Sivasankaran v BMIC Ltd & Ors (MA 310/2015) [2016] SCSC 8 (18 January 2016)

Sivasankaran v BMIC Ltd & Ors (MA 310/2015) [2016] SCSC 8 (18 January 2016)

The court found that the composition was accepted by the majority of creditors in accordance with the law, the terms were reasonable, fair, and proportionate to the bankrupt's financial status, and none of the grounds for refusal under section 82(3) were established. BMIC's objections were speculative and unsupported by evidence. Section 83 was inapplicable as there was no allegation or evidence of fraud. The Official Receiver's remuneration was fixed at US$400,000 as fair and reasonable. The court approved the composition, cancelled the bankruptcy order, and directed execution of the composition.

Citation
[2016] SCSC 8
Parties
Applicant/bankrupt: Chinnakannan Sivasankaran; 1st Respondent/objecting Creditor: BMIC Ltd; 2nd Respondent/creditor: Power Trade Capital Ltd; 3rd Respondent/creditor: Broadcourt Investments Ltd; 4th Respondent/creditor: Standard Chartered Bank (Singapore); 5th Respondent/creditor: Reed Smith LLP (UK); 6th Respondent/creditor: Chinnadurai S. Pillai; 7th Respondent/official Receiver: Bernard Pool (Official Receiver)
Court
Supreme Court
Jurisdiction
Seychelles
Judgment Date
18 January 2016
Case Number
MA 310/2015
Procedural Posture
Bankruptcy/insolvency / Ruling on Application for Approval of Post Bankruptcy Composition
Outcome
Application for approval of post-bankruptcy composition allowed; objection by BMIC dismissed.
Legal Topics
Post Bankruptcy Composition, Approval of Composition, Objection by Creditor, Official Receiver's Remuneration, Discharge of Bankruptcy
Source Language
English
Insolvency Bankruptcy Post Bankruptcy Composition Approval of Composition Objection by Creditor Official Receiver's Remuneration Discharge of Bankruptcy

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Parties

Chinnakannan Sivasankaran

Applicant/bankrupt

BMIC Ltd

1st Respondent/objecting Creditor

Power Trade Capital Ltd

2nd Respondent/creditor

Broadcourt Investments Ltd

3rd Respondent/creditor

Standard Chartered Bank (Singapore)

4th Respondent/creditor

Reed Smith LLP (UK)

5th Respondent/creditor

Chinnadurai S. Pillai

6th Respondent/creditor

Bernard Pool (Official Receiver)

7th Respondent/official Receiver

Procedural Posture

Bankruptcy/insolvency / Ruling on Application for Approval of Post Bankruptcy Composition

Legal Issues

  1. 1 Whether the post-bankruptcy composition proposed by the bankrupt and accepted by the majority of creditors should be approved by the court under the Insolvency Act 2013
  2. 2 Whether the objection by BMIC Ltd as a dissenting creditor is valid under section 83 of the Act
  3. 3 Whether the terms of the composition are reasonable and calculated to benefit all creditors

Ratio Decidendi

The court found that the composition was accepted by the majority of creditors in accordance with the law, the terms were reasonable, fair, and proportionate to the bankrupt's financial status, and none of the grounds for refusal under section 82(3) were established. BMIC's objections were speculative and unsupported by evidence. Section 83 was inapplicable as there was no allegation or evidence of fraud. The Official Receiver's remuneration was fixed at US$400,000 as fair and reasonable. The court approved the composition, cancelled the bankruptcy order, and directed execution of the composition.

Court Disposition

Application for approval of post-bankruptcy composition allowed; objection by BMIC dismissed.

Orders

  • Objection of BMIC rejected in entirety.
  • Post-bankruptcy composition as accepted by majority of creditors on 8 August 2015 approved and binding on all creditors.