In re oCap Management Pte Ltd (in liquidation) [2026] SGHC 102, the funds of a Company in liquidation were subject to a restraint order granted under the Mutual Assistance in Criminal Matters Act 2000 (“MACMA“) in assistance of criminal proceedings in Germany against the Wirecard Group. The Singapore High Court had to consider whether to permit payment of incurred and future fees to the liquidators of the Company.
The liquidators sought release of two categories of funds. First, they sought the Court’s approval for payment of fees and disbursements already incurred in the liquidation, including work connected with examination proceedings, updating a claims memorandum, administering the liquidation, engaging with creditors, and assessing potential claims (“Incurred Fees“). Secondly, they sought the Court’s approval for payment of future fees to pursue two anticipated claims (“Future Fees“) which was to be funded by a litigation funder.
The Court allowed the release of the Incurred Fees but dismissed the application for release of the Future Fees. In doing so, the Court explained that when a company’s assets are restrained under the MACMA, the dominant consideration of liquidators would be the protection and preservation of the company’s assets.
Incurred Fees
The MACMA does not allow a restraint order where this would prevent the payment of expenses which were properly incurred. In assessing whether the expenses were properly incurred, the test is whether the sum is a fair, reasonable and proportionate reflection of the value of the services rendered.
Regarding the Incurred Fees, the Court found that the incurred sum was fair, reasonable and proportionate having regard to the time spent, the complexity of the work, and the rates charged. The Court also noted that in this context, if substantial work was required for potential claims, prior court authorisation should be sought before undertaking such work.
Future Fees
Turning to the release of the Future Fees, the Court set out the following principles:
- The overarching requirement is that the work for which expenses are to be claimed must be necessary. Apart from situations where there is a pool of funds readily recoverable with little risk and effort, the court would generally hesitate to describe a clawback action as necessary.
- Where there is a restraint order in place under the MACMA, this indicates that prosecutorial and law enforcement agencies have assessed that there is a need to preserve the funds of the company, both for investigative purposes and to protect defalcated assets for the benefit of the victims of crime. Given the public and state interests involved, if there is any contest or tension between the criminal process and the insolvency process, the latter must generally give way to the former.
- To strike an appropriate balance between the competing criminal and insolvency regimes, the dominant consideration of the liquidators should be the protection and preservation of the assets of the company, for the benefit of both the victims of crime and the creditors of the company. In this context, the actions undertaken by the liquidators should generally be prophylactic or defensive in nature, and should be limited.
Applying the above principles, the Court declined to release the Future Fees. The Court considered that the proposed claims involved significant risk and uncertainty. The Court also rejected the argument that refusing the Future Fees would inhibit the liquidators from exercising their functions. Although pursuing claims can ordinarily fall within a liquidator’s functions, the Court held that this case was different because virtually all the Company’s assets were subject to a MACMA restraint order. The liquidators’ role was therefore circumscribed, and should be focused on distributing what remained.
Significance
The case illustrates the competing policy interests that come into play, when a company in liquidation is also the subject of criminal proceedings and seizures.
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