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A Matter of Commercial Judgment – Challenging the Decisions of Judicial Managers under Singapore Law: Yihua Lifestyle Technology Co, Ltd v HTL International Holdings Pte Ltd [2021] 2 SLR 11 [case comment]

Danny Ong, Aaron Yoong & Louis Lau Yi Hang

[2022] SAL Prac 20

This note comments on the recent Singapore Court of Appeal’s decision in Yihua Lifestyle Technology Co, Lloyd v HTL International Holdings Pte Ltd [2021] 2 SLR 1141, where the Court of Appeal affirmed the applicable test for determining whether a judicial manager’s exercise of discretion may be challenged on the basis of “unfairness” under s 227R of the Companies Act (Cap 50, 2006 Rev Ed) (now s 115 of the Insolvency, Restructuring and Dissolution Act (Act 40 of 2018)). This note observes that the decision presented a welcome clarification in this area on the law of insolvency. In addition, this note compares this decision with the UK administration regime to understand the legal basis for bringing a challenge against the judicial managers’ exercise of discretion premised on “unfairness”. This note then concludes the discussion by highlighting two issues that the Singapore courts may wish to further explore, should the occasion arise, namely: (a) the party that bears the burden of proof; and (b) the threshold for bringing a successful challenge.