Lifting a stay under Cross-Border Insolvency regs (Ronelp Marine v STX Offshore & Shipbuilding)

Lifting a stay under Cross-Border Insolvency regs (Ronelp Marine v STX Offshore & Shipbuilding)

Barristers Stephen Atherton QC and Charlotte Tan of 20 Essex Street review Ronelp Marine Ltd and other companies v STX Offshore & Shipbuilding Co Ltd—in which the High Court considers whether, and the circumstances where, it should lift a stay made under the Cross-Border Insolvency Regulations SI 2006/1030 to allow litigation proceedings to be continued in England by a creditor with an unsecured monetary claim.

Original news

Ronelp Marine Ltd and other companies v STX Offshore & Shipbuilding Co Ltd [2016] EWHC 2228 (Ch), [2016] All ER (D) 77 (Oct)

The Chancery Division granted the claimant Liberian companies, which were buyers under shipbuilding contracts, permission to continue an action brought by them against the first defendant Korean shipbuilding company (STX), under a guarantee. STX had entered into a Chinese insolvency process and Korean rehabilitation proceedings concerning STX had been recognised in the English court as the 'foreign main proceeding', under the Cross Border Insolvency Regulations 2006 (CBIR 2006), SI 2006/1030. The court held that granting permission for the continuation of the Commercial Court action would not impede the achievement of the rehabilitation plan.

What are the key takeaways?

The judgment sets out a framework for considering applications to lift stays imposed under the CBIR 2006. Where a stay is imposed in the terms which would be applied in a domestic administration, and where the creditor pursues an unsecured money claim, it will only be in ‘exceptional’ cases that the stay may be lifted (as would be the case in a purely domestic scenario). Sufficiently exceptional circumstances may be found to exist where the case in question raised particularly difficult and/or unsettled questions of English law which could be more suitably determined by an English court. Other relevant factors might include (as they did in this case) how advanced the English proceedings were and whether determination in England would be achieved more quickly than in the foreign insolvency and at what cost.

How did the issue arise?

The applicants were

Subscription Form

Related Articles:
Latest Articles:

Already a subscriber? Login
RELX (UK) Limited, trading as LexisNexis, and our LexisNexis Legal & Professional group companies will contact you to confirm your email address. You can manage your communication preferences via our Preference Centre. You can learn more about how we handle your personal data and your rights by reviewing our  Privacy Policy.

Access this article and thousands of others like it free by subscribing to our blog.

Read full article

Already a subscriber? Login

About the author:
Kathy specialises in restructuring and cross-border insolvency. She qualified as a solicitor in 1995 and has since worked for Weil Gotshal & Manges and Freshfields. Kathy has worked on some of the largest restructuring cases in the last decade, including Worldcom, Parmalat, Enron and Eurotunnel.