In a landmark judgment on 9 September 2016, the High Court of Singapore exercised its inherent jurisdiction to grant, on an ex parte basis, interim orders for the recognition of the Hanjin Shipping Co Ltd (Hanjin Shipping) Korean rehabilitation proceedings in Singapore.
The interim orders included a restraint of all pending, contingent or fresh proceedings; and a stay of all present proceedings against Hanjin Shipping and/or its Singapore subsidiaries. The orders expressly included all enforcement or execution actions against the vessels beneficially owned or chartered by Hanjin Shipping and its subsidiaries (excluding the arrest of the Hanjin Rome). The interim orders will operate pending a further inter partes hearing, where interested parties will have the opportunity to address the court.
Previously, in the case of Beluga Chartering, the Singapore Court of Appeal had held that while the Singapore Courts are not automatically bound by a stay of proceedings imposed by a foreign court of legislature, whether and how the Singapore Courts will render assistance to foreign insolvency proceedings through the regulation of its own proceedings will depend on the particular circumstances before it.
The High Court's decision in the Hanjin Shipping case picks up on the Court of Appeal's judgment above and develops the law in this area, giving some clarity on the factors that the Singapore Courts will take into account when determining whether they should recognise and/or give effect to foreign insolvency or rehabilitation proceedings. These factors include:
- The connection of the company to the forum in which the rehabilitation proceedings are taking place, and to the place of rehabilitation;
- What the rehabilitation process entails, including its impact on domestic creditors and whether it is fair and equitable in the circumstances; and
- Whether there are any strong countervailing reasons against recognition of the foreign rehabilitation proceedings.
In the case of Hanjin Shipping, the High Court especially noted the applicant's assurance that all creditors in the same class would be treated equally regardless of nationality. The High Court was also mindful of practical concerns, including the facilitation of participation by Singaporean creditors in the foreign rehabilitation process (e.g. attending in meetings and voting on the rehabilitation plan). To that extent, the High Court has asked Hanjin Shipping's solicitors to determine what measures would be allowed or practicable under Korean law for Singaporean creditors to participate in the meetings via electronic means.
Another notable feature of the High Court's orders was its decision to extend assistance even to the extent of preventing arrest of ships in the Hanjin fleet (excluding certain existing arrest proceedings involving the Hanjin Rome). In this regard, the High Court took the view that there was nothing apparent on the fact of the statutes or Rules of Court that excluded admiralty matters from the exercise of its inherent jurisdiction.
However, the High Court expressly noted that no arguments had been presented examining the nature and character of the admiralty jurisdiction as against the inherent powers of the court, on which the interim orders had been granted and left open the question of whether, if arguments had been presented, it might have come to a different conclusion. This is likely to be an issue that will feature in the inter partes hearing, especially because the present decision appears to depart from an earlier decision of the High Court in Re TPC Korea Co Ltd  2 SLR 617 which considered the admiralty jurisdiction to be a "self-contained regime".