaverse-related businesses, the courts have had to apply or adapt the law to deal with novel situations. This was the case in Re Babel Holding Ltd and other matters [2023] SGHC 98, where the Singapore High Court had to apply restructuring and insolvency law in the context of a cryptocurrency-related business.
The applicants were a group of companies in the cryptocurrency industry seeking to extend moratoria under section 64 of the Insolvency, Restructuring and Dissolution Act 2018 to facilitate the formulation of a restructuring plan, as well as to seal certain documents which contained the unredacted versions of lists of the applicants’ creditors as well as letters of support in respect of the moratoria extension.
The Court allowed the sealing of the documents, highlighting the need to safeguard the commercially sensitive information at this point in the restructuring process. The Court also allowed the extension of the moratoria, finding that the applicants had met the statutory and common law requirements for such extension. In particular, the Court found that: (i) the applications were made bona fide; and (ii) there was a reasonable prospect of the intended scheme of arrangement working and being acceptable to the general run of creditors.
The decision demonstrates the application of Singapore’s restructuring and insolvency framework to foreign companies and the Court’s approach to the grant of moratoria and sealing orders in the particular circumstances of cryptocurrency and other digital businesses.
For more information, click here to read our Legal Update.
Singapore Conducts World's First Live Electronic Transferable Record Cross-Border Trade
The digitalisation of trade has been the subject of increasing focus, with accelerating developments in both the technology and the legal framework required to support the necessary transformation. Countries are looking to digitalisation for the advantages it carries in terms of efficiency, security and cost savings. In this regard, Singapore has taken a position as a regional leader in trade digitalisation, with numerous programmes and initiatives directed at achieving effective implementation.
In line with this, the Infocomm Media Development Authority (“IMDA“) has announced that it has successfully executed a live shipment from Singapore to Thailand during the first quarter of 2023. This fully paperless, live cross-border trade was conducted using an Electronic Transferable Record (“ETR“), which is functionally equivalent to a paper Bill of Lading using Singapore’s TradeTrust framework.
IMDA has provided further details on the ETR cross-border trade it conducted with the participation of industry partners. ExxonMobil Asia Pacific Pte. Ltd. was the shipper, Bunkerchain was the digital platform provider, and VLK was the vessel owner. The process took place as follows:
- ExxonMobil Asia Pacific shipped liquid chemicals from Singapore to Thailand.
- VLK issued an electronic Bill of Lading (“eBL”) using Bunkerchain, which is a TradeTrust-enabled digital platform.
- A Digital Passports for Ships was created on the eBL, ensuring that digital identity used in the signing was onboarded and verified.
- The eBL was surrendered on the TradeTrust Reference Implementation, demonstrating interoperability across different systems, and interoperability between digital and paper-based processes.
- VLK was supported by their Protection and Indemnity Club, on the basis that liabilities arising from the use of the eBL are equivalent to the liabilities under the use of a paper-based Bill of Lading.
- The eBL was legally supported solely by statutory law without the use of any contract law or rulebook, demonstrating that an eBL issued using the TradeTrust framework can be used in a jurisdiction that has not implemented the United Nations Commission on International Trade Law Model Law on Electronic Transferable Records (UNCITRAL MLETR), such as Thailand.
This is the world’s first ETR cross-border trade, and demonstrates Singapore’s championing of the pushing of boundaries of digitalisation for global trade. Parties involved in international trade should be aware of Singapore’s growing capabilities in this regard, and the development of trade options that they may be able to take advantage of in the near future.
For more information, click here to read our Legal Update.
Singapore and Cambodia Sign Memorandum of Understanding for Carbon Credits Cooperation
In a press release, the Ministry of Trade and Industry Singapore announced that Singapore and Cambodia had signed on 26 April 2023 a Memorandum of Understanding (“MOU“) to collaborate on carbon credits aligned with Article 6 of the Paris Agreement (“Article 6“). Article 6 allows countries to voluntarily cooperate to achieve emission reduction targets set out in their respective nationally determined contributions (“NDCs“).
It is the intention of Singapore to achieve net zero emissions by 2050 and advance global climate action through collaborations with like-minded partners. Establishing partnerships with like-minded countries like Cambodia to work together on carbon credits is one way to attain this.
Under the MOU, both countries have agreed to:
- work towards crafting a legally binding agreement that provides a framework for the transfer of correspondingly adjusted carbon credits by end-2023;
- identify Article 6 compliant carbon credit projects to enable them to achieve their respective NDCs; and
- exchange information on best practices and capacity building relating to carbon credits collaboration.
Singapore and Shanghai Reaffirm Strong Ties and Broader Cooperation with 14 MOUs
Enterprise Singapore has announced that the 4th Singapore-Shanghai Comprehensive Cooperation Council (“SSCCC“) meeting took place in Singapore on 24 April 2023.
Established in 2019, SSCCC serves as a pivotal platform in developing deeper ties between Singapore and Shanghai, as well as between Singapore and the broader Yangtze River Delta region.
At the meeting attended by Singapore and Chinese officials and business representatives, the participants agreed to enhance bilateral cooperation in digital and green economies and deepen strong partnerships in financial services and innovation. The leaders also reaffirmed their commitments to the global climate change agenda and agreed to explore more substantive partnerships in sustainability. For example, Singapore intends to work with Shanghai to facilitate greater cross-border green and transition finance to support the region’s transition, and to pilot green and digital solutions in improving global maritime supply chains.
A total of 15 agreements, comprising 14 Memoranda of Agreement (“MOUs“) and one Letter of Intent (“LOI“), were signed at the meeting, covering areas such as people-to-people exchanges, financial services, technology and innovation, as well as emerging areas such as digital economy. These MOUs and LOI include, amongst others, the following:
Partners | Purpose |
Singapore Business Federation (SBF) – China International Import Expo Bureau (CIIEB) | Collaboration on Singapore’s participation in the 6th China International Import Expo |
Maritime and Port Authority (MPA) – Shanghai Maritime University | Collaboration on maritime talent and knowledge exchange |
OCBC Bank – UnionPay International | Collaboration on digital payments |
Singapore Exchange (SGX) – Shenwan Hongyuan Securities | Collaboration in equities derivatives, FICC and equities-related business |
Ministry of Health (MOH) – Shanghai Municipal Health Commission | Cooperation in healthcare |
Singapore Tourism Board (STB) – Shanghai Municipal Administration of Culture and Tourism | Promotion of tourism exchanges and cooperation |
Infocomm Media Development Authority (IMDA) and Shanghai Municipal Commission of Economy and Informatization | Collaboration in digital economy |
CrimsonLogic – Shanghai Data Group | Cooperation to enhance cross-border flow of goods through digitalisation |
Green Finance Taskforce Established to Strengthen Collaboration in Green and Transition Finance between China and Singapore
On 21 April 2023, the Monetary Authority of Singapore (MAS) and the People’s Bank of China (“PBC“) announced the establishment of the China-Singapore Green Finance Taskforce (“GFTF“).
The GFTF is co-chaired by MAS’ Assistant Managing Director (Development and International) and Chief Sustainability Officer, Ms Gillian Tan, and Chair of the China Green Finance Committee, Dr Ma Jun. The members of GFTF comprise senior representatives and sustainable finance experts from Singapore and China’s financial institutions, and green FinTech companies.
To better meet the region’s needs as it transitions to a low carbon future, the GFTF seeks to:
- provide a platform for knowledge exchange;
- enhance bilateral cooperation between China and Singapore in green and transition finance; and
- facilitate greater public-private sector collaboration.
At the inaugural meeting held in Chongqing on 21 April 2023, the GFTF discussed joint initiatives that aim to scale up green and transition financing flows between China, Singapore, and the region. Initially, the GFTF will establish three workstreams focusing on the following priority areas:
- Taxonomies and Definitions. Under the International Platform on Sustainable Finance (“IPSF“), MAS and PBC will collaborate to: (i) achieve interoperability between the China and Singapore taxonomies; (ii) enhance the use of the IPSF’s Common Ground Taxonomy; and (iii) deepen the understanding of transition activities defined by China and Singapore.
The IPSF’s Common Ground Taxonomy provides an in-depth comparison of the existing taxonomies for environmentally sustainable investments and puts forward areas of commonality and differences between the European Union’s and China’s green taxonomies.
- Products and Instruments. China International Capital Corporation and the Singapore Exchange will establish a workstream to strengthen sustainability bond market connectivity between China and Singapore. This includes the issuances of, and mutual access to, green and transition bond products in China and Singapore.
- Technology. A workstream will be established by Beijing Green Exchange and Metaverse Green Exchange that leverages technology to facilitate sustainable finance adoption. This will include the piloting of digital green bonds with carbon credits.
Supreme Court of Singapore and Supreme People's Court of the People's Republic of China Sign MOU on the Management of International Commercial Disputes in Context of Belt and Road Initiative
On 1 April 2023, the Singapore International Commercial Court (“SICC“) announced that the Supreme Court of Singapore and the Supreme People’s Court of the People’s Republic of China had signed a Memorandum of Understanding (“MOU“) on Cooperation on the management of international commercial disputes in the context of the Belt and Road Initiative (“BRI“) through a Litigation-Mediation-Litigation (“LML“) framework.
The two courts concluded the MOU in view of the increasing complexity of international commercial disputes particularly in the context of the BRI (“BRI disputes“). The development of an LML framework to resolve BRI disputes is in recognition of the flexibility and efficiency afforded by mediation, which not only saves the parties’ time and costs but also preserves business relationships in the course of the dispute resolution process.
Key features of the MOU include the following:
- SICC and the China International Commercial Court (“CICC“) will each develop and implement the LML framework for the management of BRI disputes.
- The LML framework in each court may be developed in collaboration with any domestic or foreign mediation expert and any domestic, foreign or international mediation institution in accordance with their respective procedural laws and rules of court.
- Both courts will share information on their LML framework and other dispute management practices, including information on procedural rules, case management protocols, and enforcement processes relating to SICC and CICC.
- Both courts agree to promote the LML framework by recommending to the parties to disputes the adoption of the prescribed LML Model Clauses in appropriate circumstances.
The signing of the MOU demonstrates the strong commitment of the two countries to collaborate to enhance the resolution of BRI disputes.
ASEAN Taxonomy V2: Enabling a Just Transition Towards Sustainable Finance Adoption by ASEAN
The ASEAN Taxonomy for Sustainable Finance Version 2 (“ASEAN Taxonomy V2“) was released on 27 March 2023 by the ASEAN Taxonomy Board. The release follows extensive stakeholder consultations upon the earlier released ASEAN Taxonomy for Sustainable Finance Version 1. A crucial addition to the ASEAN Taxonomy V2 is the inclusion of social aspects as the third essential criteria, adding a holistic dimension to the taxonomy principles. Other additions include the completion of the Foundation Framework, building upon the broad framework laid out previously, and also the finalisation of the details in the initial Plus Standard.
The ASEAN Taxonomy seeks to enable a just transition towards sustainable finance adoption by ASEAN Member States (“AMS“) by providing a common and credible framework for AMS and their stakeholders to assess and classify sustainable economic activities. Having an ASEAN Taxonomy will attract more capital flow into the region to help AMS and their stakeholders to transition to a low carbon economy and achieve AMS’ climate change goals.
While designed to be interoperable with other international taxonomies, there are unique aspects of the ASEAN Taxonomy V2, such as the following:
- The adoption of a multi-tiered approach with two main elements:
- A Foundation Framework that uses principles-based guiding questions and a decision tree to assess and classify sustainable activities; and
- A Plus Standard which is developed as an advanced form of assessment approach that uses both threshold-based (quantitative) and process-based or practice-based (qualitative) technical screening criteria to assess and classify sustainable activities.
- A global first for a regional taxonomy, the ASEAN Taxonomy V2 introduces coal phase-out as an activity eligible for classification as a sustainable activity. The novel inclusion of coal phase-out provides an avenue to expedite energy transition efforts within ASEAN.
For more information, click here to read our Legal Update which provides a brief overview of the ASEAN Taxonomy V2 and what it means for AMS and businesses in the region.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
