Singapore Court Issues Landmark Decision Recognizing Indonesian Restructuring Plan

The Singapore International Commercial Court ("SICC") has handed down its first insolvency-related ruling. The court granted recognition and full force and effect to Indonesia's flagship airline's restructuring plan. That plan had been approved in accordance with Indonesian law. In granting recognition to the Indonesian plan under Singapore's version of the UNCITRAL Model Law on Cross-Border Insolvency, the SICC overruled objections to recognition from aircraft lessors.

The objections asserted that recognition of the Indonesian proceeding would violate Singapore's public policy because, among other things, the Indonesian plan set forth a different classification regime than would be permitted under Singapore law, and the debtors did not negotiate with all unsecured creditors regarding alternative aircraft leasing arrangements. The court held that the public policy exception to recognition under the Singapore Model Law should be narrowly construed and that courts