Senior Singaporean maritime lawyers are expecting the volume of insolvency filings in the shipping and oil-and-gas sectors to increase as markets show no signs of improvement. “Shipping, together with the oil and gas sector, is becoming most prominent in insolvencies, with everyone from financiers, to owners, to suppliers getting involved,” said Felicia Tan, director of Incisive Law, the Singaporean alliance partner of international shipping law firm Ince & Co. Tan is one of several new appointments announced last week by Ince Law Alliance in Singapore and which returned to full strength the senior legal team of Incisive Law. The latter had seen its ranks decimated in October last year when key lawyers left for opportunities elsewhere.


Tan, who joined from Singaporean law firm Allen & Gledhill in July, specialises in dispute litigation and arbitration. Incisive is currently representing clients in the Swiber Holdings and Hanjin Shipping insolvency cases. She expects to be kept very busy in the foreseeable future. “There is quite a lot going on beneath the surface and everyone is worried. There will be more insolvency filings because the supply chain is so interconnected. I have heard that some creditors are facing insolvency because of long, drawn out procedures. Not every creditor has the liquidity to last the duration of an insolvency proceeding. We might face a situation where liquidators are dealing with other liquidators ,” she explained.


She notes that recent insolvency cases – Hanjin, Swiber and even OW Bunker – have become more complicated because of the increasingly complex way the industry is structured and the multiple jurisdictions involved. “Everyone from financier to insurers and everyone else down the line is involved, everyone is worried. Various contracts have different litigation clauses, so how do you litigate without interfering downstream and becoming personally liable. If, for example, a financier has the right to step in and take over a claim, what happens if they are not successful? Are they then responsible?” she said.
Tan suggests to her clients that they pay particular attention to contractual set-offs and debt assignments, and put in termination clauses so that they can cut their losses early. “The market has always been structured around trust and large credit lines. But now you need to calibrate those with market conditions,” she suggested. Tan also warns that the industry should be prepared for more catastrophes. “This is not likely to stop at Swiber and Hanjin ,” she said.


Singapore has been fine-tuning its court insolvency protection laws in the ongoing quest to turn the country into an international dispute resolution centre. Added transparency Tan points to the High Court’s recent handling of the Swiber judicial management application as an example of how the court is demanding that judicial managers provide more details to creditors on what is taking place. Swiber’s judicial manager has been ordered to provide the court with update reports every six weeks. The judicial manager is also required to draw up a cost schedule detailing a timetable of what will be done and how much it will cost. “This is a good for preventing costs from getting out of control,” she said.


In the Hanjin case, the High Court has granted an interim stay against claims being made against the company in Singapore. Singapore still does not have cross-border automatic recognition of foreign moratoriums granted, so the stay was only granted on application by Hanjin. Singapore is taking steps to improve the situation. The country this month has hosted a judiciary conference where 13 international specialist insolvency judges gathered to discuss how their court systems can work towards a universal approach to insolvency. In addition, Singapore continues to promote alternative non-court-based dispute resolution via mediation and arbitration.


Last week, the Ince Law Alliance revealed that it had recruited a number of prominent Singaporean lawyers to return to full strength and broaden the range of expertise at the firm. Along with Tan, Moses Lin joined the team from Hill Dickinson. Lin is a commercial litigation and arbitration lawyer and is described as being experienced in handling a broad spectrum of commercial disputes. His focus is primarily on marine, commodities and international trade. Also joining the team are two new junior associates, Justin Seet and Samantha Ch’ng, who will offer support on a broad spectrum of non-contentious matters. At the same time, Edgar Chin, who joined Incisive in 2014, has been appointed joint managing director alongside Bill Ricquier. Chin, a former claims director at an International Group protection-and-indemnity (P&I) club, is said to have extensive and in-depth legal and practical experience in the shipping and P&I industry.