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 interim orders included a restraint of all pending, contingent or fresh proceedings and a stay of all present proceedings against Hanjin and its Singapore subsidiaries, and expressly included all enforcement or execution actions against the vessels beneficially owned or chartered by Hanjin and its subsidiaries (excluding the arrest of the Hanjin Rome). The interim orders will operate pending a further inter partes hearing, where interested parties will have the opportunity to address the Court.
The Singapore High Court also elaborated on the factors that the Singapore Courts will need to take into account when determining whether they should recognise and/or give effect to foreign insolvency or rehabilitation proceedings. These factors include:
The connection of the company to the forum in which the rehabilitation proceedings are taking place and to the place of rehabilitation;
What the rehabilitation process entails, including its impact on domestic creditors, and whether it is fair and equitable in the circumstances; and
Whether there are any strong countervailing reasons against recognition of the foreign rehabilitation proceedings.
One notable feature of the Singapore High Court's orders was its decision to extend assistance even to the point of preventing the arrest of ships of the Hanjin fleet, not directly owned by Hanjin or its Singapore subsidiaries (excluding existing arrest proceedings involving the Hanjin Rome). This is an extremely novel ruling, appearing to depart from previous authorities, and will likely be the subject of challenge by interested parties.
The next hearing is scheduled to take place in the week of 31 October 2016.
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