Claimants should ensure that in foreign as well as UK insolvency procedures their claims are protected against limitation defences.
Glencore owned cargo carried from Bulgaria to the USA aboard the M.V. Sanko Mineral (the "Ship") under a charterparty which stipulated any claim must be made within 12 months of final discharge, failing which claims would be time barred. The Ship was arrested by various creditors in the USA which delayed delivery of Glencore's goods by 4 months (the goods were discharged in September 2012).
The Owners of the Ship issued insolvency proceedings in Japan in July 2012 entering a reoorganisation procedure, which was recognised under the Cross-Border Insolvency Regulations 2006 by the English court. The order of the English court provided for an administration-style moratorium.
The Ship was eventually sold in 2014, and Glencore asserted that it had rights in rem in the sale proceeds because in 2012 it had issued a claim in the US maritime court which it had also asserted in the Japanese courts in the reorganisation proceedings. Glencore had not, however, started arbitration proceedings within the limitation period stipulated..
Glencore's claim was dismissed by the English court as time barred. Arbitration had not been commenced within 12 months of discharge. Whether Glencore could assert any claims in the re-organisation was a matter for the Japanese court to decide.
Beware of limitation periods in insolvency proceedings – limitation will not automatically stop running in administration and potentially in respect of foreign proceedings.