A petitioner who has satisfied the court that just and equitable grounds exist under Section 125(1)(i) of the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) has cleared the first hurdle — but not the last. The Singapore High Court retains a residual discretion to refuse the petition even where grounds are made out. This 2026 guide explains how that discretion is exercised, the principles the courts apply, and what petitioners and respondents need to address.
The statutory framework
Section 125(1) IRDA lists the grounds on which the High Court “may” order a company to be wound up. The word “may” is the source of the court’s discretion. Even where the petitioner proves, for example, deadlock between shareholders, loss of substratum or a breakdown in mutual trust and confidence (as covered in our companion article on mutual trust and confidence), the court can still decline to make the order.
The discretion is reinforced by Section 125(2) IRDA, which empowers the court to make “any other order” the court thinks fit — including dismissing the petition or making an order under Section 216 Companies Act for relief in lieu of winding up.
The leading authorities
The Singapore Court of Appeal in Sim Yong Kim v Evenstar Investments Pte Ltd [2006] SGCA 28 and the High Court in Re Lim Soon Huat have consistently said that just and equitable winding up is a remedy of last resort. Courts will explore alternative remedies before granting the order, because winding up is irreversible and harms creditors, employees and minority shareholders alike.
The Court of Appeal has also emphasised that the discretion is to be exercised “on settled principles, not at large” — meaning petitioners and respondents can predict how the court will approach common fact patterns.
When will the court refuse?
1. An alternative remedy is available
If the petitioner has access to an oppression remedy under Section 216 Companies Act that would adequately address the grievance, the court may refuse the petition. A buy-out order, an injunction against the controlling shareholder or an order regulating the company’s affairs are all alternatives the court can craft.
2. The petitioner has unclean hands
A petitioner whose own conduct contributed to the breakdown — for example by repudiating a shareholders’ agreement first, or by withholding information from the board — may be refused relief on equitable principles. The maxim “he who comes to equity must come with clean hands” applies.
3. Delay or acquiescence
Where the petitioner has waited too long to bring the petition, or has acquiesced in the very conduct they now complain of, the court may treat that as a bar to relief. Delay does not automatically defeat a petition, but it can shift the balance against winding up.
4. Winding up would unfairly prejudice creditors or minority shareholders
If the petitioner is a 50/50 shareholder seeking deadlock relief, but winding up would cause significant value destruction (e.g. the company has illiquid assets that cannot be fairly realised in liquidation), the court may prefer a buy-out order valuing the company on a going-concern basis.
5. The petition is an abuse of process
Where the real purpose of the petition is to pressure the company into a commercial settlement on a disputed debt, the court will strike out the petition for abuse — as with petitions on disputed debts that should properly go to civil action.
The “fair offer” principle
Singapore courts have imported the English principle from Re Bird Precision Bellows Ltd [1986] Ch 658: if the respondent makes a fair offer to buy out the petitioner at a price that properly values their shareholding, the court will normally refuse winding up. The reasoning is that the petitioner’s grievance — being locked into a company they cannot exit — is met by giving them the exit they need without destroying the company.
To qualify as a “fair offer,” the respondent must usually:
- Offer to value the shares without minority discount;
- Pay for an independent valuer (typically a Big Four accounting firm);
- Pay the petitioner’s reasonable costs to date; and
- Provide proof of funds or a banker’s undertaking.
Step-by-step: how the court approaches the discretion
| Stage | What the court considers |
|---|---|
| 1 | Are the just and equitable grounds made out on the evidence? |
| 2 | Has the respondent offered a fair buy-out (or other adequate remedy)? |
| 3 | Does the petitioner have clean hands? |
| 4 | Would winding up cause disproportionate harm to creditors, employees or other shareholders? |
| 5 | Is a Section 216 order or other tailored relief a better fit? |
| 6 | Final balancing: is winding up just and equitable in all the circumstances? |
Documents required
| Document | Purpose |
|---|---|
| Originating Application (HC/OA) | Initiates the petition under O. 32 ROC 2021 |
| Supporting affidavit | Sets out the grounds and exhibits the documents relied on |
| Affidavit of service | Proves service on the company and any other respondents |
| Advertisement | Required for winding up petitions — see our advertising guide |
| Respondent’s affidavit in reply | Often contains the fair offer or alternative-remedy proposal |
Timeline and costs
| Stage | Indicative timeline |
|---|---|
| Filing to first hearing | 6–10 weeks |
| Substantive hearing | 3–8 months from filing, depending on contested issues |
| Judgment | 1–3 months after substantive hearing |
| Typical costs (legal) | S$80,000 – S$250,000 if contested through to judgment |
What happens if the petition is refused
Where the court refuses a winding up petition but accepts that the petitioner has been treated unfairly, the court can make any of a wide range of orders under Section 216 Companies Act: a buy-out at a court-fixed price, an injunction restraining further oppressive conduct, an order regulating the company’s affairs, or even an order varying the constitution.
Where the court is not satisfied that any grievance is made out, the petition is simply dismissed with costs to the respondent.
FAQ
Can the court refuse the petition even if all parties consent to winding up?
Yes — winding up is a public-interest remedy and the court can refuse if creditors or other stakeholders would be prejudiced. In practice, consent petitions are usually granted unless something obvious is wrong.
Can the petitioner appeal a refusal?
Yes — appeals from the General Division of the High Court lie to the Appellate Division of the High Court (or, in some cases, directly to the Court of Appeal). The appeal is by way of rehearing on the existing record.
Does the court’s discretion apply to creditor petitions?
The discretion exists but is narrower. Where a creditor has proved unpaid debt and the statutory grounds, the court generally orders winding up unless there is genuine dispute on the debt or special circumstances. See our creditor petition guide.
What if the respondent’s “fair offer” is rejected?
If the petitioner unreasonably rejects a fair offer, the court can refuse the petition and order the petitioner to pay costs. The fair offer principle is a strong incentive for genuine settlement.
What if both sides want winding up but disagree on terms?
The court can order winding up but appoint a liquidator with directions tailored to the parties’ concerns — for example, appointing a specific firm or requiring particular distributions.
Where can I read the statutory provisions?
The IRDA is available on Singapore Statutes Online at sso.agc.gov.sg. The Singapore Courts’ practical guidance is at courts.gov.sg. For litigation-process explanations, see justfollowlaw.com.
Need Help With This Matter?
If your company is facing this situation, Raffles Corporate Services can assist with the groundwork — ACRA filings, compliance documentation, and coordinating with experienced Singapore law firms. For matters requiring court proceedings, we work with a panel of experienced Singapore law firms who offer cost-effective and efficient legal service and advice.
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This article is for general information only and does not constitute legal advice. For advice specific to your situation, please consult a qualified Singapore Advocate and Solicitor.
— The Editorial Team, Raffles Corporate Services