IMDB liquidators lose bid in S'pore court to sue StanChart, BSI

The High Court has prevented foreign liquidators from suing Standard Chartered Bank and BSI Bank over transactions allegedly linked to the 1Malaysia Development Berhad (IMDB) scandal, ruling that Singapore’s cross-border insolvency framework cannot be applied to deals executed before the law took effect in 2018.

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The liquidators of Blackstone Asia Real Estate Partners and Brazen Sky, two companies embroiled in the multibillion-dollar IMDB affair, had sought to bring avoidance claims — a legal mechanism allowing liquidators to reverse suspect transactions and recover assets improperly transferred from creditors — against the banks in Singapore.

The applications are part of wider international efforts to recoup assets lost in one of the world’s largest financial scandals.

Justice Aidan Xu dismissed both applications, citing Article 23(9) of the Insolvency, Restructuring and Dissolution Act, which enacted the Model Law on Cross-Border Insolvency in Singapore.

This provision, unique to the Republic and not found in the United Nations Commission on International Trade Law framework, explicitly bars foreign liquidators from challenging transactions entered into before the legislation came into force.