Recognising foreign trustees after termination of proceedings? (Sanko Steamship Co v Glencore)

Recognising foreign trustees after termination of proceedings? (Sanko Steamship Co v Glencore)

What jurisdictional issues arose in the Sanko Steamship dispute and what can lawyers learn from them? Andrew Shaw, a barrister at South Square Chambers, says the case illustrates the the importance of ensuring that any applications made under the Cross-Border Insolvency Regulations 2006 are heard while the foreign proceedings are still in progress.

Original news

Sanko Steamship Co Ltd and another v Glencore Ltd [2015] EWHC 1031 (Ch)

The proceedings concerned a Japanese company, which had been engaged in insolvency proceedings in Japan for the purpose of effecting a reorganisation. Those proceedings had been recognised in England as the foreign main proceedings in respect of the company, but they had later come to an end. The company and its director applied, under the Cross-Border Insolvency Regulations 2006, SI 2006/100, Sch 1, art 17(4) (CBIR), for the continued recognition of the director’s status as foreign representative of the company, and, under CBIR, Sch 1, art 21(2), for payment to the company of the funds held in the English court, pursuant to orders made in the Admiralty Court in England, following the sale of the company’s vessel. An interested party had filed a request for a caution against the release of the proceeds in the sum of US$3.85m. The Companies Court, among other things, rejected the applicants’ submission that the main proceedings had only partly ceased to exist because the implementation of the reorganisation plan was ongoing. The fact that the plan had not been fully implemented did not serve to render the Japanese proceedings ongoing. Further, leaving the funds in court in England seemed likely to tolerate, if not encourage, delay, which was itself a hallmark of injustice.

What were the jurisdictional factors and how did the issue arise?

The dispute between the parties originated in the late delivery of a cargo of silicon manganese to New Orleans in 2012. The cargo was being transported on the MV Sanko

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About the author:

Stephen qualified as a solicitor in 2005 and joined the Restructuring and Insolvency team at Lexis®PSL in September 2014 from Shoosmiths LLP, where he was a senior associate in the restructuring and insolvency team.

Primarily focused on contentious and advisory corporate and personal insolvency work, Stephen’s experience includes acting for office-holders on a wide range of issues, including appointments, investigations and the recovery and realisation of assets (including antecedent transaction claims), and for creditors in respect of the impact on them of the insolvency of debtors and counterparties.