The true effects of the events of the last few days have yet to be seen. With the mainstream political parties acting like participants in a ‘Compose a Greek Tragedy’ competition, a government unlikely to exercise any meaningful executive functions until autumn (at least), the currency and financial markets in turmoil and the future uncertain on a range of factors, it is tempting to succumb to a condition of inaction whilst waiting to see how the cards fall.

First published in the International Arbitration 1/3LY, Issue 7

Insolvency law contains summary processes for dealing with claims and protections against certain proceedings commencing or continuing. There has been some debate, and recent case law, concerning the primacy of these rules over agreements to arbitrate. In the following article, we look at what the current position is under English law and beyond.

General position under English law

The current litigation landscape for professionals in Hong Kong is relatively benign: but is this the lull before the storm? Accurate records are kept of all actions commenced in the Hong Kong High Court, which deals with claims of over HK$1 million. The graph above shows the number of claims begun by writ each year over the last 15 years. This data covers all claims, not just those against professionals, but gives an indication of the general litigation trends.

In the recent case of Constantia Insurance Company Limited v Master of the High Court, Johannesburg (23968/2015) [2016] ZAGPJHC 121 the High Court considered whether the provisions of the Insolvency Act, No 24 of 1936 (Act) permit the Master to consider liquidators’ additional submissions in response to a creditor’s substantiation of its claim.

The Supreme Court of Appeal (SCA) in Swart v Starbuck & Others 2016 ZASCA 83, reaffirmed the necessary authorisation for a trustee of an insolvent estate to sell an insolvent estate’s immovable property.

Mr Swart’s estate was finally sequestrated on 1 November 2005. On 24 January 2006, three provisional trustees were appointed by the Master of the High Court. At the time of Mr Swart’s provisional sequestration, he owned certain immovable properties (Properties).

On 27 May 2016, South Korea's STX Offshore & Shipbuilding Co. ("STX OS"), once the country's fourth-largest shipbuilding firm by revenue, filed for court-supervised rehabilitation, in the Seoul Central District Court.

FI and D&O Since our last update, there have been significant developments in the FI and D&O landscape. November saw the first ever UK deferred prosecution agreement (DPA) announced between the SFO and Standard Bank. The DPA process has been available but unused since 2014 so the judgment and the SFO’s comments thereafter provided some much needed guidance on what the process involved. Significantly, weight was placed on Standard Bank’s early self-reporting and cooperation.

The Act, which received Royal Assent as long ago as 25 March 2010, is finally due to come into force on 1 August 2016. It has the intention of allowing third parties to make claims directly against liability insurers in insolvency situations.

1930 Act

Facility agreements ordinarily oblige a borrower to prepay the facility on the occurrence of certain events, including, if a borrower receives insurance proceeds or asset sale proceeds during the loan term. The rationale for this is that lenders wish to use this unexpected windfall to mitigate the risk of non-payment. This is also the approach of the Loan Market Association (LMA) in its standard facility agreements.

Employment contracts were previously deemed to be suspended on the date of liquidation, being the date that the application for liquidation of the company is presented and issued at court in terms of s348 of the Companies Act, No 61 of 1973 (Old Companies Act). However, this position has since changed.