Despite evidence that a defendant knew he was facing potential proceedings which could bankrupt him, at the time he transferred assets to his son, the Court of Appeal held that this was not sufficient to find that the transfer was made for the purpose of defrauding creditors. Consequently, the transfer could not be unwound under s423 Insolvency Act 1996: JSC BTA Bank v Mukhtar Ablyazov, Madiyar Ablyazov [2018] EWCA Civ 1176.

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The High Court has held that a claim by a creditor under section 423 of the Insolvency Act 1986 does not fall within the jurisdictional gateway permitting service out of the jurisdiction at common law for claims “under an enactment which allows proceedings to be brought”: Orexim Trading Limited v Mahavir Port and Terminal Private Limited [2017] EWHC 2663 (Comm).

As a result of the Recast European Insolvency Regulation (“REIR”), which applies to insolvency proceedings commenced since 26 June this year, insolvency practitioners in EU Member States have been given more freedom to commence insolvency-related claims in jurisdictions other than the jurisdiction of the insolvency proceedings (ie the court proceedings by which the affairs of the insolvent company are administered – eg liquidation or administration).

In a recent judgment, the Court of Justice of the European Union (CJEU) confirmed the extent to which an English law governed contract can be subject to the transaction avoidance provisions of the insolvency law of other another member state if one of the counterparties enters into insolvency in that member state (eg Italy): Vinyls Italia SpA v Mediterranea di Navigazione SpA C-54/16 (8 June 2017).

On February 1, 2017, the Supreme Court of Singapore and the U.S. Bankruptcy Court for the District of Delaware announced that they had formally implemented Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters (the "Guidelines"). The U.S. Bankruptcy Court for the Southern District of New York adopted the Guidelines on February 17, 2017.

The Act is a groundbreaking development in Singapore's corporate rescue laws and includes major changes to the rules governing schemes of arrangement, judicial management, and cross-border insolvency. The Act also incorporates several features of chapter 11 of the U.S. Bankruptcy Code, including super-priority rescue financing, cram-down powers, and prepackaged restructuring plans. The legislation may portend Singapore's emergence as a center for international debt restructuring.

In Short:

The Action: Courts in Singapore and the states of New York and Delaware have formally implemented Guidelines for Communication and Cooperation between Courts in Cross-border Insolvency Matters.

The Motivation: The Guidelines were developed to improve the efficiency and effectiveness of cross-border insolvency proceedings and to encourage coordination and cooperation among relevant courts.

Looking Ahead: Expect the Guidelines to be implemented in other significant jurisdictions.

On March 10, 2017, Singapore's Parliament approved the Companies (Amendment) Bill 2017 ("Act") to enhance the country's corporate debt restructuring framework. The Act was assented to by President Tony Tan Keng Yam on March 29, 2017, and became effective after it was published in the Singapore Government Gazette on March 30, 2017.

For the benefit of our clients and friends investing in European distressed opportunities, our European Network is sharing some current developments.

Recent Developments