Today, the Court of Appeal dismissed Scomi Group Bhd’s appeal against the High Court decision dismissing its judicial management application.
As set out earlier, the High Court had ruled on two points when dismissing the judicial management application of Scomi Group Bhd, being a listed company.
First, the High Court ruled that a listed company could not apply for judicial management. The High Court ruled that a listed company would fall within the exclusion in section 403(b) of the CA 2016: “a company which is subject to the Capital Markets and Services Act 2007“.
Second, in this case, a secured creditor had exercised its right of veto in section 409 of the CA 2016 to object to the judicial management application. Scomi Group Bhd argued that the veto had to be interpreted narrowly and where the phrase “secured creditor” had to still be read together with, essentially, a secured creditor who could appoint “a receiver or receiver and manager referred to in subparagraph 408(1)(b)(ii)“.
Subsequent to the High Court decision, Scomi Group Bhd had obtained a Court of Appeal interim preservation order to essentially revive the judicial management moratorium.
With today’s decision, the Court of Appeal, in its brief oral comments, confirmed both findings of the High Court. In particular, this appellate decision confirms that a listed company cannot apply for judicial management. There are no written grounds of judgment yet. I will update this post with a longer case commentary once the written grounds are issued.
The Court of Appeal decision also means that the interim preservation order protecting Scomi Group Bhd would have now fallen away.