LPA Asia Smart News

16 July 2026

Through this newsletter, we offer you a regular selection of legislative and judicial decision insights prepared by LPA lawyers from our six Asian offices as well as some recent news from our teams.

SMART ALERT

Hong Kong announces New International Commercial Court

LEGAL INSIGHTS IN ASIA

Vietnam

Vietnam’s new multi-tiered crypto strategy

Merger control in Vietnam – higher notification thresholds and new fixed fine regime

Hong Kong

Hong Kong proposes enhancements to its carried interest tax regime

China

Protection of Trade Secrets

Singapore

Singapore strengthens its corporate rescue

Japan

Digitalization of civil litigation procedures — new litigation practice through “mints”

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NEWS FROM LPA

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SMART ALERT

Hong Kong announces New International Commercial Court

A new forum for cross-border commercial disputes

On 28 May 2026, the Hong Kong Judiciary announced plans to establish the Hong Kong International Commercial Court (the “HKICC”), a specialist division of the High Court dedicated to resolving complex and substantial commercial disputes with an international or cross-border dimension. The HKICC is expected to commence operations in 2027.

The HKICC will function under the existing High Court Ordinance and Rules of the High Court. Detailed rules have not yet been published but are expected to appear in a Practice Direction covering jurisdiction, case eligibility, and procedure.

Key Features

Current indications suggest that the HKICC may be designed around the following elements:

• Commercial expertise: HKICC cases are expected to be handled primarily by Hong Kong judges with deep commercial experience, supplemented where suitable by distinguished common law judges from outside Hong Kong. This should assist with disputes involving parallel proceedings, anti-suit applications, foreign-law evidence, and other issues common in multi-jurisdictional litigation.
• Digital process: The court is expected to make use of modern litigation tools, including remote hearings, electronic filing, digital hearing bundles, and live transcription.
• Active case management: Procedures are likely to emphasize flexible management of complex claims, efficient handling of appeals and a timetable geared toward prompt resolution.
• Public adjudication: Because proceedings would generally be heard in open court and judgments published, HKICC cases would add to Hong Kong’s body of commercial law authority.

Why It Matters for Businesses

The HKICC represents a significant development for companies involved in cross-border trade, investment, finance and infrastructure projects throughout Asia.

For many years, parties selecting Hong Kong as a dispute resolution venue have often favoured arbitration, particularly through the Hong Kong International Arbitration Centre (HKIAC). The HKICC will offer a compelling alternative for parties that value the advantages of court litigation, including public judgments, the creation of precedent, and a structured appellate process.

The new HKICC may be particularly attractive for disputes involving a Mainland China nexus. Hong Kong already benefits from a well-developed framework for the reciprocal recognition and enforcement of judgments and court orders with Mainland China. If qualifying HKICC judgments are able to benefit from these arrangements, the court could become an especially powerful forum for disputes involving Mainland counterparties, Mainland-based assets or enforcement considerations. This could provide businesses with the advantages of a common law court while preserving effective enforcement options across the border.

Looking Ahead

Taken together, the establishment of the HKICC makes Hong Kong a more compelling choice for high-value commercial litigation.

Businesses should therefore monitor the forthcoming Practice Direction and consider whether the new HKICC may offer strategic advantages for future disputes. The HKICC may be particularly attractive for dispute resolution where parties prefer the transparency of court proceedings, the certainty provided by published precedents and the safeguard of appellate review, rather than the confidentiality traditionally associated with arbitration.

Nicolas Vanderchmitt | Camilla Venanzi

 

LEGAL INSIGHTS IN ASIA

Vietnam’s new multi-tiered crypto strategy

Examining the jurisdictional shift from prohibition to regulation of the emerging crypto market

Vietnam is currently one of the most active crypto markets in the world, ranking 4th globally in crypto adoption[1]. For a long time, however, this enthusiastic market operated in a legal gray area.

A turning point came in 2017, when it was clarified that cryptocurrencies are not a legal means of payment. This prohibition was intended to prevent illegal capital flight, protect the stability of the Vietnamese Dong (VND), and mitigate money laundering risks. However, the ban did not dampen the adoption of crypto assets, instead, it drove activity offshore.

This era is now coming to a close as Vietnam develops a comprehensive legislative framework. Crypto trading will now operate in a regulated manner. Three instruments sit at the heart of this shift, representing one of the most ambitious attempts by a Southeast Asian government to regulate the crypto economy: the Law on Digital Technology Industry[2], Resolution 05/2025[3] and Decision 96[4].

Part 1: law on digital technology industry

The first foundational piece of the framework is the Law on Digital Technology Industry, which formally recognizes digital assets as a category of property.

It establishes that digital assets are covered by all rights attached to conventional property[5], they are legally protected, transferable, and inheritable. This is fundamental because, previously, holders of digital assets had no clear recourse in Vietnamese courts, no basis for inheritance planning, and no legal protection if assets were seized or misappropriated.

The law also leaves room for regulatory sandboxes, which allow new technologies to be developed and tested in controlled environments. This limits regulatory risks while providing opportunities for innovation to prove its benefits. The sandbox model is increasingly favored by progressive regulators worldwide; Vietnam’s adoption of this approach signals an intent to attract fintech development by giving authorities the space and time to observe, learn, and adapt rules before implementing them on a wider scale.

However, protected digital assets explicitly exclude fiat currencies and securities[6]. Consequently, they will not be subject to securities law or monetary regulation. Anti-Money Laundering and Combatting the Financing of Terrorism (AML/CFT) compliance remains at the center of the framework[7]. This indicates that the concerns leading to the 2017 payment ban remain priorities, but the response from Vietnamese authorities has shifted from prohibition to structured compliance.

Part 2: resolution 05/2025 and decision 96

While the Law on Digital Technology Industry gave digital assets a legal existence, Resolution 05/2025 defines their behavior.

The resolution establishes a five-year pilot program for the issuance, trading, and management of crypto assets[8]. As an operational rulebook, it translates the Law on Digital Technology Industry into actionable market rules, applying to both domestic and foreign participants wishing to operate in Vietnam’s crypto market.

It maintains the formal definition of crypto assets as “a type of digital asset that uses cryptography or other digital technologies with similar functions to authenticate the assets during their creation, issuance, storage, or transfer”[9] which “may be used for the purposes of exchange or investment”[10]. This definitional clarity is essential; without it, subsequent provisions on licensing, issuance, and trading would lack a coherent scope.

One of the most consequential provisions is that all settlements must be conducted in Vietnamese Dong[11]. This rule directly addresses concerns regarding threats to monetary sovereignty by ensuring that crypto trading flows through the domestic financial system.

Resolution 05/2025 also establishes the conditions under which crypto assets may be issued in Vietnam[12]. Two requirements stand out:

• a prospectus must be published on the issuer’s website at least 15 days prior to any issuance, this disclosure obligation is designed to protect investors and allow regulatory review;
• all issued assets must be backed by tangible underlying assets, effectively excluding purely speculative tokens with no identifiable collateral base.

The new framework also addresses the reality that many Vietnamese investors are already trading crypto through unlicensed or offshore platforms. It provides a grace period for those currently active in the market but sets a clear deadline: within six months of the licensing of the first provider, trading by domestic investors must be conducted through licensed platforms. Failure to comply may result in administrative penalties or criminal prosecution[13]. This transition period is designed to bring current activity onshore while avoiding market disruption.

Moreover, during the effective period of Resolution 05/2025, or until a specific tax regime is issued for the crypto asset market in Vietnam, VAT is not applicable to transfer and trading of crypto assets[14]. The provider of the trading service is responsible for the deduction and pay of the corporate income tax on behalf of the foreign organisation for each crypto asset transaction[15].

In January 2026, the Government published a decision establishing three new administrative procedures: issuing licenses for organizing cryptocurrency trading markets, amending those licenses, and revoking them. By creating these procedures, authorities have also clarified the requirements for prospective platform operators.

Among them, three characteristics stand out:

• strict minimum charter capital requirements: the financial bar to entry is set very high, at VND 10 000 billion (approximately USD 380 million), ensuring that only the most secure operators can obtain a license;
• foreign ownership caps: foreign ownership is capped at 49%, implying a domestic control requirement that limits the influence of foreign investors in the Vietnamese crypto market; and
• technical standards: crypto trading platforms must meet specific operational and cybersecurity requirements, though the exact parameters remain subject to further regulatory guidance.

Part 3: outlook

Vietnam has shown the ambition to become a leading crypto hub in Southeast Asia. The most innovative elements of Vietnam’s crypto strategy are the Sandbox initiatives. For example, a Sandbox initiative has been put in place in Da Nang and will run for 36 months, until 31 August 2028, and operates within the Da Nang International Financial Center. This special autonomous status for financial experimentation allows the use of stablecoins as a payment instrument within a limited zone. If the experiment proves successful, it could lay the groundwork for broader stablecoin integration in the future.

The importance of a crypto trading framework was highlighted in March 2026, when Onus, one of the most widely used crypto platforms among Vietnamese retail investors, suffered a significant crash that left users unable to access their funds. This is currently under investigation. This episode reinforces the case for this new framework and serve as a reminder of the systemic vulnerabilities that persist when large amounts of capital operate outside a regulated environment.

Vietnam’s crypto regulation aims at protecting investors, notably, the minimum capital requirement of VND 10,000 billion (approximately USD 380 million or EUR 328 million) is very high by both regional and global standards. This exceeds the capitalization requirements imposed on crypto exchanges by regulators in Singapore, Hong Kong, and the EU under MiCA. Moreover, the 49% foreign ownership cap further narrows the field. These requirements aim at pushing the market towards only having a small number of licensed operators with high safeguards in place, creating a secure landscape for investors. It has not stopped some strong players from wanting to join the pilot scheme. For example, CAEX, a joint venture between VPBank, one of the largest private Vietnamese banks, and OKX, a crypto exchange platform already established in China, Singapore and Dubai.

It is clear that Vietnam has steered away from prohibition and toward regulation, which could cement its position as a leading digital asset market in Southeast Asia. These regulations have set the groundwork for the trading of cryptos in Vietnam and are surely subject to adaptation to reinforce the market in a secure manner.

[1] Chainalysis 2025, Global Crypto Adoption Index

[2] Law on Digital Technology Industry (71/2025/QH15), hereafter “Law on Digital Technology Industry”

[3] Resolution 05/2025/NQ-CP, hereafter “Resolution 05/2025”

[4] Decision 96/QD-BTC, hereafter “Decision 96”

[5] Art. 46, Law on Digital Technology Industry

[6] Art. 47, Law on Digital Technology Industry

[7] Art. 48, Law on Digital Technology Industry

[8] Art. 18, Resolution 05/2025

[9] Art. 47, Law on Digital Technology Industry, and Art. 3, Resolution 05/2025

[10] Art. 4, Resolution 05/2025

[11] Art. 4, Resolution 05/2025

[12] Art. 5 and Art. 6, Resolution 05/2025

[13] Art. 7 and Art. 8, Resolution 05/2025

[14] Art. 3, Circular 32/2026/TT-BTC

[15] Art. 4, Circular 41/2026/TT-BTC

Antoine Logeay

 

Merger control in Vietnam – higher notification thresholds and new fixed fine regime

Vietnam is entering a transitional phase in its merger control regime. From 1 July 2026 to 28 February 2027, notification thresholds for merger filings will temporarily double, exempting many mid‑sized transactions from mandatory review.

At the same time, a new fixed fine structure has been introduced for failures to notify cross‑border M&A deals, replacing the previous revenue‑based penalty system.

1. Notifiable thresholds are about to increase twofold

Following the promulgation of Resolution No. 66.18 dated 18 May 2026, which aims to simplify and streamline business conditions under the management of several ministries, higher merger filing notification thresholds will temporarily apply from 1 July 2026 until 28 February 2027.

For enterprises other than credit institutions, insurance companies, and securities companies, the thresholds are as follows:

• Total assets in the Vietnam market of the enterprise or its affiliated group: VND 6 trillion or more in the financial year preceding the anticipated economic concentration (up from VND 3 trillion).
• Total sales or purchase revenue in the Vietnam market of the enterprise or its affiliated group: VND 6 trillion or more in the financial year preceding the anticipated economic concentration (up from VND 3 trillion).
• Transaction value of the economic concentration: VND 2 trillion or more (up from VND 1 trillion).
• Combined market share of the enterprises involved: 20% or more of the relevant market in the preceding financial year (unchanged).

This adjustment means that many mid-sized M&A transactions will fall outside the scope of mandatory notification to the Vietnamese merger control regulator during this eight‑month window. After this trial period, the Government is expected to issue a new decree to formally update the thresholds under the Law on Competition.

Overall, this is a welcome move by the Government, signalling its intention to create a leaner administrative regime and to support the business community in conducting transactions more efficiently in Vietnam.

2. New administrative fines for failure to notify cross-border M&A transactions

Effective 20 May 2026, enterprises involved in cross-border mergers and acquisitions with Vietnamese businesses face new administrative fines if they fail to submit a merger notification to the Vietnam Competition Commission (VCC).

• Enterprises having total asset value or sales/purchase revenue in Vietnam below VND 3 trillion (in the preceding financial year): fines range from VND 500 million to VND 1 billion (approx. USD 20,000–40,000).
• Enterprises having total asset value or sales/purchase revenue in Vietnam above VND 3 trillion: fines range from VND 1 billion to VND 2 billion (approx. USD 40,000–80,000).
• In all cases, the fine is capped at 5% of the turnover earned by the violating enterprise in the relevant market during the preceding financial year.

These changes were introduced under Decree 102/2026/ND-CP dated 31 March 2026 (“Decree 102”), amending Decree 75/2019/ND-CP (“Decree 75”) on administrative sanctions in the competition sector.

Resolution No. 66.18 does not amend Decree 102 directly raising some doubt if the new notifiable thresholds also apply to Decree 102.

Key Differences from Previous Rules

Under Decree 75, penalties for failure to notify were calculated as 1% to 5% of revenue in the relevant market. Decree 102 shifts to a fixed penalty structure, reflecting the Ministry of Industry and Trade’s view that:

• Administrative violations such as failure to notify do not necessarily restrict competition significantly.
• Fixed penalties avoid disproportionate sanctions.
• Revenue-based penalties are difficult to apply in practice, as they require defining the relevant market before calculating fines.

Revenue-based penalties remain in force for prohibited transactions. For example, under Article 12 of Decree 75, if a prohibited acquisition is implemented, fines of 1% to 5% of revenue in the relevant market apply to both acquirer and target.

As a reminder, Pursuant to Article 30 of the Law on Competition, an economic concentration is prohibited if it causes, or is likely to cause, a considerable restriction of competition in Vietnam. Under Decree 35/2020, a combined market share of 20% or more remains a key indicator for the VCC in assessing the requirement to notify an intended economic concentration and to assess potential competition concerns.

For companies engaging in cross-border M&A transactions involving Vietnam, compliance with merger notification requirements is now more predictable but still critical. The new fixed fines reduce uncertainty but underscore the importance of timely filings.

Etienne Laumonier

 

Hong Kong proposes enhancements to its carried interest tax regime

On 12 June 2026, the Hong Kong Government gazetted the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 (the “Bill”), which was introduced into the Legislative Council for its first reading on 24 June 2026.

The Bill forms part of a broader package of measures aimed at reinforcing Hong Kong’s competitiveness as an international asset and wealth management centre. While Hong Kong already offers a preferential tax regime for eligible carried interest, introduced in 2021, the proposed amendments would substantially broaden its scope and simplify a number of the conditions for benefiting from the regime.

Broadening the Existing Carried Interest Regime

The existing regime provides a 0% tax rate for eligible carried interest received by qualifying investment managers and qualifying employees. However, the concession has been subject to a number of technical and administrative conditions that have limited its practical scope.

The Bill seeks to address these limitations through a series of important enhancements.

Among the principal enhancements, the proposed amendments would broaden the categories of qualifying funds, eligible investments and qualifying investment transactions capable of generating eligible carried interest. While the existing regime has been used primarily in the context of private equity structures, the proposed amendments are intended to extend the concession to a much broader range of qualifying investment strategies falling within Hong Kong’s preferential tax regime for funds.

The Bill also broadens the categories of qualifying persons, eligible recipients and entities capable of paying eligible carried interest. The salaries tax concession would continue to apply to qualifying employees employed by a qualifying investment management service provider (or its associated corporation or partnership) carrying on business in Hong Kong and providing investment management services in Hong Kong. The proposed amendments also broaden the circumstances in which eligible carried interest may be paid.

The Bill also simplifies the operation of the regime by removing certain administrative and technical requirements, including the current requirement for certification by the Hong Kong Monetary Authority, as well as other eligibility conditions that have attracted industry feedback since the regime was introduced.

Importantly, the proposed concession remains limited to eligible carried interest. Ordinary salaries, bonuses, commissions, management fees and other fixed remuneration continue to fall outside the preferential regime.

In broad terms, eligible carried interest must constitute genuine performance-based remuneration arising from investment management services provided to a qualifying fund (or the Innovation and Technology Venture Fund Corporation). To qualify, the carried interest must be linked to qualifying investment profits and the relevant investment management activities must be carried out in Hong Kong so as to satisfy the applicable economic substance requirements. Fixed returns, guaranteed payments and management fees recharacterised as carried interest remain outside the scope of the concession.

Transitional Administrative Arrangements

Pending enactment of the Bill, the Inland Revenue Department has announced a practical transitional arrangement. Taxpayers who expect to qualify under the enhanced regime may file their 2025/26 Salaries Tax Returns on the basis of the proposed concession while the Bill is being considered by the Legislative Council.

Why it Matters

The proposed reforms should be viewed in the broader context of Hong Kong’s ambition to consolidate its position as one of the world’s leading international asset and wealth management centres.

Hong Kong’s asset and wealth management industry continues to expand, with assets under management reaching HK$35.1 trillion at the end of 2024. According to the Boston Consulting Group’s Global Wealth Report 2026, Hong Kong has also become the world’s largest cross-border wealth management centre, surpassing Switzerland.

The proposed amendments represent a significant enhancement of Hong Kong’s tax offering for the asset management industry. By broadening the scope of the carried interest regime and simplifying access to the concession, the Government aims to encourage a wider range of investment managers to establish and expand their operations in Hong Kong. The reforms are expected to make the regime attractive to a broader range of investment strategies and market participants, including private equity, venture capital, private credit, hedge funds and family offices.

Nicolas Vanderchmitt | Camilla Venanzi

 

Protection of Trade Secrets

The State Administration for Market Regulation has issued the ‘Regulations on the Protection of Trade Secrets’ (hereinafter referred to as the “New Regulations”), which came into force on 1 June 2026, replacing the ‘Provisions on the Prohibition of Acts Infringing Trade Secrets’, which had been in force for nearly thirty years.

The promulgation and implementation of the New Regulations have multiple significant implications. Firstly, they expand the scope of protection for trade secrets, explicitly including interim results generated during production and business operations, as well as data from failed experiments and technical proposals. This means that process documents previously overlooked—such as logs, experimental records and meeting minutes generated during enterprises’ research and development processes—may now be recognized as trade secrets due to their potential commercial value.

Secondly, the New Regulations emphasize that confidentiality measures must be commensurate with factors such as the nature and commercial value of the trade secrets and the media on which they are stored. In addition to traditional confidentiality measures, enterprises need to implement differentiated protection schemes based on the importance of the information, the potential risk caused by disclosure, and the specific methods of information storage and circulation (such as paper documents, local servers and cloud-based collaboration).

Furthermore, the New Regulations establish a new framework tailored to the current digital era, expanding the scope of protection for trade secrets to include algorithms, data, computer programmes and code, thereby providing a third form of protection for enterprises’ data assets alongside copyright and special rights relating to databases. In addition to traditional acts of infringement, the New Regulations also classify acts such as ‘unauthorized intrusion into digital systems or cloud environments’ and ‘acquisition via malicious programmes’ as infringements, thereby establishing a strong link between cybersecurity compliance and the protection of trade secrets.

The promulgation and implementation of the New Regulations reflect the state’s high priority on the protection of intellectual property rights. They reinforce enterprises’ confidentiality obligations and responsibilities and encourage them to establish and improve their trade secret protection management systems.

Hélène Liu | Estelle Chen

 

Singapore strengthens its corporate rescue

What the latest suggested reforms mean for the companies, lenders and the professionals who advise them

Singapore is preparing the next phase of reforms to its corporate restructuring and insolvency framework. On 14 May 2026, the Ministry of Law broadly accepted recommendations aimed at making corporate rescue faster, cheaper and more effective for financially distressed but viable businesses. While the detailed legislation has yet to be enacted, the direction is clear: Singapore wants to remove practical roadblocks, strengthen rescue tools and reinforce its position as a leading restructuring hub.

The proposed reforms refocus judicial management on genuine rescue and restructuring.

They make schemes of arrangement more usable by reducing hold-out risks from dissenting creditors and out-of-the-money shareholders.

They also improve transparency, cross-border coordination and investor confidence in complex restructurings.

What happens when a company can no longer pay its debts?

When a Singapore company runs out of money and is unable to meet its financial obligations, usually there are broadly two possible outcomes: either, it can be wound up/liquidated with all its assets sold off and the proceeds being used to pay off debt, or it can be rescued, by reorganizing the company’ s structure and giving it breathing space to survive as a going concern.

Where rescue is realistically possible, restructuring is often preferable to liquidation.  As a functioning business may preserve jobs, maintain commercial relationships and generate better returns for the creditors than a forced sale of assets.

Singapore offers two main legal routes to rescue a company, and suggested reforms are about making those two routes work better:

• Scheme of Arrangement: its is essentially a deal between a company and its creditors, voted on by those creditors and then approved by the court. Usually the existing management stays in-charge while a restructuring deal is negotiated (a “debtor-in-possession” model).
• Judicial Management: This is a court supervised rescue route in which an independent professional known as the Judicial Manager is appointed by the court at the request of the creditors or the company itself to take over the running of the company from existing management. This is usually used where independent control is needed, creditor confidence has weakened, or the business requires a neutral professional to assess and implement a rescue plan.

Singapore has already taken several major steps to modernize these tools in 2017 – 2020, borrowing several feature from the United States’ well-known ‘Chapter 11’ process such as, a longer moratorium (a legal “pause” on creditors chasing the company), priority funding to keep the business running during rescue, fast-track “pre-package” deals, and safe harbors against ipso-facto clause (which prevents contracts from being terminated solely due to restructuring). These changes helped Singapore in becoming a leading restructuring hub. However, formal processes, such as judicial management, continue to be viewed as slow, costly and unattractive in practice. This poses a serious concern for distressed companies that are already cash strapped. The latest recommendations aim to address these gaps.

1. Judicial Management 

Judicial Management (“JM”) is a court-supervised rescue process for companies that are unable, or likely to become unable, to pay their debts. The court may appoint a judicial manager, usually a licensed insolvency professional, to take control of the company’s business, assets and operations.

Once appointed, the judicial manager replaces existing management and assesses whether the company can be rescued, restructured, or dealt with in a way that gives creditors a better outcome than liquidation.

A key feature of JM is the moratorium: a temporary pause on creditor actions, including legal proceedings and enforcement, to give the company breathing space while a rescue plan is prepared.

Currently, JM may be used to keep the business going, support a restructuring deal, or realise assets for a better return than immediate liquidation. The initial appointment lasts 180 days and may be extended.

• The Problem

The Committee observed that JM is not always viewed favourably as most companies that enter JM frequently end up being wound up in the end. This creates the perception that JM is often a last resort rather than early rescue tool.

There is also practical concern from creditors. Once the judicial manager takes over creditors may feel that they have no control or visibility over the process. According to the company, judicial management is undesirable because it displaces existing management.

Cost is another major concern. The longer JM continues, the more professional fees and operating costs may diminish the remaining value for the creditors. For a financially distressed company, a rescue process that is too slow or expensive may defeat its own purpose.

• Committee Recommendations
• • Refocus Judicial Management on Rescue: The Committee has proposed removing asset realisation as a standalone objective of judicial management, so that JM is focused on turnaround and restructuring. The rationale is that the current framework is too broad: requiring a judicial manager to pursue multiple objectives can dilute the rescue purpose and reduce creditor support. Asset recovery or sale processes may be better addressed through receivership or winding up. To support the rescue objective, judicial managers would remain able, under court supervision, to make distributions to creditors.

• • Retain Both Entry Routes: The Committee recommends retaining both creditor-led and company-led routes into judicial management. This preserves flexibility: creditors may initiate JM where confidence in management has been lost, while a company may seek JM early where it identifies financial distress and needs an independent, court-supervised rescue process.

• • Introduce Outcome-Linked Fees: The Committee has suggested allowing success-based remuneration for judicial managers who achieve a restructuring and preserve the company as a going concern. Fees could be time-based during the initial phase and then linked to agreed outcomes, with the success criteria agreed between the judicial manager and creditors. This would better align incentives and encourage efficient, value-preserving rescues.

• • Preserve the recovery power – The Committee recommends retaining the judicial manager’s recovery powers, including the ability to claw back or recover assets transferred through transactions that unfairly depleted the company’s value before the rescue. This ensures that narrowing JM’s purpose to rescue does not remove important tools for restoring value to the company.

• Why does it matter?

The proposed changes would make judicial management more focused, practical and commercially attractive. By narrowing its purpose to genuine rescue and restructuring, the process becomes easier for companies and creditors to understand and get behind. For companies, this makes judicial management a more credible early option where the business is still viable but needs independent control and some breathing space. For creditors, clearer objectives, better visibility and outcome-linked fees should improve confidence that the process is being used to preserve value rather than simply prolong distress. Taken together, a leaner and more rescue-focused framework could turn judicial management from a last-resort process into a genuinely useful tool for viable businesses in financial difficulty.

2. Cross-class cramdown 

Cross-class cramdown is a key reform to make schemes of arrangement more effective. In a conventional scheme, creditors vote in separate classes based on their legal rights and economic interests. This ensures that secured lenders, unsecured creditors and subordinated creditors are treated according to their different positions. However, it can also give one dissenting class an effective veto, even where the plan has broad support and offers a better outcome than liquidation.

Cross-class cramdown reduces this hold-out risk by allowing the court, in appropriate cases, to approve a plan despite opposition from one or more classes. The court must still be satisfied that the plan has sufficient support, that dissenting creditors are no worse off than under the likely alternative, and that the allocation of value is fair. The core safeguards remain: the plan must not unfairly discriminate between classes and must be fair and equitable to any class being crammed down.

• The problem

Singapore’s existing framework contains an additional threshold that makes cramdown difficult to use in practice. In addition to class-by-class voting, the plan must also be supported by a majority in number representing three-quarters in value of all creditors intended to be bound by the scheme. This combined threshold is high and can discourage companies from attempting a cramdown at all, undermining the usefulness of the tool.

There is also a second limitation: the existing cramdown mechanism can be used against dissenting creditors but not dissenting shareholders. This matters because, where a company is deeply insolvent, shareholders are often “out of the money”. In other words, once creditors are paid, there may be no residual value left for the owners. Economically, their shares may have no value, yet they may still be able to obstruct a creditor-supported rescue.

• What is changing?

The reform would remove the additional overall approval threshold, making cramdown more practical while preserving the key safeguards: the plan must not unfairly discriminate between classes and must be fair and equitable to dissenting classes.

It would also extend cramdown to shareholders in appropriate cases, reflecting the reality that shareholders of an insolvent company may have no remaining economic value to protect. They may still retain an interest if they contribute genuine “new value” to the rescued business.

Together, these changes would make schemes of arrangement more usable, while maintaining strong court oversight and protection against unfair prejudice.

• Why does it matter?

Together, these changes address the hold-out problem from both directions: dissenting creditor classes on the one hand, and out-of-the-money shareholders on the other. The aim is to prevent a single stakeholder group from vetoing a fair and value-maximising restructuring plan that has broad support and offers a better outcome than liquidation.

In practical terms, this should improve the prospects of successful rescues, preserve more going-concern value, and make Singapore’s restructuring regime more competitive. The proposed framework seeks to strike a careful balance: more workable than the current Singapore rules, while retaining stronger fairness protections than some competing restructuring jurisdictions.

3. Clearing the roadblocks: a corporate view of efficient restructuring

In normal times, shareholders own the company, directors manage it, and creditors are simply the parties to whom the company owes money. Shareholders therefore have the final say on major decisions, such as selling the business or issuing new shares. This makes sense for a solvent company, as it protects owners from having their business sold or diluted without consent.

In distress, however, the economics change. As a company approaches insolvency, its value increasingly belongs to creditors, who must be paid before shareholders receive anything. Shareholders may therefore be “out of the money”, but existing shareholder-approval rules can still give them a practical veto over a restructuring that creditors support.

• The problem

Under sections 160 and 161 of the Companies Act 1967, shareholder approval is required to sell the whole, or substantially the whole, of a company’s business or property, and to issue new shares. These rules were designed for solvent companies and ordinary corporate governance, not for insolvency-driven restructurings.

This can create a roadblock in distressed situations. A sale of the business or an issue of new shares to a rescuer or investor may be central to the restructuring, but shareholders whose stake has little or no value may still be able to delay or frustrate a creditor-approved plan.

There is also a practical gap in schemes of arrangement. Existing management usually remains in control while the rescue is negotiated. This debtor-in-possession model is useful, but creditors may be concerned where there is no built-in independent oversight of how management deals with the company’s assets during the process.

• What is changing?
• • Streamline the shareholder veto. The shareholder-approval requirements for business disposals and share issuances will be removed or streamlined where these steps form part of a judicial management or scheme restructuring. This should prevent out-of-the-money shareholders from blocking a creditor-supported rescue and align Singapore more closely with the UK approach.

• • An optional “Restructuring Officer”. The court may appoint an independent Restructuring Officer to assist with a scheme in complex or contentious cases. The role is optional and flexible, covering tasks such as monitoring, reporting to the court, investigating misconduct, providing expertise or assisting with implementation. It will not apply to judicial management, where the judicial manager already performs this function.

• Why does it matter?

For management and investors, the streamlined rules reduce delay and uncertainty by preventing out-of-the-money shareholders from blocking a viable rescue. For creditors, the optional Restructuring Officer adds transparency and independent oversight where management remains in control, without the cost and disruption of full judicial management. Overall, the reforms should make the process more flexible, predictable and credible.

4. A note on cross-border cases 

The reforms also include technical measures for cross-border insolvencies, where a distressed business has operations, assets or creditors in multiple countries. Building on its 2017 adoption of international cooperation standards, Singapore plans to adopt two further model laws: one to coordinate insolvencies within multinational corporate groups, and another to clarify the recognition and enforcement of foreign insolvency-related judgments.

Singapore would be among the first jurisdictions to adopt both. For businesses with a regional footprint, this means greater certainty, better coordination and less duplication when a group operating across Asia and beyond runs into difficulty. It also reinforces Singapore’s position as a predictable and cooperative hub for complex international restructurings.

• The bottom line for businesses

Read together, these reforms point in one clear direction: making rescue the practical default for viable Singapore businesses, rather than a slow and costly path that too often ends in liquidation. The recurring themes are speed, lower cost, fairer outcomes, and the removal of veto points that let one stakeholder block a deal that benefits everyone else.

• What it means for different stakeholders?
• Distressed companies and their boards gain faster, cheaper and more credible routes to restructure, with fewer procedural roadblocks standing between a negotiated plan and getting it done.
• Lenders and creditors benefit from a higher chance that value is preserved rather than destroyed, plus better oversight and transparency through the optional Restructuring Officer and a rescue-focused JM.
• Borrowers and investors (including those bringing in “new money”) get a clearer, more predictable framework in which fair plans can actually be implemented without being held to ransom by holdout classes or out-of-the-money shareholders.
• Restructuring and legal professionals gain a more functional toolkit, including a usable cramdown, incentive-aligned JM fees, and a flexible court-appointed officer role, that keeps Singapore competitive with the world’s leading restructuring centres.

5. Conclusion

Taken together, the reforms mark a practical shift towards rescue over liquidation. By streamlining judicial management, improving cramdown tools, limiting shareholder vetoes and strengthening oversight in schemes, Singapore is seeking to make restructurings more predictable, commercially workable and value-preserving.

For companies, creditors, investors and advisers, the message is clear: viable businesses in distress should have a better chance of being rescued, with fewer procedural obstacles and stronger safeguards against unfair outcomes.

Bérengère Roig | Varsha Dhami

 

Digitalization of civil litigation procedures — new litigation practice through “mints”

The amended Code of Civil Procedure, which came into force on May 21, 2026, has significantly accelerated the digitalization of Japanese civil litigation procedures centered on “mints,” the electronic submission system for civil court documents.

1. Electronic filing as the general rule

Under the amended system, attorneys and other litigation representatives are, in principle, required to use electronic filing procedures.

Complaints, briefs, and evidence are expected to be submitted through mints, with PDF uploads becoming the standard method instead of conventional paper filings.

2. Witness examination by web conference

Previously, witness examination by web conference was permitted only in limited situations, such as where a witness resided in a distant location or where appearing in court could seriously impair the witness’s mental stability due to psychological pressure.

Under the amended rules, however, the scope has been expanded. In addition to the above circumstances, web-based witness examination may now also be used where the witness’s age, physical or mental condition, or other circumstances make appearance in court difficult, as well as where none of the parties object to the use of web examination.

3. Electronic judgments and service

Judgments and court orders are also being digitized.

Electronic judgments will be served through mints, and the appeal period will begin running from the earliest of the following events: when the electronic judgment is viewed on mints, when it is downloaded, or when one week has passed since notification of electronic service.

Accordingly, proper management of electronic notifications and confirmation of service will become more important than ever before.

4. Practical considerations

At the same time, full digitalization creates new practical challenges.

For example, if confidential information is mistakenly uploaded to mints, it may become accessible to the opposing party, requiring careful operational management.

While the reform is expected to improve efficiency and speed in court proceedings, it will also require practitioners to adapt to new practical demands such as electronic record management and system operation, making digital literacy increasingly important alongside legal expertise.

Leila Kissa Kashiwakura

 

OUR LATEST DEALS

EDHEC / Financial services

LPA Singapore advised Singapore Holding of the EDHEC endowment fund on the sale of Scientific Infra & Private Assets (SIPA), a leading provider of indices, benchmarks and rating solutions for private infrastructure and private equity markets, to PEI Group, a global business intelligence and analytics provider. LinkedIn

Humans and Leto Partners / Chemicals

LPA Singapore advised Humens and Leto Partners on the sale of NovaBay Pte Ltd, a Singapore-based manufacturer of premium-grade sodium bicarbonate and subsidiary of French chemical company Humens, to Tata Chemicals. LinkedIn

Central retail Corporation / Retail and distribution

APFL Partners advised Central Retail Corporation on the divestment of its stake in Nguyễn Kim, a leading electronics retail brand in Vietnam, to Pico Holdings JSC. LinkedIn

 

NEWS FROM LPA

Team | Yoshiki Tsurumaki joins LPA Tokyo as Head Partner of the Japanese Law Practice, strengthening LPA’s Japan capabilities and cross-border expertise. LinkedIn

Team | Minh Nguyen joins APFL Partners as Partner and Head of Dispute Resolution and Arbitration, strengthening the firm’s contentious capabilities in Vietnam and Southeast Asia. LinkedIn

Team | Mavis Zhang joins LPA Singapore as Associate in the Corporate and M&A team led by Bérengère Roig and Arnaud Bourrut-Lacouture. LinkedIn

Past event | LPA Law Hong Kong, in partnership with UFE Hong Kong & Macao, hosted a conference on tax and wealth management issues for French nationals living in Hong Kong. Led by Nicolas Vanderchmitt, Partner and Head of LPA Hong Kong, and Marie-Gabrielle du Bourblanc, Counsel specialising in international tax, the session covered key topics including tax residency, non-resident investment strategies and succession planning in cross-border contexts. LinkedIn (in French)

Past event | LPA Law attended the International Bar Association (IBA) Asia Pacific M&A Conference 2026 from 9–10 April in Tokyo. The event brought together more than 250 legal professionals from around the world to discuss key trends and developments in the M&A market. Our LPA Law delegation included lawyers from LPA Law’s offices in Paris, Hong Kong, Singapore, Ho Chi Minh City, Shanghai and Tokyo. During the week, LPA Law also held meetings with clients and business partners, as well as networking events with its international network and contacts. LinkedIn

Past event | Kosuke Oie, Partner at LPA Tokyo, participated in the G7 Lawyers’ Meeting (G7 des Avocats) held in Paris from 18-19 May 2026 at the Conseil national des barreaux (CNB), followed by visits to the Élysée Palace and the French National Assembly. The meeting gathered legal professionals and institutional stakeholders to discuss key issues related to the rule of law, trust in democratic institutions, misinformation and digital challenges. LinkedIn

Past event | Kosuke Oie, Partner at LPA Tokyo and Scholarship Officer of the Human Rights Law Committee at the International Bar Association (IBA), participated in the 19th Annual Bar Leaders’ Conference organised by the IBA, held on 20–21 May 2026 in Prague, Czech Republic. Kosuke moderated the roundtable session “Update – Measuring the impact of the IBA’s bar guidance on business and human rights”, alongside distinguished bar leaders to discuss the implementation and impact of the IBA’s guidance on business and human rights standards across jurisdictions. LinkedIn

Past event | Yoshiki Tsurumaki, Partner and Head of Japanese Law Practice at LPA Tokyo, spoke at an online seminar on legal liability for cybersecurity risks in supply chains organized by Abitus and Tokio Marine & Nichido Partners TOKIO. The session addressed court precedents, cybersecurity obligations, liability allocation between clients and vendors, and recent developments in supply chain cybersecurity frameworks. LinkedIn

Past event | APFL Partners contributed to the EuroCham Whitebook Dialogue Week 2026 in Hanoi, participating in discussions between the European business community and Vietnamese authorities on legal and regulatory reforms. Representing EuroCham Vietnam’s Legal Sector Committee, Antoine Logeay, Partner, and Long Tran, Of Counsel, took part in dialogues with the Ministry of Industry and Trade and the Ministry of Justice on foreign-invested enterprises, market access and dispute resolution frameworks. The discussions highlighted the importance of legal certainty and regulatory improvements in supporting Vietnam’s economic development and international investment. LinkedIn

Past event | Yoshiki Tsurumaki, Partner and Head of Japanese Law Practice at LPA Tokyo, spoke at a seminar organized by the Business Research Institute on M&A processes and directors’ risk management. The session covered key practical considerations throughout M&A transactions, including due diligence, contract negotiation, closing procedures, post-merger integration, and recent regulatory developments. LinkedIn

Past event | Lisbeth Lanvers-Shah, Of Counsel at LPA Singapore, spoke at the French Chamber of Commerce in Singapore (FCCS) Sustainable Business Committee event “The PFAS Imperative: ESG Governance and Corporate Resilience”. She shared legal insights on the growing importance of ESG governance, contractual considerations and supply chain resilience in the context of evolving PFAS regulations. The discussion brought together business and sustainability leaders to explore how companies can anticipate regulatory developments and strengthen operational resilience. LinkedIn

Past event | Yoshiki Tsurumaki, Partner and Head of Japanese Law Practice at LPA Tokyo, spoke at a seminar organized by Kinyu Zaimu Kenkyukai on carve-out M&A transactions. The session covered practical aspects of carve-out deals, including transaction structures, business transfers, corporate splits, stand-alone issues, contract negotiations and post-closing considerations. LinkedIn

Past event | APFL Partners participated in the 4th Southeast Asia Forum organized by Business France at the French Senate on 19 June 2026. Arnaud Bourrut-Lacouture, Managing Partner of LPA Singapore and APFL Partners, joined a panel discussion on the business environment and economic outlook in Southeast Asia, alongside regional experts. Southeast Asia continues to be a strategic region for French companies seeking growth and new business opportunities. LinkedIn (in French)

Past event | LPA Law hosted the Hong Kong Tech Night at its Paris office during VivaTech 2026, bringing together startups, investors, entrepreneurs and key players from the French and Hong Kong innovation ecosystems. Organized by the Hong Kong Trade Development Council (HKTDC), HKSTP and La French Tech Hong Kong – Shenzhen, the event fostered discussions on innovation, technology and cross-border opportunities between Europe and Asia. LinkedIn (in French)