The UAE government has issued Federal Decree Law No. 9 of 2016 on Bankruptcy (the New Law). The New Law was published in the Official Gazette with a publication date of 29 September 2016 and will come into force three months later on 29 December 2016.
Key Points
A company in liquidation appealed against a decision that its claim against the directors, for breach of fiduciary or statutory duty in relation to distribution in specie of the claimant company’s shareholding in another company, was time-barred.
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The fact that the receiver appointed for Hanjin, Mr Tai-Soo Suk, quickly took steps to extend to the UK the protection afforded by the Korean rehabilitation proceedings, was of little surprise, as England is likely to be the forum where the majority of creditors will have to bring proceedings to recover debts or claim damages for breach of contract.
The U.A.E and Republic of South Korea have not entered into a bi-lateral treaty under which they are obliged to recognise each other's court orders or judgments. The U.A.E rarely recognises/enforces the judgment of foreign courts where there is no such treaty in place
The collapse of Hanjin, the world's seventh largest shipping container carrier, and its immediate impact in South Africa and its shipping industry, remains to be seen. As far as we can ascertain, there has been no attempt to date to apply to a South African Court for the recognition of the Korean rehabilitation proceedings.
On 2 September 2016, Hanjin filed a petition under Chapter 15 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey, seeking recognition of its Korean rehabilitation proceedings as a "foreign main proceeding." Hanjin also sought provisional and final relief to prevent creditors from taking enforcement actions against Hanjin's interests within the jurisdiction of the United States.
In a landmark judgment on 9 September 2016, the High Court of Singapore exercised its inherent jurisdiction to grant, on an ex parte basis, interim orders for the recognition of Hanjin's Korean rehabilitation proceedings in Singapore.
The effect of Hanjin's Korean rehabilitation proceedings in France has been rather limited.
The Chinese Maritime Courts are not obliged to recognise and/or enforce foreign courts' orders, therefore Hanjin's creditors could still arrest Hanjin-related vessels in China if they have maritime claims (recognised under Chinese law) against the registered owners and/or bareboat charterers of the said vessels.
Container leasing companies and bunker suppliers could also file applications in order to request that the corresponding Chinese Maritime Courts order Hanjin to return the leased containers to Hanjin or the bunkers supplied to Hanjin in certain circumstances.