This case arose from the 1Malaysia Development Bhd (1MDB) scandal, one of the largest financial frauds in history. Blackstone Asia Real Estate Partners Ltd (in liquidation) ("Blackstone") and Brazen Sky Ltd (in liquidation) ("Brazen Sky"), two of the offshore shell companies said to have been used in that scheme, were allegedly involved in transferring moneys misappropriated from 1MDB and SRC International Sdn Bhd ("SRC Malaysia"). Both remain in insolvent liquidation in the British Virgin Islands ("BVI"). The Court recorded that the alleged masterminds include Mr Low Taek Jho ("Jho Low") and Mr Mohammad Najib bin Tun Haji Abdul Razak, Malaysia's Prime Minister from 2009 to 2018. Najib has been in custody since August 2022 on his SRC International conviction, a 12-year sentence halved on a royal pardon in 2024; on 18 September 2026 he was granted a conditional pardon permitting him to serve the balance of that sentence, which runs to 23 August 2028, under house arrest subject to payment of a RM50 million fine. He was separately convicted in December 2025 in the 1MDB misappropriation proceedings and has appealed.[1]
Blackstone held an account with Standard Chartered Bank (Singapore) Ltd. That account was allegedly used to launder proceeds from two 1MDB bond issues and loans between December 2010 and February 2013. Brazen Sky held an account with BSI Bank Ltd, itself now in liquidation. That account was allegedly used to hold units in a fund that was fraudulently overvalued so as to conceal the misappropriation of part of 1MDB's investment in a joint venture with PetroSaudi International Ltd, and to launder the proceeds of a loan to 1MDB through a number of "fund cycles" that created the impression that 1MDB was liquidating the units. Those transactions occurred between September 2012 and November 2014.[2]
The same liquidators were appointed over both companies: Angela Barkhouse and Toni Shukla of Kroll. They had earlier obtained orders recognising the BVI liquidations as foreign main proceedings and themselves as the companies' foreign representatives under Singapore's cross-border insolvency framework. They then sought orders granting them standing to bring claims for fraudulent and wrongful trading, under ss 238 and 239 of the IRDA and the equivalent provisions of the Companies Act (Cap 50, 2006 Rev Ed), against the two banks and five former BSI employees.[3]
The Legal Framework
The UNCITRAL Model Law on Cross-Border Insolvency 1997 has the force of law in Singapore under s 252(1) read with the Third Schedule of the Insolvency, Restructuring and Dissolution Act 2018 (2020 Rev Ed) ("IRDA"). The IRDA, and with it the Singapore Model Law, came into force on 30 July 2020.
Two provisions of Singapore's Model Law (the SG Model Law) were central to this case:
Article 23(1) gives a recognised foreign representative automatic standing to bring certain claims under Singapore insolvency law, including fraudulent trading (s. 238 IRDA) and wrongful trading (s. 239 IRDA), without needing to commence separate Singapore winding-up proceedings.
Article 23(9) qualifies that right. It provides that "[n]othing in paragraph 1 of this Article applies in respect of any preference given, floating charge created, alienation, assignment made or other transaction entered into before the date on which this Law comes into force".
Article 21(1) is a broader provision empowering the court to grant a foreign representative "any appropriate relief" that is "necessary to protect the property of the debtor or the interests of the creditors". The limb actually relied on was Article 21(1)(g), which permits the court to grant any additional relief available to an insolvency officeholder appointed in a domestic proceeding.
The key question: could the liquidators use Article 21(1)(g) as an alternative gateway to the same statutory causes of action, bypassing the restriction in Article 23(9)?
Arguments
The Liquidators argued that Article 23(9) only limits Article 23(1). Since they were not relying on Article 23(1), but instead on Article 21(1) the restriction did not apply. They contended the court retained a separate discretion under Article 21(1) to grant standing, subject to a light-touch check that the claims disclosed a prima facie case.[4]
The Banks argued that Article 23 is a self-contained regime exclusively governing a foreign representative's access to avoidance and misconduct provisions. Article 21(1) is a general provision and cannot override a specific one. Allowing the liquidators to use Article 21(1) as a workaround would render Article 23(9) pointless, what is "shut out at the front door" of Article 23(1) cannot be allowed back in through the back door of Article 21(1).[5]
The Court's Decision
The Court of Appeal (Sundaresh Menon CJ, Ang Cheng Hock JCA and Kannan Ramesh JAD) dismissed both appeals on 11 March 2026, in a judgment delivered by Menon CJ.
On the text and structure of the law, the Court held that the liquidators' argument rested on a "false premise".[6] Article 23, taken as a whole, is a carefully constructed, self-contained regime dealing specifically with a foreign representative's standing to invoke avoidance and misconduct provisions. Article 21(1), despite its broad language, was never intended to cover that same ground.[7]
The Court applied two established principles of statutory interpretation. First, Parliament does not legislate in vain, accepting the liquidators' argument would render virtually the entirety of Article 23 meaningless.[8] Second, a specific provision overrides a general one covering the same situation.
On legislative purpose, the Court rejected the liquidators' argument that the law should be read broadly to promote efficient cross-border insolvency proceedings. The specific purpose of Article 23(9), preventing retrospective unfairness, must not be steamrolled by the statute's general goals.[9]
On retrospectivity, the Court emphasised that parties transacting with Blackstone and Brazen Sky between 2010 and 2014 could not have anticipated exposure to claims brought under a legal framework that did not yet exist.[10] The unfairness was especially palpable for wrongful trading: the respondents could not possibly have incurred liability under the provision in force at the time, s 340(2) of the Companies Act, but could potentially be liable under the broader iteration of wrongful trading enacted when the provision was migrated into the IRDA. Allowing the claims would in substance bring forward the commencement of the IRDA and of its fraudulent and wrongful trading provisions by more than six or seven years: the IRDA came into force around six years after the last transaction on the Brazen Sky account and more than seven years after the last transaction on the Blackstone account. The Court held it "implausible" that Parliament intended that result.[11]
The Court drew support from two UK Insolvency Service consultation papers published ahead of the adoption of the Model Law in Great Britain by the Cross-Border Insolvency Regulations 2006 (SI 2006 No 1030), whose Article 23(9) appears to be the only analogue to the Singapore provision in any Model Law jurisdiction. The first paper explained that the provision was transitional and existed "to avoid transactions, which were not vulnerable at the point they were made, subsequently being made liable to attack by a foreign representative"; the second rejected calls for its deletion on the same footing.[12]
Significance
This decision clarifies that Article 23(9) is an absolute bar, not merely a limit on one route to standing. Foreign representatives cannot circumvent it by relying on Article 21(1) instead of Article 23(1). The ruling also underscores that courts will resist interpreting insolvency legislation in ways that impose liabilities on parties that could not have been foreseen when the relevant transactions occurred. On costs, the appellants were ordered to pay Standard Chartered and BSI $25,000 each (all in), while the former bankers received heavily discounted awards: the Court found their submissions to be of little assistance and observed that separate representation does not carry an entitlement to recover all the costs it generates.[13]
The practical reach of the decision is narrower than it may first appear, because the bar operates on the Model Law route to standing rather than on the underlying causes of action. Following the dismissal, the companies applied to be wound up in Singapore in their own right, so that Singapore-appointed liquidators, rather than recognised foreign representatives, could pursue the same claims under ss 238 and 239 of the IRDA. In Re Alsen Chance Holdings Ltd (in liquidation) (Standard Chartered Bank (Singapore) Ltd, non-party) and other matters [2026] SGHC 61, the General Division held that the banks had no standing to participate in those applications, and winding-up orders have since been reported as granted.[14] Advisers to foreign liquidators looking at pre-August 2020 transactions should therefore treat a domestic winding up, not recognition alone, as the route to the avoidance and misconduct provisions.
paras 2, 6 ↑
para 7 ↑
paras 2, 5, 8 ↑
paras 15-16 ↑
paras 17-18, 43 ↑
para 36 ↑
paras 37-39 ↑
paras 37-38 ↑
paras 50-56 ↑
paras 61, 68-69 ↑
paras 63, 76, 78-79 ↑
paras 71-72 ↑
paras 87-93; the Banks were awarded $25,000 each (all in) and the Bankers' claims were discounted at paras 92-93. ↑
Re Alsen Chance Holdings Ltd (in liquidation) (Standard Chartered Bank (Singapore) Ltd, non-party) and other matters [2026] SGHC 61 at [4]-[5], [37]; winding-up orders reported as granted in May 2026. ↑