When a company is being wound up in a given jurisdiction, can an anti-suit injunction be sought against relevant creditors or members to prevent them from pursuing proceedings in another jurisdiction with a view to securing priority in the liquidation?

This was the issue for the Privy Council to decide in Stichting Shell Pensioenfonds v Krys and another (British Virgin Islands) (26 November 2014), in what is an interesting instance of the application of anti-suit injunctions within the insolvency framework.

Facts

As the bankruptcy of OW Bunker has shown, insolvency in a shipping context can cause significant, far reaching and immediate legal uncertainty. The interaction of insolvency procedures, jurisdictional issues, and the complex web of contractual relationships involved in shipping insolvencies creates unique practical and legal challenges. In this Briefing, we consider from a Hong Kong perspective some of the practical issues that commonly arise.

Insolvency in the Hong Kong Courts

Under the Bankruptcy and Insolvency Act1, trustees have considerable discretion to administer a bankrupt’s estate in an expedient manner. However, the British Columbia Court of Appeal recently confirmed that trustees must exercise such discretion within the limits of relevant statutory provisions and common law principles.

I.  Introduction

Canadian restructuring and liquidation legislation provides struggling companies and bankruptcy trustees with powerful tools to restructure their affairs and maximize value for stakeholders. For example, in the right circumstances valuable contracts can be assigned, on notice to the counterparties, to buyers prepared to pay well for the rights conferred under the contracts. In such circumstances, the counterparty’s bargained for right to withhold its consent to an assignment can be effectively overridden by court order.

On 9 July 2013, the European Commission adopted a proposal for a new Directive on package travel and assisted travel arrangements to replace the Package Travel Directive¹ (the Directive) which has been long thought to have become outdated in the face of the growth of the internet and the “dynamic packaging” industry. Following extensive consultation with industry representatives and trade bodies, an amended version of the Commission’s proposal was adopted by the European Parliament on 12 March 2014 (the Proposed Directive).

Bankruptcy trustees should clearly communicate to the bankrupt their intent to make a claim against the non-exempt equity in the bankrupt's property at the time of the assignment into bankruptcy, according to the recent decision of the British Columbia Supreme Court in Re Barter.1 A failure to communicate such an intent may result in the trustee being unable to realize the non-exempt equity or, as in Re Barter, the absolute discharge

In the recent decision of the Alberta Court of Appeal in Orion Industries Ltd. (Trustee of) v Neil's General Contracting Ltd.¹("Orion Industries") the Court interpreted and applied the rule added as part of the 2009 amendments to section 95(2) of theBankruptcy and Insolvency Act ("BIA") which deals with preferential payments. That amendment provides that evidence of pressure by a creditor is inadmissible to support a preferential payment.

InRe Bock inc.¹, a recent case decided under the Companies' Creditors Arrangement Act ("CCAA"), the Superior Court of Quebec made an order reviving a dealership agreement that was purported to be validly terminated by the manufacturer prior to the commencement of any insolvency proceedings.

On June 1, 2013, British Columbia's new Limitation Act (the "New Act")¹ came into force, changing the limitation periods for filing civil lawsuits in British Columbia.