Legal Settlement Efforts That Should Be Done by Indonesia and

Singapore in Completing Debt by Curators to Creditors through

Bankruptcy

Megawaty and Elvira Fitriyani Pakpahan

Postgraduate School of Law Master Program Prima Indonesia University, Medan, North Sumatra

Keywords: Debt settlement, bankruptcy, curator.

Abstract: In Indonesia, in its bankruptcy law, there are legal remedies against bankruptcy decisions in the form of

cassations or reconsiderations that are decided by the Supreme Court of the Republic of Indonesia. In the

bankruptcy law in Singapore there is no legal remedy, this is because the bankruptcy filing is filed with a

federal court, the federal court is the highest court in the hierarchy of the judicial system in Singapore. The

research method used was normative and the type of research was t-juridical empirical. Source of primary,

secondary and tertiary legal materials. The collection technique is in the form of a library (library research).

The data analysis used a qualitative approach. Legal settlement efforts that must be made by Indonesia and

Singapore in settling debts by curators to creditors through bankruptcy are related to this objective, in a PKPU

it is possible to make a peace, for example by conducting debt restructuring, both for all debt and part of the

debt, it can be said that peace is one of PKPU. If within the delay (time) the debtor fails to reach peace, the

peace is canceled, the bankruptcy provisions will apply. Efforts to settle debts with bankruptcy result in all

the assets of the bankruptcy being confiscated by the court, and the person concerned cannot manage his

assets because they have been taken care of by a curator until the bankruptcy process ends, including settling

all debts. Meanwhile, Singapore's efforts to resolve it in the form of a court can order a refund or cancel an

undervale transaction conducted by a third party with a bankrupt debtor within five years.

1 INTRODUCTION

In the business world, the relationship between the

debt and credit agreement is not a strange thing, but

if the debtor is unable to return the loan to the creditor,

this is where the role of bankruptcy law plays. The

role and international presence is very relevant in the

case of bankruptcy if the debt agreement includes

foreign parties (Huala Adolf: 2009).

In Indonesia, although other evidence can be

provided, as long as the evidence is not presented in

court, it will not be counted. "It is so rigorous that if

the simple evidence with suspicion is changed to an

insolvency test, it will be difficult for us to say

insolvency without being able to prove it, it is certain

that the petition will be rejected by the assembly.

Meanwhile, the panel of judges in Indonesia clearly

cannot force debtors to submit financial reports ”.

Even Singapore, which recently carried out reforms

to improve their Bankruptcy Law on May 23 2017, in

their judicial arrangement no longer mentions debtors

who are unable to pay debts, but debtors who are

deemed unable to pay debts. This means that

Singapore has just adopted the concept of suspicion

that we have applied in Article 2 paragraph (1) of the

Bankruptcy and PKPU Law, so why should other

common law countries join in with an insolvency test

whose system does not match the Indonesian state.

In Indonesia, in its bankruptcy law, there are legal

remedies against bankruptcy decisions in the form of

cassations or reconsiderations that are decided by the

Supreme Court of the Republic of Indonesia. In the

bankruptcy law in Singapore there is no legal remedy,

this is because the bankruptcy filing is filed with a

federal court, the federal court is the highest court in

the hierarchy of the judicial system in Singapore.

Singapore is one country that has a common low

legal system which was developed from English law.

Especially in the regulation of Singapore business law

and its implementation, the law in Singapore is

heavily influenced by other common low countries

such as Australia, Kenada and Malaysia, so that it has

similarities in these legal arrangements. Meanwhile,

486

Megawaty, . and Pakpahan, E.

Legal Settlement Efforts That Should Be Done by Indonesia and Singapore in Completing Debt by Curators to Creditors through Bankruptcy.

DOI: 10.5220/0010326000003051

In Proceedings of the International Conference on Culture Heritage, Education, Sustainable Tourism, and Innovation Technologies (CESIT 2020), pages 486-493

ISBN: 978-989-758-501-2

related to bankruptcy legal arrangements. Singapore

is adapting a mix of British capability legal

arrangements.

According to Ricardo Simanjuntak (2011) states

that the provisions of the Singapore bankruptcy law,

where the element of the debtor's inability to pay his

debts does not have to be proven, but it is sufficient

by assuming not able to pay. This means that the

Singapore High Court can issue bankruptcy based on

the debtor having a debt that is due and can be

collected, even though he has been reprimanded

(statury demand) to pay off his debt, but the debtor

does not pay it. With this fact it is assumed that they

are unable to pay. Statutory demand is a measure of

bankruptcy in Singapore.

In case of bankruptcy, Singapore already has its

laws. The bankruptcy laws are also modeled from the

UK bankruptcy laws which distinguish individual

bankruptcy and corporate bankruptcy. Individual

bankruptcy is regulated in the Bankruptcy Act (Cap

20, 2009 Rev Ed) and corporate bankruptcy is

regulated in the Companies Act (Cap 50, 2006 Rev

Ed).

According to Shubhan (2014), it is explained that

Singapore has its arrangements in the Bankruptcy Act

Sections 151 and 152. The contents of this section

basically acknowledge and implement bankruptcy

decisions of foreign courts and their curators as long

as there is a mutual relationship between Singapore

and other countries. In other words, Singapore is

willing to recognize and enforce bankruptcy

decisions by foreign courts provided that the country

also provides the same treatment. Until now, only

Malaysia has provided a mutual agreement with

Singapore.

The limitation on the nominal value of the debt as

a basis for filing a bankruptcy application is intended

to limit bankruptcy applications for creditors who

have a small amount of debt (below the minimum)

and limit the scale of bankruptcy handling. In

addition, this limitation is intended as a form of

protection for the majority creditors from the powers

of minority creditors.

The authority to investigate and decide on

bankruptcy disputes is granted by the Bankruptcy Act

to the High Court in Singapore for all cross-border

capability cases registered by creditors intending to

be bankrupt.

The coverage of bankruptcy assets according to

the Singapore bankruptcy law is the same as the scope

of bankruptcy assets according to the Indonesian

bankruptcy law, where under the Bankruptcy Law the

debtor's bankruptcy property also includes all debtor

assets both within the territory of Indonesia and

outside the territory of Indonesia. So that the

Bankruptcy Act between Indonesia and Singapore

also experiences the principle of universality.

However, in practice these rights are contrary to the

principle of jurisdiction and are difficult to

implement, so that their implementation is territorial

in nature.

Andrew Chee Yin Chan (2014) states that as a

rapidly developing country in the business world,

there are several problems faced by the Singapore

Bankruptcy Act 1995 regarding the issue of cross-

border bankruptcy, namely (1) The lack of legal

arrangements regarding foreign legal recognition and

Singapore legal recognition in the country. others in

cross-border bankruptcy cases; (2) Limited authority

of the curator in managing the assets of bankrupt

debtors outside the jurisdiction of Singapore; and (3)

The lack of cooperation or communication between

Singapore Courts and foreign courts in resolving

cross-border bankruptcy cases. Despite its

limitations, Singapore still has not adopted the

UNCITRAL Model Law in its bankruptcy

regulations. Thus, a foreign bankruptcy decision is

only recognized in Singapore if there is an

international agreement with Singapore.

Phoebe Hathorn (2013), explains that in

Singapore, the authority to examine and decide on

bankruptcy disputes lies with the High Court in

Singapore for all cross-border bankruptcy cases

registered by creditors against debtors who are about

to be bankrupt. Basically, Singapore's bankruptcy law

does not differentiate between local creditors and

foreign creditors so that both are entitled to register a

bankruptcy application at the Singapore High Court.

The authority of the Singapore High Court over

the debtor's assets depends on the domicile of the

bankrupt debtor itself. In the case of a local debtor,

who is Singaporean citizen and domiciled in

Singapore, the authority of the Court according to the

Singapore bankruptcy law includes all assets held in

his possession, wherever the assets are located.

Meanwhile, in the event that the debtor is a foreign

debtor who is domiciled and conducts business

activities in Singapore, the authority of the Singapore

Court according to the Singapore bankruptcy law

only covers a number of the assets of the bankrupt

debtor located within the territory of Singapore.

However, the authority of the Singapore High Court

and the legal consequences arising from the

bankruptcy decision of the Singapore High Court can

only be recognized in the jurisdiction of Malaysia,

with the existence of the Mutual Recognition and

Mutual Enforcement Agreement of Republic of

Singapore and Malaysia. Based on the bilateral

Legal Settlement Efforts That Should Be Done by Indonesia and Singapore in Completing Debt by Curators to Creditors through Bankruptcy

487

agreement in the case of cross-border bankruptcy, the

authority of the Singapore Court on a bankruptcy

decision which has been stipulated is recognized in

Malaysia as long as it does not conflict with HPI

Malaysia and the conflict of law principles.

2 RESEARCH METHOD

This type of research is conducted by juridical

empirical. According to Bambang Sunggono (2005)

states that juridical empirical research is legal

research which aims to obtain empirical knowledge

about the relationship between law and society, which

is carried out by approaching the problem under study

with the real nature of the law or in accordance with

real life in society and linked to the analysis of

statutory regulations. Source of legal materials in the

form of primary, secondary and tertiary legal

materials. In conducting this writing, the research

conducted by the author is library research (library

research). The research conducted by the author in

this study is included in legal research normative.

3 RESEARCH RESULT

3.1 Bankruptcy Law Settlement

Conducted by Indonesia

According to Anton Suyatno (2012), basically every

debt must be paid. For debts that are due, the

execution can be carried out at the request of creditors

through the bankruptcy procedure. A peace decision

in PKPU is mainly made with the intention of ending

a debt settlement dispute between the debtor and its

creditors. When viewed from the substance (content)

of the peace agreement, basically the agreement

contains the obligations of the debtor. The

implementation of the contents of the peace results in

the settlement of debtors' debts against their creditors

and the debtors are avoided from bankruptcy

decisions.

Tuti Rastuti, Gandhi Pharmacista and Tisni

Santika (2018), explained that one of the objectives

of the PKPU decision was to provide opportunities

for parties to settle debts between them. In relation to

this objective, in a PKPU it is possible for a peace to

be carried out, for example by conducting debt

restructuring, both for all debts and part of the debt, it

can be said that peace is one of PKPU.

According to I Wayan Wesna Astara (2018), said

that in the bankruptcy process the debtor is given the

opportunity to settle debts through Postponement of

Debt Payment Obligations (PKPU). If within the

delay (time) the debtor fails to reach peace, the peace

is canceled, the bankruptcy provisions will apply.

The bankrupt debtor has the right to offer a plan

of conciliation (accord) to his creditors. However, if

the bankrupt debtor submits a reconciliation plan, the

deadline is no later than eight days before the meeting

of accounts receivable matching shall be made

available at the court registry so that it can be seen

free of charge by everyone concerned. The peace plan

must be discussed and a decision will be made

immediately after completion of matching of

accounts receivable. This peace plan is accepted if it

is approved in a creditor meeting by more than 1/2 the

number of concurrent creditors present at the meeting

and their rights are recognized or temporarily

recognized, representing at least 2/3 of the total

concurrent receivables recognized or temporarily

recognized by creditors. Concurrent or proxies

present at the meeting.

Adegbemi Babatunde Onakoya, Ayooluwa

Eunice Olotu (2017), the bankruptcy problem as a

distribution dilemma involves the apportionment of a

given amount of inadequate resources belonging to an

indebted entity among claimholders. Two of the

world’s major religions – Christianity and Islam

recognise the possible inability by individuals to meet

contracted obligations and prescribed panacea. The

bankruptcy laws enacted modern states provided

guidelines for addressing the bankruptcy problem and

the rights of stakeholders (both debtors and non-

debtors).

Bills that have been submitted must be compared

by the management with records and reports held by

the debtor. If the management has objections to the

amount of debt submitted by the creditor,

negotiations must be held with the creditor concerned

and the creditor is asked to submit documents that

have not been received by the management and ask

the creditor to show all original records and evidence.

G. Stanley Joslin (2016), This would be a step in

the direction of the simplification and conciseness

needed in an over-all appraisal of the insolvency

problem. Although a generalized change in the

insolvency definition could not be made without a

careful analysis to ascertain its effect upon the many

points of reference in the act, an over-all shift to the

concept of inability insolvency and the

discontinuance of the use of the balance insolvency

concept, except in special areas, would be desirable.

Inability insolvency can be more quickly and easily

established since it is free from the difficult and time

consuming asset and liability computations. This

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increased efficiency would prevent the rapid

deterioration of the position of the bankrupt, which is

likely to occur during a slow and difficult

determination of solvency.

According to Gatot Supramono (2013), it is

explained that Article 222 paragraph (2) and

paragraph (3) UUKPKPU, parties who can submit a

peace agreement are only debtors. Thus, it is only the

debtor who drafts or draws up the peace agreement

and the creditors are left to assess whether the peace

agreement is feasible and acceptable or unacceptable,

beneficial or detrimental, so that the creditors who

decide will accept or reject it. The Commercial Court

only ratifies or confirms the results of the agreement

between debtors and creditors regarding the peace

agreement. The peace agreement in the debtor's

PKPU can be in the form of debt restructuring,

followed by restructuring, without restructuring or

company restructuring. Settlement of debts with

bankruptcy results in all the assets of the bankruptcy

being confiscated by the court, and the person

concerned cannot manage his assets because it has

been taken care of by a curator until the bankruptcy

process ends, including settling all of his debts.

Stuart C. Gilson (2000), The investigates changes

in corporate ownership and control in firms that

default on their debt. For a sample of 111 publicly

traded firms that either went bankrupt or privately

restructured their debt, I find evidence consistent with

a shift in control over corporate resources from

incumbent management and the board of directors

towards nonmanagement blockholders and creditors.

On average, only 46% of incumbent directors and

43% of CEOs remain with their firms at the

conclusion of the bankruptcy or debt restructuring.

Directors who resign from financially distressed

firms subsequently serve on fewer boards of other

companies. Over the period that firms are financially

distressed, the percentage of common stock owned by

blockholders and creditors rises. Bank lenders

sometimes place their representatives on the board

directly. Banks gain additional control over firms’

investment and financing policies through restrictive

covenants in restructured bank loans. Collectively,

these results suggest that corporate default engenders

significant changes in the ownership of firms’

residual claims and in the allocation of rights to

manage corporate resources.

3.2 Bankruptcy Law Settlement

Conducted by Singapore

In Singapore, the new legislation is broad and

flexible. The order of stays may be made on the terms

and creditors may also request a court order to enforce

a stay or modify its scope. In Singapore when the

courts exercise new powers. Guidance can also be

taken from the UNCITRAL Legislative Guide on

Bankruptcy which implies that during the stay, secure

creditors are entitled to hedging assets that have a

security interest with which appropriate protective

measures include cash payments by real debtors,

provisions of additional security interests, or other

means as determined by the court.

WEE Meng Seng (2011), Singapore’s

international insolvency law is underdeveloped and

out of line with recent international developments.2

The main reason for this unsatisfactory state of affairs

is the existence of s 377(3)(c) of the Companies Act.3

It ring-fences the Singaporean assets of a foreign

company that is registered under the Act to pay the

debts and liabilities incurred in Singapore by the

foreign company before the balance, if any, is

transmitted to the liquidator of the foreign company

for the place where it was formed or incorporated.

This is a territorial approach to an international

insolvency that is contrary to the recent emphasis on

co-operation and co-ordination in the measures

adopted by various countries to reform their

international insolvency laws. Singapore has not

adopted any of these measures. Just as the domestic

insolvency law is part of the package of commercial

and corporate laws affecting a country’s economic

competitiveness, so is its international insolvency

law. Our dependence on trade with and investments

in or from other countries to generate growth and the

close integration of our economy in the global

economy mean that we should be well prepared to

cope with any international insolvency that may arise.

There is an urgent need to modernise our international

insolvency law.

Minjee Kim (2019), The Singapore Companies

(Amendment) Act 2017 introduced the UNCITRAL

Model Law on Cross Border Insolvency into

Singapore law. It facilitated the recognition of cross-

border insolvency processes in Singapore and

introduced new legislative tools to rescue distressed

companies. This article analyses specific strengths

and limits of the Singaporean cross-border insolvency

and debt restructuring reform by reflecting on how

the Hanjin Shipping Co Ltd cross-border insolvency

case might have been dealt with under Singapore’s

new framework. The article suggests that while cross-

border insolvency reform might have aided Hanjin

Shipping through easier recognition of a foreign

insolvency proceeding and enhanced cross-border

assistance, debt restructuring law reform may not

have been very useful for the company from a

Legal Settlement Efforts That Should Be Done by Indonesia and Singapore in Completing Debt by Curators to Creditors through Bankruptcy

489

practical perspective. Hanjin Shipping was already

suffering from a large amount of debt, and a

Singapore debt restructuring scheme may not have

been recognised by other foreign courts. The findings

provide insights into the ways that the limitations of

debt restructuring law reform may be addressed,

including enhancing cross-border judicial

cooperation and reforming a secondary funding

market in Singapore.

Wai Yee WAN (2018) should note that in

Singapore there are special provisions for debtors for

errors during the period of stay. A creditor may also

place orders that prevent a debtor from: (i) disposing

of assets other than in good faith and in the ordinary

course of business; (ii) engaging in behavior that

materially harms creditors or significantly reduces

creditors' assets; or (iii) change the shareholder

composition of the debtor company.

Prior to bankruptcy adjudication, foreign creditors

in Singapore could find protection in granting Mareva

orders against domestic debtors. Mareva's order is

practical assistance only for foreign lenders seeking

law enforcement of their claims prior to a statement

insolvency. While such an order would not improve

the plaintiff's Priority over other creditors. That will

keep offenders from removing any assets from the

jurisdiction they are in. The order is not, however, the

means by which a plaintiff seeks to enforce his claim

can bring himself under the jurisdiction of the

Singapore courts when there is no cause for

substantive action within that jurisdiction.

WEE Meng Seng (2011), When considering s

377(3) (c), it is easy to be misled into thinking that the

provision favours Singaporean creditors (ie,

Singapore incorporated companies or Singapore

citizens) over foreign creditors. That was probably

the case when the provision was initially enacted in

1967, as explained above, even though the basis for

preferential treatment is not based on nationality.

Since then the structure of our economy has changed

dramatically. Technological advances, in particular

electronic modes of communication, have also altered

the way businesses are conducted. A debt may be

incurred in Singapore vis-à-vis a foreigner without

the foreigner being in Singapore. In practice, the

beneficiaries of s 377(3)(c) today are as likely to be

Singaporean creditors as foreign creditors. A similar

point was made by Woo J in RBG Resources plc v

Credit Lyonnais.120 He emphasised that s 340(3)(c)

did not apply to all creditors in Singapore and

Malaysia but to debts and liabilities incurred in

Singapore. He accordingly rejected counsel’s

argument that the ringfencing was meant to protect

creditors in Singapore and Malaysia dealing with

companies operating in those countries.

Tay, Yong Seng, Chan, Jonathan Tuan San

(2016), When businesses fail, it is not unheard of for

businesspersons to abscond from the jurisdiction or to

hide behind corporate vehicles, leaving debts

unsatisfied. This article is concerned with the reach of

Singapore's bankruptcy courts over the "absconding

debtor", a person who deliberately keeps out of

Singapore to avoid his creditors. The Singapore

bankruptcy courts have not had much opportunity to

deal with the absconding debtor. On the other hand,

the English, Hong Kong, and Australian courts have

interpreted their own bankruptcy jurisdiction

provisions widely to address the mischief of the

absconding debtors. This article will argue that their

approach is consistent with our own bankruptcy

legislation and may be considered by the Singapore

courts in dealing with the absconding debtor.

Kelley Bryan and Howard Rubin (2018), The

Singapore BA gives the court in its bankruptcy

jurisdiction a broad discretion and a virtually

unfettered power to do real justice in the

circumstances of any particular case. Parliament

expressly gave the court far-reaching powers because

it recognized that the discharge of first-time

bankrupts is a desirable goal, and it therefore sought

to arm the courts with the tools to facilitate

discharges. The discharge of a first-time bankrupt is

refused only in the rarest and most exceptional of

cases. At the discharge hearing, the Official Assignee

opposed the discharge but made no allegation of

misconduct against Mr. Jeyaretnam. Therefore, it was

open to the court to grant Mr. Jeyaretnam an absolute

discharge. Even if the court was not comfortable with

granting an absolute discharge, it had the power to

grant a conditional discharge on any terms it saw fit.

Mr. Jeyaretnam has demonstrated his readiness and

ability to pay his creditors up to 25% of the debt.

While the creditors opposed his discharge, they did

not file affidavits or adduce other evidence as to why

his offer of payment was unacceptable. Mr.

Jeyaretnam also invited the High Court to fix an

alternative sum if the court was of the view that his

offer was inadequate. He has consistently indicated

his willingness to cooperate with the Official

Assignee and with the court. The court could and

should have exercised its discretion to grant the

discharge, either absolutely or on conditions. A

conditional discharge would have allowed the court

to address any residual concerns about fairness to the

creditors. An outright refusal of a discharge for a first-

time bankrupt is never warranted when less intrusive

measures are available.

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Mark The closure procedure may be initiated by a

court, by a company in voluntary proceedings

initiated by a resolution at a general meeting, or by

creditors under court supervision. Initiated by a trial

court begins with the submission of a petition by

interested parties. Courts control closures under this

system, appoint Authorized Recipients as temporary

liquidators, and may appoint inspection committees.

On the other hand, a company-initiated bankruptcy is

controlled by a member who appoints a liquidator.

There were no creditors or inspection committee

meetings. However, creditor rights under voluntary

closure are largely similar to those of creditors in the

closure rules, and mandatory bankruptcy evidence

governing and debt priority apply equally to both

situations.

Shon Gadgil (2019), the reason for selecting the

comparison of insolvency laws between India and

that of the United Kingdom and Singapore is because

these countries follow the common law system. The

Law of Insolvency in fact, originates in the United

Kingdom, because the concept of the limited liability

company structure originated here. India and

Singapore both follow the common law structure,

largely due to the fact that they both are also

Commonwealth countries. However, despite

following the same system, there is a long way to go

for India in terms of its ‘Insolvency Resolution’. As

per the World Bank’s Doing Business Report, India

ranks at 108 in its Insolvency Resolution, while

Singapore ranks at 27 and the United Kingdom ranks

at. All the above-mentioned countries are at different

stages of reforms in their respective insolvency laws.

The United Kingdom has already undertaken two

rounds of significant reforms, the first one in 1986

based on the Cork Committee report of 1982. The

second reform was in 2002. In Singapore, the

Insolvency Law Reform Committee (ILRC), which

was set up in 2010, submitted its recommendations in

2013. India initiated its major reform in 2014, when

the Ministry of Finance constituted the BLRC.

3 years since the passing of this legislation, this

paper seeks to analyze the effectiveness of the code in

comparison to its common law counterparts, UK and

Singapore with special emphasis on the timeliness of

the resolution of cases under the Code. The analysis

is in two parts. The first section compares the

legislative provisions of the countries in order to

identify fields of operation that effect the timeliness

of the resolution proceedings. Secondly, once the

legislative the question that is to be answered is

whether passing of the Code has actually lead to faster

insolvency resolution procedures. But as Ravi points

out in her article, there has been few empirical studies

in India in the area of insolvency law and practice as

she explores the judicial innovations and weak

institutions that have lead to tremendous delays in the

resolution of cases under the earlier Code

Fortunately for foreign creditors in Singapore, the

English-based conflict system generally has an effect

on foreign bankruptcy decisions, and Singapore itself

recognizes this principle in law. Law enforcement

under this Act is achieved by court registration on

application by assessment creditors. While the law

does not require strict reciprocity, it demands

substantially the same recognition of the Singapore

ruling if foreign court decisions are to be made

recognized in Singapore.

According to Mark Gross (2000), Singapore

courts will recognize liquidator authorities appointed

under the law of place of incorporation to act on

behalf of the PT corporation. The reason for this rule

is that the existence and dissolution of entities which

have been legally created under the laws of a foreign

country must be regulated by that law. The question

is, to what extent will the court acknowledge the

verdict of the bankrupt property from jurisdictions

other than the establishment of the company. The

reasons for granting such recognition are that the

business activities of foreign companies may be

widespread or more substantial elsewhere, or the

place where the incorporation may be just

coincidence or an attempt to take advantage of the

law.

Singapore’s international insolvency law is

underdeveloped and out of sync with current

international norms, at least with regards to those

countries that have adopted one or more international

or regional measures promoting co-operation and co-

ordination in international insolvencies. The main

reason for this unsatisfactory state of affairs is that s

377(3)(c) provides for ring-fencing. A subsidiary

reason is that whilst some of Singapore’s most

important trading partners and sources and

destinations of investments have enacted the Model

Law or are members of regional initiatives such as the

EC Regulation, we have neither adopted the Model

Law nor ratified any convention or treaty on

international insolvency. To a certain extent, this

problem may beameliorated if the ring-fencing in s

377(3)(c) is removed and our courts accept

universalism as the guiding principle. It is, however,

not a substitute for adopting the Model Law.

Tay Yong Seng & Jonathan Chan Tuan San

(2016), when businesses fail, it is not unheard of for

businesspersons to abscond from the jurisdiction or to

hide behind corporate vehicles, leaving debts

unsatisfied. This article is concerned with the reach of

Legal Settlement Efforts That Should Be Done by Indonesia and Singapore in Completing Debt by Curators to Creditors through Bankruptcy

491

Singapore’s bankruptcy courts over the “absconding

debtor”, a person who deliberately keeps out of

Singapore to avoid his creditors. The Singapore

bankruptcy courts have not had much opportunity to

deal with the absconding debtor. On the other hand,

the English, Hong Kong, and Australian courts have

interpreted their own bankruptcy jurisdiction

provisions widely to address the mischief of the

absconding debtors. This article will argue that their

approach is consistent with our own bankruptcy

legislation and may be considered by the Singapore

courts in dealing with the absconding debtor.

WEE Meng Seng (2011), The most urgent step to

modernise our international insolvency law is to

repeal the ring-fencing words in s 377(3)(c). This in

itself could not have been a simpler legislative act.

The matter that requires more effort is the point made

above that in repealing those words we need to ensure

that it does not prejudice any policy of protecting

certain classes of creditors of specific industries, for

example, depositors in banks and policyholders in

insurance companies. It has been suggested that it is

unlikely that such a policy will be effected through a

general provision like s 377(3)(c) instead of a specific

provision for the particular type of company

concerned. Still, that possibility cannot be ruled out

completely. It is therefore necessary for the body set

up to reform this area of law to conduct a

comprehensive inquiry into this matter and where

necessary amend the relevant written law.

As the financial realities in a country continue to

change, bankruptcies and bankruptcy practices must

evolve accordingly. This applies to Singapore's

bankruptcy regime and is also reflected in the recent

bankruptcy developments in various jurisdictions.

The Bankruptcy and Bankruptcy Code was

established to create one law that consolidates

bankruptcy and bankruptcy proceedings for all

debtors. It aims to reduce the inefficiency of the

current system and increase the rate of debt recovery.

4 CONCLUSIONS

Legal settlement efforts that must be made by

Indonesia and Singapore in settling debts by curators

to creditors through bankruptcy are related to this

objective, in a PKPU it is possible to make a peace,

for example by conducting debt restructuring, both

for all debt and part of the debt, it can be said that

peace is one of PKPU. If within the delay (time) the

debtor fails to reach peace, the peace is canceled, the

bankruptcy provisions will apply. Efforts to settle

debts with bankruptcy result in all the assets of the

bankruptcy being confiscated by the court, and the

person concerned cannot manage his assets because

they have been taken care of by a curator until the

bankruptcy process ends, including settling all debts.

Meanwhile, Singapore's efforts to resolve it in the

form of a court can order a refund or cancel an

undervale transaction conducted by a third party with

a bankrupt debtor within five years.

5 SUGGESTION

Efforts to realize the uniformity of bankruptcy law

both by referring to the Model Law and by fostering

international cooperation through international

agreements require a relatively long time and are not

easy. Therefore, one of the suggestions that can be

given, especially in maintaining the collapse in the

value of assets in bankruptcy assets is the existence of

a court order in a bankruptcy case that punishes the

bankrupt debtor to authorize the curator or liquidator

to take legal action in the form of selling assets in

Singapore or taking assets. Above the power of the

bankrupt debtor so that it can enter the bankruptcy

estate to be executed. So that this can provide

protection for the rights of creditors in obtaining

payments from bankruptcy assets because the value

of the bankruptcy assets does not decrease.

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