Law firm Clyde & Co has supplied a country-by country analysis of the legal implications of the Hanjin bankruptcy protection situation. IMN will provide a summary of one affected country each day for the next two weeks.
Tai-Soo Suk, the receiver appointed for Hanjin, quickly took steps to extend to the UK the protection afforded by the Korean rehabilitation proceedings, it taking effect on September 6th.
This, said Clyde, 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.
This leaves Hanjin’s creditors, who are bound to bring claims in London, with little right of recourse in the contractually agreed forum.
The UK recognition order carves out a number of claims from the moratorium on English proceedings (both in the High Court and in London arbitration), and provides the receiver or the Companies Court in London with the ability to give permission to waive the stay. However, the circumstances in which the stay will be permitted to be lifted are limited. Consequently, creditors are faced with the prospect of registering their claims in the Korean rehabilitation proceedings.
As Clyde noted, this gives rise to interesting questions. Does submitting a claim in the rehabilitation proceedings in South Korea subvert the contractually agreed English law and jurisdiction clause? Also of interest would be the ability of the South Korean Court to deal with disputes arising out of a breach of an English law contract, and the applicable measure of damages.
As Hanjin takes additional steps to obtain insolvency protection around the world, creditors are now faced with a race against time, said Clyde.