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 insolvency of Hanjin Shipping (Hanjin), the world's seventh largest container line, is likely to have a significant impact throughout the maritime sector. In this briefing we provide an overview of some of the potential consequences of Hanjin's insolvency and which parties will be most affected by this development.
Background
Seoul Central District Court, or the Korean bankruptcy court handling rehabilitation proceedings of Hanjin Shipping Co., Ltd. (Hanjin Shipping) recently took several noteworthy measures. Pursuant to the Court’s decision, the fate of Hanjin Shipping will not be unraveled until February next year. The upcoming dates and deadlines for extended time pursuant to the aforementioned decision are as follows:
- Extended deadline for the claim inspection period: December 5, 2016
This is the second instalment in a series on the US cross-border insolvency statute, Chapter 15 of the Bankruptcy Code, which took effect 11 years ago (for further details please see "Chapter 15 at 11: Bankruptcy Code's cross-border insolvency law approaches 11th anniversary").
On September 9, 2016, Hanjin Shipping Co. won a ruling protecting its assets in the U.S. against creditors, while the shipping line proceeds with its reorganization in South Korea. Hanjin filed for relief under Chapter 15 of the Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey (U.S. Bankruptcy Court Judge John K. Sherwood in Newark, N.J.).
News of the bankruptcy of one of the world’s largest ocean carriers, Hanjin Shipping Co., Ltd. (Hanjin), continues to have a ripple effect globally, creating legal entanglements and disrupting company supply chains. Some ports, terminals, stevedores, truckers and rail carriers have refused to service Hanjin vessels and containers for fear of not getting paid.
On September 1, 2016, a rehabilitation procedure was commenced in the Seoul Central District Court in respect of Hanjin Shipping Co., Ltd (Hanjin). This action followed many months of discussions between Hanjin and its creditors (both local and international) designed to reach a consensual restructuring, as a result of which various creditors had voluntarily agreed to postpone exercising claims. Such agreement was eventually suspended on August 30, 2016 following notice to Hanjin that such creditors were unable to continue their support.
Background
In 2009, a certain savings bank (“S Savings Bank”) issued subordinated bonds (the “Subordinated Bonds”). Subsequently, the Financial Services Commission designated it as an insolvent financial institution and issued a management reform order, which included the suspension of its business. Eventually, bankruptcy proceedings were commenced against S Savings Bank in around 2011, and the representative director of S Savings Bank was indicted for financial statement fraud and eventually found guilty.
Since the inauguration of electronic litigation or e-litigation (hereinafter “e-litigation”) services for patent cases in April 2010, the Korean Supreme Court has gradually expanded the scope of availability of e-litigation services to civil, family law and administrative cases, and provisional attachment and injunction cases. With the completion of the e-litigation system for rehabilitation and bankruptcy cases, those proceedings and their ancillary proceedings can be administered electronically from April 28, 2014, as described below.