Billed as INSOL’s “most popular session”, the plenary session Hot Topics – Avoid Being Burnt! provided a brief overview of developments in the insolvency landscape. The session panel was chaired by Jay A. Carfagnini (Goodmans LLP) with panelists the Honourable Justice Paul Heath of the High Court of New Zealand, Gabriel Moss QC, Gaurav Malhorta (Ernst & Young), and Jason Karas (Lipman Karas).
The panel discussed the following points:
- Courts in many jurisdictions have had to consider whether or not to respect choice of forum clauses (including arbitration clauses) in an insolvency context. These clauses create a potential tension between, on the one hand, the desirability of unitary resolution of insolvency claims and avoiding fragmentation of proceedings (which may favour overriding choice of forum clauses), and, on the other hand, giving effect to parties’ agreements and party autonomy vis-à-vis choice of forum (which favour upholding such clauses, even if this results in a multiplicity of proceedings).
- It is clear that there are no easy answers to the question of how to deal with choice of forum clauses, however the panel noted that the Courts can sometimes use case management orders to address problems – for example, staying some claims while other claims are arbitrated or resolved by another forum.
- Mr Justice Heath discussed how arbitration or other international forums (such as the Singapore International Commercial Court (SICC)) may be used to resolve claims between insolvency practitioners based in different jurisdictions. Arbitration and SICC have the potential to provide a neutral forum and flexible procedures to resolve difficult cross-border issues.
- The panel also discussed the recent experience in the Nortel bankruptcy, where the Canadian and US Courts held a joint trial to determine the distribution of some USD 9 billion of assets. The joint trial, facilitated by video link, enabled the judges of the two courts to resolve issues in a coordinated and consistent manner, and provides a useful model for the future.
Gabriel Moss QC also briefly outlined the approach of the English courts to the recognition of foreign insolvency proceedings, under EU law, s426 of the Insolvency Act 1986, the Model Law (as enacted in the UK) or the common law. You can find out more details about recognition of foreign insolvency proceedings in the UK in Baker McKenzie’s Global Restructuring & Insolvency Guide (http://www.bakermckenzie.com/-/media/files/expertise/banking-finance/bk_globalrestructuringinsolvencyguide_20170307.pdf?la=en )