Judges from 10 jurisdictions met in October 2016 in Singapore for the inaugural Judicial Insolvency Network Conference.

High on the agenda of the esteemed conference participants was the preparation of Draft Guidelines to provide practical assistance for Judges and insolvency practitioners alike in dealing with difficult issues which cross-border insolvencies and restructurings commonly face.

The Judicial Insolvency Network (JIN) conference aims to encourage communication and cooperation amongst national courts.

From 10 to 11 October, Singapore hosted the inaugural JIN conference. JIN is a network of insolvency judges from around the world whose aim is to encourage communication and cooperation amongst national courts by pulling together best practices in cross-border restructuring and insolvency to facilitate cross-court communication and cooperation.

The English Court has agreed to lift the automatic stay on proceedings under the Cross Border Insolvency Regulations 2006 (“CBIR”) against STX Offshore & Shipbuilding Co Ltd (“STX”) which had entered into rehabilitation proceedings in Korea.

Facts

The shipping industry was recently in the headlines when on 31 August 2016 Hanjin Shipping Co filed for bankruptcy protection in the Seoul Central District Court. Hanjin was South Korea’s biggest container carrier and the seventh largest in the world.

The latest development in what has been a long-running (and expensive) cross-border insolvency proceeding involving Nortel (see our June 2015 and September 2015 legal updates for previous instalments) is a settlement between:

The International Centre for Settlement of Investment Disputes (ICSID) has recently rendered a decision in a dispute between the Portuguese investor Dan Cake and Hungary. The dispute was based on a bilateral investment agreement between Portugal and Hungary concluded in 1992. In its decision, the Tribunal declared Hungary liable for the breach of the investment agreement. The Tribunal will decide on the amount of damages at a later date.

Dan Cake versus Hungary

The Board of Governors of the Federal Reserve System proposed a rule that would require US global systemically important banking institutions to amend their contracts for certain common financial transactions to preclude the immediate termination of such contracts if a firm enters bankruptcy or a resolution process. Relevant contracts – termed “qualified financial contracts” – that would have to be amended include those used for derivatives, securities lending and short time financing such as repurchase agreements.

Introduction

On 3 June 2016, the Hong Kong Government gazetted the Companies (Winding Up and Miscellaneous Provisions) (Amendment) Ordinance 2016 (“Amendment Ordinance”). The date of commencement of the Amendment Ordinance will be appointed by the Secretary for Financial Services and the Treasury by notice published in the Gazette.

Background

Key points

• Automatic stays on proceedings are imposed by Article 20 of the UNCITRAL Model Law (and mirrored in s.130(2) IA 1986)
• The case reinforces the principle that automatic stays are designed to avoid the unnecessary expenditure of assets otherwise available for distribution amongst creditors

The facts