In a recent landmark judgment, the Singapore High Court has ruled that it has the power to alter priorities between maritime claimants in “exceptional circumstances”.

In THE POSIDON (2017) SGHC 138, Piraeus Bank (Bank) commenced two mortgagee actions in Singapore, arising from the ship owner’s default under a loan agreement, and arrested two vessels, THE POSIDON and THE PEGASUS. These vessels were subsequently sold by judicial sale.

SNDA Basics

A subordination, nondisturbance and attornment agreement (“SNDA”) is commonly used in real estate financing to clarify the rights and obligations between the owner of rental property (i.e., the borrower), the lender that provides financing secured by the property, and the tenant under a lease of the property in the event the lender forecloses or otherwise acquires title to the property. As suggested by its name, an SNDA has the following three primary components:

The new United Arab Emirates (UAE) Insolvency Law (Federal Law No.9 of 2016) (Insolvency Law) was published in the UAE Gazette on 29 September 2016 and came in to force three months later on 29 December 2016. The Insolvency Law is a federal law that applies to all seven emirates comprising the UAE. The initial view from market participants is that by replacing the old insolvency law, which placed a greater emphasis on creditor protections and formal bankruptcy proceedings alongside criminal penalties, the Insolvency Law is an overdue but welcome development.

At first glance, it seems that cross-border insolvencies between the UK and EU are likely to become more time-consuming, complex and expensive post-Brexit. However, the situation may not be as dire as it first appears due to the existence of alternative legislation and the exemptions to the EU legislation. As with other areas of law, when it comes to insolvencies much will depend on what steps are taken to maintain the current arrangements with the EU or whether they fall away altogether.

Briefings

The latest victims of the prolonged downturn in the offshore, marine and oil and gas sectors, Singapore-based Ezra Holdings and EMAS, have sought Chapter 11 protection with the US bankruptcy courts. Whilst it is as yet unclear whether these companies will “go under”, this briefing sets out the latest events and key issues affecting operators who may find themselves dealing with counterparties in similar insolvency proceedings and financial difficulties.

Background

The United States Supreme Court (the “Court”) recently issued a long-awaited decision in Czyzewski v. Jevic Holding Corp. (“Jevic”), which limits the use of “structured dismissals” in Chapter 11 bankruptcy cases, requiring structured dismissals pursuant to which final distributions are made to comply with the Bankruptcy Code’s priority scheme, or the consent of all affected parties to be obtained.1

What is a Structured Dismissal?

Privilege – post Hastie

The New South Wales Court of Appeal decision in Hastie Group (In Liq.) v Moore1 underlines the view that disclosure of the mere existence of privileged documents to third parties will not necessarily waive privilege.

Key Facts

The liquidators of Hastie Group Ltd (In Liq.) (Hastie) had obtained orders extending the time for service of a statement of claim alleging professional negligence against Hastie’s Auditor, Deloitte (Auditor), between 2008 and 2010.

This case arose from an underlying claim by a company called Mploy against Denso, which resulted in an adverse costs order against Mploy.

After the SAM HAWK decision in September 2016 restored the status quo in the recognition of foreign maritime liens in Australia (see our briefing http://www.hfw.com/Arrest-of-the-SAM-HAWK-October-2016) two Federal Court decisions in November 2016 bring the year towards a close with the Federal Court’s jurisdiction and application of the Admiralty Act being confirmed on established and predictable grounds.

The new Companies Ordinance (Cap 622) enacted in 2012 was the first part of the effort to rewrite the statutory provisions relating to the incorporation and operation of companies. The remaining task of updating the winding up and insolvency provisions was completed in May 2016, when amendments to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap 32) (CWUMPO) were passed into law. Although the implementation date of these amendments are to be announced by the government, it is time to look at the significant changes ahead.