Insolvency Law at Brunei
In Brunei, insolvency law is primarily governed by the Insolvency Act, 2016, which consolidates and modernizes the legal framework for personal and corporate insolvency. This law replaced older legislation such as the Bankruptcy Act (Cap. 67) and parts of the Companies Act dealing with company winding-up.
Key Features of Brunei's Insolvency Law:
1. Corporate Insolvency (Winding Up)
Companies can be wound up voluntarily by shareholders or compulsorily by court order.
Grounds for winding up include:
Inability to pay debts.
Just and equitable reasons.
The Official Receiver or a licensed insolvency practitioner is usually appointed as liquidator.
2. Personal Insolvency (Bankruptcy)
A person is considered bankrupt if unable to pay debts exceeding BND 10,000.
Bankruptcy can be initiated by creditors or voluntarily by the debtor.
Upon bankruptcy, a trustee in bankruptcy manages the individual’s estate to pay off debts.
3. Debt Repayment Scheme
The law introduces alternatives like a Debt Repayment Scheme (DRS) for individuals with debts between BND 5,000 and BND 100,000, allowing structured repayment without bankruptcy.
4. Cross-Border Insolvency
Brunei’s law includes provisions inspired by the UNCITRAL Model Law on Cross-Border Insolvency, enabling cooperation in international insolvency cases.
5. Corporate Rescue Mechanisms
Judicial management allows companies to be placed under temporary protection from creditors while efforts are made to rehabilitate the business.
Schemes of arrangement allow restructuring of company debts with court approval.
6. Insolvency Practitioners
Only licensed practitioners are allowed to manage insolvency cases, subject to regulation by the Official Receiver's Office.
RELATED Blog
0 comments