Malaysian-based AmBank(M) Berhad sought to bankrupt Raymond Yong after he failed to settle the debt for underwriting loans to two Malaysian firms.

In throwing out the bank's case, the Court of Appeal ruled that AmBank needed to have a valid judgement in its possession that could be enforced in Singapore.

Although the bank obtained a judgement in Malaysia against Mr Yong in 1988, it only applied to register the judgement for enforcement here in 1994.

For almost 12 years after that application, AmBank took no steps to enforce the judgement. The time lapse made the judgement invalid for enforcement by the time the bank applied to make Mr Yong a bankrupt in 2006, said the court.

The application could not therefore proceed without the bank seeking permission from the court - a procedure known as seeking leave of the court.

The deadline for a valid judgement to be enforced is six years and after this, the applicant has to return to court and convince it why it had delayed the case for so long. Only then will the court give leave for the claim to be pursued.

The bank did not do so but argued that its claim, having been registered in Singapore was 'capable' of being enforced and that it did not have to ask for 'leave from the court' to file bankruptcy on Mr Yong.

AmBank's lawyers also said the referred rules of court did not apply to bankruptcy proceedings.

The Court of Appeal in the grounds for its decision published on Wednesday rejected the bank's claim.

Read the full report in Thursday's edition of The Straits Times.