Singapore International Commercial Court: In an application under the UNCITRAL Model Law on Cross-Border Insolvency (Model Law), as adopted in Singapore through Section 252 and the Third Schedule of the Insolvency, Restructuring and Dissolution Act 2018, Christopher S. Sontchi IJ., concluded that the requirements for granting recognition had been satisfied. The Court found that the Indonesian Bankruptcy Proceeding was a foreign proceeding under the Model Law, that the Curators were foreign representatives, and that the centre of main interests of the debtor companies was Indonesia. Therefore, the Court recognised the Indonesian Bankruptcy Proceeding as a foreign main proceeding and granted the additional relief sought, including extended stay relief, investigative relief and administrative relief, subject to a condition that no assets or proceeds thereof could be repatriated out of Singapore or distributed without leave of the Court.
Background
In the present case, Applicants 1-4 (Sritex Indonesian Entities), were companies in liquidation in Indonesia and formed part of the Sritex Group, a textile conglomerate incorporated and headquartered in Central Java. The Sritex Group began facing financial difficulties around 2021 and commenced a court-supervised restructuring process known as a PKPU. A composition plan was approved by creditors and ratified by the Semarang Commercial Court through a Homologation Decision.
However, the Sritex Indonesian Entities subsequently failed to comply with the repayment schedules under the composition plan, following which a creditor filed a petition seeking annulment of the Homologation Decision. The Semarang Commercial Court annulled the Homologation Decision and as mandated by Indonesian law, declared the entities bankrupt. The decision was later affirmed by the Indonesian Supreme Court. These proceedings are subsequently referred to as the “Indonesian Bankruptcy Proceeding”.
The Court noted that the Sritex Indonesian Entities were also being investigated by Indonesian authorities for corruption, fraud and embezzlement. Several former personnel had been arrested in connection with alleged fraudulent loan disbursements and embezzlement of loan proceeds. Applicants 5-8 were Curators appointed in the Indonesian Bankruptcy Proceeding. In those proceedings, the Curators had been authorised to take “all necessary legal measures to enhance the bankruptcy estate in the Republic of Singapore”.
The present application’s purpose was to investigate the operations and finances of Golden Legacy Pte Ltd and Golden Mountain Textile and Trading Pte Ltd, collectively referred to as the “Sritex Singaporean Entities”. In 2016, 2017 and 2020, the Sritex Singaporean Entities and Sritex Indonesian Entities issued senior notes listed on the Singapore Exchange, with a total value of US$725 million. The Curators stated that they were unaware of how the proceeds of the notes had been used, whether the funds had flowed to the Sritex Indonesian Entities, or whether they had been held in Singapore.
The applicants sought recognition of the Indonesian Bankruptcy Proceeding as a foreign main proceeding under Article 17 of the Model Law. They also sought three categories of relief:
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Extended stay relief preventing enforcement of security over property situated in Singapore without leave of court or consent of the Curators;
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investigative relief enabling examination of witnesses, taking of evidence and obtaining information relating to the debtors’ property and affairs; and
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administrative relief empowering the Curators to administer and collect assets in Singapore.
Analysis, Law and Decision
A. Indonesian Bankruptcy Proceeding constituted a foreign main proceeding
The Court observed that the procedural requirements under Article 15 of the Model Law had been met and the application was accompanied by the relevant Indonesian court documents and translations.
The Court referred to Article 2(h) of the Model Law and the requirements identified in Ascentra Holdings, Inc v. SPGK Pte Ltd., [2023] 2 SLR 421, and held that the Indonesian Bankruptcy Proceeding was a “foreign proceeding”. The proceeding was conducted under Indonesian insolvency legislation, was collective in nature, subjected the property and affairs of the debtor companies to court supervision, and was aimed at liquidation. Further, the Curators were “foreign representatives” within the meaning of Article 2(i) of the Model Law.
Further, regarding whether Indonesia was the debtors’ centre of main interests (COMI), the Court noted that the registered offices of the Sritex Indonesian Entities were in Indonesia and that the companies were physically located, operated and managed from Indonesia. The fact that funds had been raised in Singapore did not displace the presumption under Article 16(3) that the registered office is the debtor’s COMI. Therefore, the Court found that the COMI of the Sritex Indonesian Entities was Indonesia, making the Indonesian Bankruptcy Proceeding a foreign main proceeding. As a result, the automatic reliefs under Article 20 of the Model Law applied.
B. Extended stay relief
The Court considered whether secured creditors should be restrained from enforcing security over the property of the Sritex Indonesian Entities situated in Singapore without leave of court or consent of the Curators.
The Court noted that although enforcement of security is ordinarily not stayed in liquidation because secured creditors stand outside the pari passu distribution process, Article 21(1) of the Model Law grants the Court broad powers to fashion appropriate relief. Referring to Re Armada Shipping SA and Re Transfield ER Cape Ltd, the Court observed that courts may stay the enforcement of security in appropriate cases, including within the context of foreign liquidation proceedings.
The Court held that it possessed the power to order a stay of enforcement of security upon recognition of foreign proceedings akin to liquidation. While such relief should not be the default approach, the Court considered it justified on the facts of the present case. The Court had regard to the investigations and arrests concerning alleged fraud, embezzlement and corruption within the Sritex Indonesian Entities and noted concerns that security may have been granted illegitimately, possibly in connection with the alleged wrongdoing. Coupled with the inability of the Curators to trace the proceeds of the notes, the Court considered it appropriate to require secured creditors to obtain leave of court or consent of the Curators prior to enforcing security.
The Court further held that the interests of affected parties were adequately protected because the requirement merely obliged a secured creditor to establish a prima facie case before obtaining leave to enforce its security. Accordingly, the extended stay relief was granted.
C. Investigative relief
The Court next considered the Curators’ request for general investigative powers concerning the affairs and records of the Sritex Indonesian Entities in Singapore. The applicants clarified that they were not seeking coercive disclosure or examination orders against specific persons but were instead seeking authority to conduct investigations and make inquiries.
The Court agreed with the applicants that the test formulated in Re Fullerton Capital Ltd [2024] SGHC 155 did not apply where foreign representatives sought only general investigative powers and not coercive orders directed at identified persons. The Court held that where general investigative relief is sought, the appropriate inquiry is found in the chapeau of Article 21(1), namely whether the relief is “necessary to protect the property of the debtor or the interests of the creditors” and whether it constitutes “appropriate relief”. The Court agreed that foreign representatives, like liquidators, are duty-bound to obtain as full a picture as possible of the debtor’s affairs and to maximise recoveries for creditors. Taking steps to facilitate those duties would therefore be necessary to protect the debtor’s property and the interests of creditors.
The Court observed that the Curators had been authorised in Indonesia to take all necessary legal measures to enhance the bankruptcy estate in Singapore and that the purpose of the relief was to determine what had happened to the notes and their proceeds. Therefore, the Court was satisfied that the Investigative Relief was necessary to protect the property of the Sritex Indonesian Entities and the interests of their creditors and granted the relief.
D. Administrative relief
The Court also considered the administrative relief sought under Article 21(1)(e) and the chapeau of Article 21(1). The Court held that allowing the Curators to administer, collect or liquidate the Sritex Indonesian Entities’ assets in Singapore constituted appropriate relief because such powers would facilitate the discharge of their duties and assist in maximising returns for creditors.
The Court agreed that the relief would facilitate investigations into the affairs of the Sritex Singaporean Entities and would not place the Curators in a position different from that of Singapore-appointed liquidators. However, the Court imposed a condition that assets or funds could not be distributed or repatriated out of Singapore without first obtaining leave of court. The condition was consistent with Singapore authority and was accepted by the applicants.
Conclusion
The Court recognised the Indonesian Bankruptcy Proceeding as a foreign main proceeding under the Model Law and granted the extended stay relief, investigative relief and administrative relief sought by the applicants. The Court ordered that any distribution or repatriation of assets from Singapore would require prior leave of court.
[Re PT Sri Rejeki Isman Tbk and others, [2026] SGHC(I) 16, decided on 26-08-2026]
Advocates who appeared in this case:
For the Applicants: Choo Zheng Xi, Chua Shi Jie, Shann Liew Zi Xuan and Rabin Kok (RCLT Law Corporation) (instructed), Lee Lieyong Sean and Lock Hui Xuan (Delta Law Corporation).
