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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Stocznia Gdynia SA v Bud-Bank Leasing SP. ZO. O, Re [2009] EWHC B43 (Comm) (29 June 2009) URL: https://www.bailii.org/ew/cases/EWHC/Comm/2009/B43.html Cite as: [2009] EWHC B43 (Comm), [2010] BCC 255 |
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CHANCERY DIVISION
COMPANIES COURT
IN THE MATTER OF STOCZNIA GDYNIA SA
AND
IN THE MATTER OF STOCZNIA SCZCECINSKA NOWA SP. ZO.O.
AND
IN THE MATTER OF THE CROSS-BORDER INSOLVENCY REGULATIONS 2006
Strand, London, WC2A 2LL |
||
B e f o r e :
____________________
BUD-BANK LEASING SP. ZO. O. |
Applicant |
____________________
Hearing date: 22 June 2009
____________________
Crown Copyright ©
MR REGISTRAR BAISTER
Mr Registrar Baister:
The applications
The background
"The Compensation Proceedings are designed to protect the Company and the other shipyards while their assets are auctioned through a transparent sale process, and to enable the state aid to be repaid (to the extent possible after taking other priorities into account) in a liquidation process. This will mean that the purchasers can acquire the assets free of any obligation to repay the illegal subsidies so that they can conduct their business in the future unhindered by such a burden".
In paragraph 8 they describe the proceedings briefly in these terms:-
"[T]he regime provides for a period during which the Company is protected from claims of creditors while the Compensation Administrator effects a sale of the business and assets and uses the proceeds to pay employees and creditors according to priorities set out in the Polish Act. The distribution of the assets is governed by the same statutory provisions which would apply in a conventional bankruptcy under the Polish Law on Bankruptcy and Rehabilitation... and the distribution plan is subject to the approval of the Polish Court. At the end of the Compensation Proceedings, the restructured business can be carried on by the purchaser while the Company itself will proceed into a conventional liquidation".
The EC Regulation on Insolvency Proceedings and the Cross-Border Insolvency Regulations
i) the proceedings must be a foreign proceeding within the meaning of article 2(i) of the Model Law; they must not be excluded proceedings as defined by article 1 paragraph 2;
ii) the foreign representative must be a person or body within the meaning of article 2(j);
iii) the application must meet the requirements of article 15(2) and (3) of the Model Law; the relevant procedural requirements must be satisfied, specified information must be given in the evidence and certain documents must be exhibited;
iv) the application must have been made to a court as defined by article 4 of the Model Law (in these cases this court).
"a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency, in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation."
The Guide makes clear that this definition is to be construed broadly and "inclusively". As long as the proceedings possess the relevant attributes, they should be recognised. It sets out the following propositions:-
"23 To fall within the scope of the Model Law, a foreign insolvency proceeding needs to possess certain attributes. These include: basis in insolvency-related law of the originating State; involvement of creditors collectively; control or supervision of the assets and affairs of the debtor by a court or another official body; and reorganization or liquidation of the debtor as the purpose of the proceeding (art. 2(a)).
"24 Within those parameters, a variety of collective proceedings would be eligible for recognition, be they compulsory or voluntary, corporate or individual, winding-up or reorganization or those in which the debtor retains some measure of control over its assets, albeit under court supervision (e.g. suspension of payments; 'debtor in possession').
"25 An inclusive approach is used also as regards the possible types of debtors covered by the Model Law. Nevertheless, the Model Law refers to the possibility of excluding from its scope of application certain types of entities, such as banks or insurance companies specially regulated with regard to insolvency under the laws of the enacting State (art. 1(2))".
The question is whether these Polish compensation proceedings fall within the definition of article 2(i).
The nature of compensation proceedings
i) The purpose of compensation proceedings is, as we have seen, the sale of assets, the satisfaction of creditors' claims and the protection of the rights of employees (article 1).
ii) The proceedings are initiated under the supervision of the competent minister of the Treasury by the president of the ARP and carried out by a compensation administrator (art 2(1)).
iii) The president of the ARP is the "organ of first instance" (art 9(1)) who appoints a provisional administrator and initiates the proceedings (article 18(1)).
iv) The provisional administrator draws up an inventory and values the assets as well as taking other preliminary steps (articles 19(1) and 29(1)).
v) The president of the ARP convenes a meeting of creditors and requires creditors to submit their claims (article 23(2)).
vi) The meeting of creditors appoints a compensation administrator and a committee of creditors (articles 22 and 24(3)).
vii) When the proceedings are opened the directors lose their powers which are taken over by the compensation administrator; the assets are surrendered to it ; there are obligations to provide it with information (article 28(1)).
viii) The administrator is empowered to run the business to the extent necessary to protect the assets and to enable them to be sold for the benefit of the creditors (article 70(1)).
ix) The administrator is obliged to prepare a sales plan, a list of public law creditors' claims and a list of claims of ordinary creditors (article 77). The sales plan is submitted to the president of the ARP who decides whether to approve it, taking into account the views of the creditors' committee (article 79).
x) The assets are then sold (articles 80 and 82).
xi) Creditors' claims are then submitted to the president of the ARP and considered by the compensation administrator who adjudicates on them. There is a procedure for disputes to be dealt with by the district court (articles 85, 91, 93, 94, 102, 103 and 105).
xii) A distribution plan is then drawn up which must be approved by the court (articles 108-109). After approval distribution takes place in accordance with the provisions of the Law on Bankruptcy and Rehabilitation (article 113).
xiii) The proceedings are closed by the president of the ARP (article 130) and the company is then put into bankruptcy (articles 137-138).
i) the court adjudicates on disputed claims of creditors (articles 85-102);
ii) the court must approve the proposed distribution to creditors (article 109(1)).
There is, then, some similarity with our creditors' voluntary winding up where the process is initiated out of court but the jurisdiction of the court may be invoked when required.
issues (see paragraph 17 above).
Policy considerations
The status of the administrator as foreign representative
"a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor's assets or affairs or to act as a representative of the foreign proceeding"
The applicants plainly fall within that definition.
Centre of main interests
Other formal requirements
Conclusion