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Those that attended the IP seminar earlier this year will have hopefully reflected upon the wider aspects of the “means” available to seek and obtain recognition and reciprocity of insolvency proceedings e.g. UNCITRAL, EC Regulation, common law and/or Section 426.
The number of cases involving such issues continues to occupy the Court’s time, including recently:-
1. HSBC Bank Plc v Tambook Jersey Limited CA 2013
The Court held that although the company concerned had its COMI in Jersey, where there was no power to appoint an administrator, at the request of the Court in Jersey, the English Court on appeal held that UK Courts have jurisdiction to grant assistance to a foreign Court under Section 426, even where formal insolvency proceedings of any kind had not been opened in that jurisdiction. Please note, however, that Section 426 has limited application in respect of the number of jurisdictions willing to grant reciprocity.
NB Conversely in Re Estates and General Developments Limited JRC 2013, although a fixed charged receivership is not a form of insolvency proceeding available in Jersey, the Royal Court of Jersey accepted that the interests and assets of the Jersey COMI company had wider application and effect, such that the Court should accede to the request of the High Court of England under Article 49 of the Bankruptcy Law of Jersey in order to recognise the authority of the receivers with regard to property in Jersey.
2. The EC Regulation distinguishes between main and secondary proceedings, the latter being currently restricted to winding-up proceedings. The ECJ in “Bank Handlowy (2012)” dealt with potential difficulties between main and secondary proceedings, where the company’s COMI was in one jurisdiction, and its main assets in another. The rule currently remains that main proceedings maintain supremacy, even where such main proceedings include “protective” proceedings, unknown to the jurisdiction of the secondary Court.
If you would like further information on cross border issues, please contact Chris Millar, either by telephone on 01306 502225 or by email email@example.com