In the latest decision of the Hong Kong court to consider the interplay between arbitration clauses and winding-up or bankruptcy petitions, on 22 May 2023, the Hon. Linda Chan J (the Judge) made a winding-up order against Simplicity & Vogue Retailing (HK) Co. Limited (the Company) and rejected the Company’s argument that the dispute over the underlying debt should be referred to arbitration.
Martin Rogers, Jonathan K Chang and Clement Sung, Davis Polk & Wardwell
This is an extract from the 2024 edition of The Asia-Pacific Arbitration Review. The whole publication is available here.
This is an Insight article, written by a selected partner as part of GAR's co-published content. Read more on Insight
APAC and Africa are diverse and multifaceted regions. APAC is set to contribute 70% of global growth whilst Africa is showing remarkable resilience in many sectors. We’ll learn from our members what this means for those looking to do business in these regions.
APAC
Two recent judgments from different Australian courts have considered circumstances in which insolvency disputes can (or cannot) be arbitrated in accordance with pre-existing arbitration agreements. In particular, the decisions address the following two key issues:
- when certain insolvency claims can be arbitrated; and
- when a third party can participate in arbitral proceedings either claiming or defending ‘through or under’ a party to the arbitration agreement.
Key takeaways
The original version of this article was first published in the Trilegal Quarterly Roundup.
Key Developments
1. Delhi High Court pierces the corporate veil to make non-parties to an arbitration liable for the arbitral award
“within three (3) business days of termination of the mediation, the Debtors shall publicly disclose the terms of the last offers extended by each of the Mediation Parties, respectively.”[Fn. 1]
Say what!?
Whoever heard of such a thing—a requirement that the “last offers” of the mediating parties be publicly disclosed?
And this requirement is in a “consensual” mediation order entered in the Genesis Global Holdco, LLC, bankruptcy.[Fn. 2]
Context
Here’s the context.[Fn. 3]
It’s a defense v. offense distinction:
- Defense—An objection and counterclaim designed to diminish or zero-out a proof of claim in bankruptcy is not subject to arbitration; but
- Offense—An objection or counterclaim designed to do anything more . . . can be compelled to arbitrate.
That’s the essence of a recent opinion in Johnson v. S.A.I.L. LLC (In re Johnson), Adv. No. 22 -172, Northern Illinois Bankruptcy Court (issued March 28, 2023; Doc. 18). What follows is a summary of that opinion.
Facts
Below, please find some information on the main private law amendments introduced pursuant to Law on the Amendment of the Enforcement and Bankruptcy Law and Certain Laws (the "Law"), published in the Official Gazette dated 5 April 2023.
The Latest Amendments to the Enforcement and Bankruptcy Law
April, 2023 For Private Circulation - Educational & Informational Purpose Only A BRIEFING ON LEGAL MATTERS OF CURRENT INTEREST KEY HIGHLIGHTS ⁎ Bombay High Court: Arbitration clause can be invoked by assignee of rights under contract. * NCLT: Dissenting secured creditor cannot be treated higher than other creditors under Section 53 of the IBC just because they enjoy security interest. * Bombay High Court: “One-ness of interest”- the touch-stone for defendant to be transposed as plaintiff in case of part abandonment of suit claim. April, 2023 http://www.vaishlaw.com/ I.
La 13e édition annuelle de la publication Mining in the Courts fournit une mise à jour complète sur les développements juridiques concernant le secteur minier (disponible en anglais seulement). Cette publication comprend un résumé sur bon nombre des causes les plus importantes, ainsi que des articles offrant un aperçu sur les tendances juridiques actuelles et les défis auxquels l’industrie devra faire face au cours de la prochaine année.
Voici certains des sujets qui y sont abordés :