Foreign liquidators involved in recovering funds from the multibillion-dollar 1Malaysia Development Berhad (1MDB) scandal have been barred from suing Standard Chartered Bank (Singapore) Limited and BSI Bank Limited over transactions predating 2018.
The ruling, delivered by Justice Aidan Xu on 24 September 2025 in the Singapore High Court, determined that Article 23(9) of the Insolvency, Restructuring and Dissolution Act (IRDA) 2018 explicitly prevents foreign liquidators from pursuing “avoidance claims” related to transactions entered into before the law’s enactment.
The liquidators representing Blackstone Asia Real Estate Partners Limited and Brazen Sky Limited—both in liquidation—sought court recognition to pursue claims against the two banks. These claims were tied to allegedly fraudulent transactions involving large sums of money transferred prior to 2018.
However, Justice Xu held that the statutory framework bars such actions from being initiated under the cross-border insolvency regime in Singapore, despite the allegations’ seriousness and potential links to the 1MDB scandal.
Judgment hinges on statutory cut-off date
The judgment consolidated two originating applications reflecting similar legal questions and parties.
In both cases, the liquidators had applied for standing to initiate avoidance proceedings under Singapore’s cross-border insolvency laws, enacted through the IRDA and aligned with the UNCITRAL Model Law.
The central issue was whether foreign representatives could rely on Article 21(1)(g) of the Singapore Model Law to seek relief, including standing to bring avoidance claims over transactions that took place before 23 May 2018, the date when the IRDA came into effect.
Justice Xu ruled unequivocally that they could not. Article 23(9) of the IRDA, which is unique to Singapore’s implementation of the Model Law, states that nothing in Article 23(1)—which grants foreign liquidators standing to bring claims—applies to transactions entered into before the legislation commenced.
Legal clarity prioritised over flexibility
In rejecting the applicants’ interpretation, the court emphasised that any legislative ambiguity must yield to Parliament’s express choices.
While the UNCITRAL Model Law promotes international cooperation in cross-border insolvency, Singapore’s adaptation intentionally limited retroactive application.
Justice Xu acknowledged previous cases where similar orders had been granted but clarified that those were either uncontested or not fully argued.
With the benefit of full submissions in the present case, the court concluded that the statutory bar is unambiguous and overrides the broad discretionary powers granted under Article 21.
“The court must give effect to what that law lays down,” Justice Xu stated, noting that Article 23(9) was deliberately enacted by Parliament to limit foreign representatives from reopening pre-2018 transactions.
Implications for recovery efforts
The outcome leaves liquidators of entities implicated in the 1MDB scandal with limited options in Singapore’s jurisdiction, particularly in regard to transactions with Standard Chartered and BSI Bank.
While the applicants may pursue traditional claims via local proceedings, such routes are more complex and lack the efficiency benefits offered by the cross-border regime under the Model Law.
The court further noted that separate legal proceedings remain ongoing, including HC/OC 314/2024, brought by Brazen Sky and 1MDB against BSI and certain bankers for dishonest assistance in relation to the same disputed transactions.
Broader legal considerations
Justice Xu dismissed the suggestion that Article 21(1)(g) could override the clear prohibition in Article 23(9). He affirmed that a harmonised international interpretation was not required, as Singapore’s version of the Model Law substantially diverges from the UNCITRAL text.
Academic commentary, including from the Annotated Guide to the Singapore Insolvency Legislation, was cited to support the principle that pre-IRDA transactions were intentionally excluded to protect legitimate expectations and prevent retroactive disruption.
Foreign jurisprudence, including in the UK and US, was found to be non-determinative due to differing statutory frameworks and national contexts.
Moving forward
Although the court acknowledged the tension between Singapore’s legislative framework and the wider spirit of international cooperation in insolvency, it underscored that changes to the legal position must come through Parliament, not judicial reinterpretation.
The ruling is expected to have a ripple effect on similar cross-border claims involving historical transactions, especially those arising from complex fraud cases like the 1MDB scandal.
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