In a landmark development for cross-border insolvency jurisprudence, the Singapore High Court has, for the first time, granted recognition to the Corporate Insolvency Resolution Process (CIRP) of an Indian company as a “foreign main proceeding” under the UNCITRAL Model Law on Cross-Border Insolvency, as adopted in Singapore through the Insolvency, Restructuring and Dissolution Act 2018 (IRDA). The case, titled Re Compuage Infocom Ltd and another [2025] SGHC 49, also recognised the appointment of the Indian resolution professional (RP), Mr. Gajesh Labhchand Jain, as a “foreign representative”. This is the first reported decision of its kind in Singapore involving recognition of an Indian CIRP, setting a vital precedent for future cases involving Indian companies with assets or operations in Singapore. 

Background and Context

Compuage Infocom Limited (CIL), a company incorporated in India and engaged in the business of IT distribution, operates a branch office and also has a subsidiary incorporated in Singapore. Amidst financial strain due to a sector-wide downturn, CIL defaulted on a loan repayment to an Indian creditor. In response, the creditor-initiated insolvency proceedings under India’s Insolvency and Bankruptcy Code, 2016 (IBC). The Mumbai Bench of the National Company Law Tribunal (NCLT) admitted the CIRP and passed orders initiating the process and appointing Mr. Jain as the RP.

Given CIL’s operational presence in Singapore, including a local bank account and business assets, the RP applied to the Singapore High Court seeking formal recognition of the CIRP under the UNCITRAL Model Law, incorporated into Singaporean law through Part 11 and the Third Schedule of the IRDA. The purpose of the application was to facilitate access to the Singapore bank statements and to recover and repatriate CIL’s assets located in Singapore. The need for formal recognition became pressing as the Singapore bank in question refused to cooperate without judicial recognition of the NCLT orders.

Legal Questions Before the Singapore High Court

To decide whether to grant recognition under the Model Law, the court had to consider several core legal questions:

1. Is the CIRP a “Foreign Proceeding” under the Model Law?

The court first assessed whether India’s CIRP process qualifies as a “foreign proceeding,” which, under the Model Law, requires the process to be collective in nature and initiated or supervised by a judicial or administrative authority. The court found that CIRP indeed qualifies as a collective proceeding since it involves multiple creditors, the formation of a Committee of Creditors (CoC), and is designed to ensure a balanced and fair restructuring process, prioritizing resolution over liquidation.

The public nature of the process—where claims are submitted via public notice, and all stakeholders are afforded participation—also supported this view. The objective of achieving a corporate rescue through the approval of a resolution plan by the CoC further reinforced the CIRP’s collective character.

2. Does the NCLT Qualify as a “Foreign Court”?

Another pivotal issue was whether the NCLT, a quasi-judicial body under Indian law, could be recognised as a “foreign court” for the purposes of the Model Law. The court observed that the definition of “foreign court” under Article 2(e) of the Model Law is broad enough to include non-judicial or quasi-judicial bodies. Given that the NCLT is empowered under the IBC to supervise and adjudicate CIRP matters, it was found to possess the requisite authority to be treated as a “foreign court” for the purpose of cross-border insolvency recognition.

3. Is Mr. Jain a “Foreign Representative”?

Under Article 2(i) of the Model Law, a foreign representative is someone authorized in a foreign proceeding to manage the debtor’s affairs or represent the process. The court accepted that Mr. Jain, as the appointed resolution professional under Indian law, is duly authorized to administer the reorganisation of CIL and to act in a representative capacity. Accordingly, he was formally recognised as a foreign representative by the Singapore court.

Relief and Directions

With recognition granted, Mr. Jain sought to repatriate CIL’s Singapore-based assets back to India to be dealt with as part of the company’s estate. The court agreed in principle but imposed a safeguard: creditors based in Singapore were to be notified and given an opportunity to raise any objections before the assets could be moved. This condition reflects the court’s balanced approach, ensuring procedural fairness while facilitating cross-border cooperation.

Significance and Implications

This decision is a significant milestone for both Indian insolvency practice and Singapore’s legal regime. It conclusively affirms that the CIRP under India’s IBC meets the criteria for recognition under the UNCITRAL Model Law, establishing a precedent for similar cases in the future. Additionally, by confirming that the NCLT qualifies as a foreign court and that RPs under Indian law can be recognised as foreign representatives, the judgment bridges a crucial legal gap in cross-border insolvency cooperation between India and Singapore.

This ruling also reinforces Singapore’s role as a forward-looking and internationally-aligned jurisdiction in the arena of cross-border insolvency. It signals a willingness to support and facilitate coordinated insolvency resolutions involving foreign debtors, particularly from India, which shares significant commercial ties with Singapore. For Indian resolution professionals and companies, the case offers both legal clarity and strategic guidance in managing offshore assets during insolvency proceedings.

Reserve Goods at Crossroads: Bridging the Compliance Gap Between Drugs Law and GST

The piece sheds light on the complex compliance challenges faced by pharmaceutical companies that find themselves caught between the regulatory requirements under drug laws and the tax obligations under the Goods and Services Tax (GST) regime—particularly concerning reserve batches. In India, it is common for different laws to govern various aspects of the same category of goods. For instance, while the manufacturing and quality standards of drugs are governed by the Drugs and Cosmetics Act, 1940 and the Food Safety and Standards Act, 2006, the GST law imposes tax liabilities on such products. Though these laws operate in distinct legal spheres, overlaps between them—especially between the GST regime and the Drugs and Cosmetics Act—can create regulatory conflicts.

A key area of concern arises under Rule 74A(h) of the Drugs and Cosmetics Rules, 1945, which mandates pharmaceutical companies to retain reference samples (or reserve batches) of each drug manufactured. These samples must be preserved for periods ranging from three months to three years, depending on the nature of the drug, for quality control and investigation purposes. These reserve samples are not meant for sale and serve only to ensure compliance with safety and efficacy requirements. However, this regulatory necessity poses a dilemma under GST law, which permits input tax credit only for goods used in the course or furtherance of business, subject to certain exclusions. One such exclusion under Section 17(5) of the CGST Act relates to goods disposed of without consideration. As reserve batches are never sold and often expire before they can be used commercially, pharmaceutical companies are effectively denied the ability to claim input tax credit on these batches. This results in financial losses and disincentivizes companies for merely complying with regulatory safety standards.

The situation is further complicated when manufacturing is outsourced to job workers, which is a common industry practice. Under Section 143(1) of the CGST Act, if inputs or capital goods are sent to a job worker, they must be returned within one year. Failing to do so would trigger a deemed supply under Section 143(3), thereby attracting GST liability. On the other hand, the Drugs and Cosmetics Act requires reserve goods to be maintained at the manufacturing premises—which may be the job worker’s facility—for up to three years. This mismatch in timelines means that even though the goods must legally remain at the job worker’s site under the DC Act, their return beyond one year under GST law is deemed a supply and becomes taxable. This imposes an unwarranted financial burden on companies that are simply fulfilling their legal obligations under drug law.

To address this anomaly and facilitate ease of doing business, the pharmaceutical industry could consider filing a representation with the authorities, seeking a specific exemption for reserve goods from the one-year return requirement under GST. In the absence of such an amendment, companies may need to explore alternative models to remain compliant with both sets of laws. One such option could be obtaining a separate GST registration for the job worker’s premises, although the practical implications of this must be carefully assessed. Another potential workaround could involve the pharmaceutical company selling the reserve goods to the job worker before the expiry of the one-year limit, followed by a resale back to the company, albeit this too would come with compliance and administrative burdens.

Financial and Operational Implications

Pharmaceutical companies face a double burden as a result of this regulatory gap. They must first deal with the financial consequences of the reserve samples’ denied input tax credit. Second, if reserve batches are kept at job worker locations for longer than the allowed one-year period, they run the danger of incurring additional GST responsibility on presumed supply. All of these repercussions combine to make compliance expensive and time-consuming, which may have an impact on pricing, profitability, and the long-term viability of the company. From an operational perspective, ineffective inventory management, higher compliance costs, and legal uncertainty may result from the inability to reconcile the requirements of the drug law with GST duties. Instead of concentrating on innovation or growth, companies could have to shift resources to controlling regulatory risks.

Possible Solutions and Industry Action

Given the pressing nature of the issue, the pharmaceutical industry should consider a collective approach to resolving this compliance gap. One viable step could be filing a formal representation with the GST Council or the Ministry of Finance, seeking a specific exemption for reserve goods from the one-year return requirement under Section 143 of the CGST Act. This would align the GST framework more closely with the practical realities of drug manufacturing and public health imperatives.

Alternatively, companies could explore structural workarounds to remain compliant with both sets of laws. One such option is to obtain a separate GST registration for the job worker’s premises, effectively treating it as a distinct place of business. This would allow companies to retain the reserve samples legally at that site without triggering deemed supply provisions. However, this approach involves additional compliance, record-keeping, and administrative overheads that may not be feasible for all businesses, especially smaller players.

Another potential workaround involves the sale and repurchase of reserve goods. Before the one-year period expires, the pharmaceutical company could “sell” the reserve goods to the job worker and then repurchase them later. While this may technically prevent the goods from being classified as deemed supply, it introduces additional transactional complexity, invoice generation, and potentially unnecessary tax flows, defeating the purpose of streamlining compliance.

The Need for Harmonization

Ultimately, this issue underscores the broader need for harmonization between sector-specific regulations and cross-sectoral tax laws. In sectors like pharmaceuticals, where regulatory compliance is non-negotiable and heavily prescribed, the tax framework must be flexible enough to accommodate such realities. Otherwise, businesses may find themselves trapped in a compliance maze, where fulfilling one legal requirement results in the violation or penalization under another.

Policymakers and regulators must take cognizance of these ground-level challenges and work toward integrated legal frameworks that promote both regulatory integrity and ease of doing business. In the context of reserve batches, this means recognizing their unique status and exempting them from certain GST provisions that were never intended to govern such regulatory obligations.

Conclusion

 The problem of reserve batches serves as an example of the frequently disregarded areas of conflict between India’s many regulatory sectors. A supportive and cohesive legal environment is becoming more and more important as the pharmaceutical sector develops and grows. It is not only a question of legal clarity; public health, industrial competitiveness, and regulatory consistency all depend on the GST law’s provisions being in line with the practical needs of the drug manufacturing sector.