Global Restructuring Review - Cross-border restructuring and insolvency legal news, features and events

GRR Awards 2019 – recognition decision

Kyriaki Karadelis

13 May 2019

GRR Awards 2019 – recognition decision

Barcelona (Credit:

Our second list of nominees, for the “Most important cross-border recognition decision” category in the GRR Awards 2019, is available now.

The GRR Awards 2019 will be taking place in the historic El Palace Hotel in Barcelona on 15 June, the night before the opening reception for the International Insolvency Institute’s 19th Annual Conference.

They will kick off from 7pm with a networking drinks reception followed by dinner, before trophies are presented in 11 awards categories to celebrate the people, places and matters that shook the cross-border restructuring and insolvency world over the past year.

In addition to those 11 categories, we will also be revealing the top 30 firms in the GRR 100 2019 – our annual guide to approved cross-border insolvency and restructuring law firms – which will be presented to the wider public on the morning of Monday 17 June.

In March and April, we asked readers to submit their nominations for potential winners in several of the 11 awards categories. Below, we now present the nominees for “Most important cross-border recognition decision”.

Last Friday, we already revealed the very first shortlist for 2019, for “Noteworthy Spanish restructuring matter” – a special category honouring the location of this year’s awards.

Our shortlists of nominees in the remaining categories will be published in GRR over the next few days, after which we will also unveil the recipient of our annual Lifetime achievement award.

For more details about the GRR Awards 2019, as well as photos from last year and to book a place, please visit the event website.

All profits from the GRR Awards go to the Swawou Layout Community Primary School for Girls in Sierra Leone. The school was established by GRR’s parent company, Law Business Research, in 2008 to offer free primary education to girls from disadvantaged homes in Kenema town, eastern Sierra Leone.


Most important cross-border recognition decision - nominees

Oi US enforcement decisionJudge Sean Lane, US Bankruptcy Court for the Southern District of New York, 15 June 2018. The SDNY bankruptcy court finally gave full force and recognition to the telecoms company’s Brazilian judicial reorganisation plan, after an unsuccessful challenge from shareholders Bratel and Pharol who argued the plan interfered with their rights in Brazilian law. The court agreed with Oi’s foreign representative that the shareholders were trying to re-litigate issues they were already in the process of arguing in Brazil. The previous December, Judge Lane had also declined to recognise the separate Dutch insolvency proceedings of Oi’s Dutch subsidiary Coöp as foreign main proceedings, accusing one of the creditors backing the Dutch proceedings of “weaponising” the Chapter 15 process to undermine the Brazilian restructuring. The New York court originally recognised Oi’s Brazilian restructuring and granted it temporary Chapter 15 protection in June 2016.

In re Agrokor dd Judge Martin Glenn, US Bankruptcy Court for the Southern District of New York, 24 October 2018. Judge Glenn granted Chapter 15 recognition and approval to Croatian conglomerate Agrokor’s state-orchestrated emergency settlement plan, which compromised English-law governed debt, dismissing concerns that the English courts would not do the same on account of the 19th century Gibbs rule. The Chapter 15 court highlighted Gibbs’ “seeming incongruence” with the UNCITRAL Model Law on Cross-Border Insolvency’s principle of modified universalism, and said that while England was free to continue adhering to the rule, the US did not have to follow.

ENNIA Caribe Holding NV et alJudge Martin Glenn, US Bankruptcy Court for the Southern District of New York, 20 December 2018. This decision provided the first ever US recognition of insolvency proceedings under emergency regulations in the Dutch Caribbean territory of Curaçao. Systemically important insurer ENNIA Caribe Holding and six of its subsidiaries entered the special emergency insolvency process in July 2018 at the request of Curaçao’s central bank. Lawyers working on the case highlighted that the insurer’s survival was critical to the financial and social well-being of the people of Curaçao, and said its recognition was an important precedent not only for the island but for future cross-border insolvencies under other Dutch and European emergency regulations for systemically important companies.

Re: Zetta Jet Pte Ltd and others (Asia Aviation Holdings Pte Ltd, intervener)Justice Aedit Abdullah, Singapore High Court, 4 March 2019. Zetta Jet is the landmark decision on the recognition of foreign bankruptcy proceedings under Singapore’s recently adopted embodiment of the UNCITRAL Model Law. Justice Abdullah initially rejected the application on public policy grounds in January 2018, because Zetta Jet’s US Chapter 7 bankruptcy had been brought in breach of a Singaporean injunction. But the injunction was discharged by consent the following July, after which the court said there was no longer a bar to recognition. The decision is particularly significant because Justice Abdullah sided with the US approach for determining a debtor’s centre of main interests – assessing it on the day of the recognition application – as opposed to the EU position that it should be assessed at the date of the commencement of the foreign proceedings, or the Australian way, which is the date of the recognition hearing. The court also rebutted the presumption in article 16(3) of the Singapore Model Law that a debtor’s COMI is in its place of registration, finding that in this case it was in the US, where its operations, creditors and primary decision-makers were located.

H&C S HoldingsICC Judge Clive Jones, High Court of England and Wales, 25 March 2019. ICC Judge Clive Jones handed down the first-ever recognition of the enhanced moratorium for schemes of arrangement under section 211B of Singapore’s Companies Act 2017. The UK court’s recognition of the relief granted to steel producer H&C S Holdings addressed previous uncertainty as to whether a Singaporean scheme counted as a foreign proceeding under the UK’s Cross-Border Insolvency Regulations, and whether a UK court would recognise a moratorium in respect of a scheme.

Gunel Bakshiyeva v Sberbank of Russia & OrsLord Justice Henderson, Lord Justice Lewison, Lord Justice Baker, Court of Appeal of England and Wales, 18 December 2018. The England and Wales Court of Appeal rejected an appeal by the International Bank of Azerbaijan, which has been seeking to obtain a permanent moratorium under the UK’s Cross-Border Insolvency Rules preventing creditors with English law-governed debt from starting recovery proceedings locally. Creditors Sberbank and Franklin Templeton Investment Management did not appear in the bank’s voluntary restructuring in Azerbaijan, though Azeri law applied it to them anyway. The English appeal court upheld the effect of the Gibbs rule that debt can only be compromised in the jurisdiction of the law it is governed by, and awarded costs to the creditors, who have been permitted to begin enforcing their contractual rights in England. However, as the case looks likely to head to the UK Supreme Court, the creditors both signed undertakings that they will stop short of enforcing any resulting judgments in the UK until the highest court has made a decision whether to hear the case or not.

Toisa ICC Judge Catherine Burton, England and Wales Insolvency and Companies Court, 29 March 2019. Accepting that a debtor’s COMI should be assessed the America way – at the time of the recognition application, not the time the foreign bankruptcy petition was made as stipulated in the UNCITRAL Model Law’s Guide to Enactment – the England and Wales ICC Court recognised Bermudian oil driller Toisa’s Chapter 11 process as foreign main proceedings in March. The ruling is the first time the English courts have considered in detail the question of when to assess COMI. It may have come to a surprise to some, since the UK courts have appeared to lean towards the Guide’s approach in other cases.

In the matter of Videology LimitedMr Justice Snowden, England and Wales High Court, 16 August 2018. Mr Justice Snowden declined to recognise as foreign main proceedings the Chapter 11 case of Videology Ltd, a UK-headquartered subsidiary of a US advertising company, which entered bankruptcy in the US at the same time as its parent. The English judge found that Videology Ltd’s COMI was in the UK and that he could only recognise its Chapter 11 as foreign non-main proceedings, meaning it was not entitled to an automatic moratorium on creditor action. Nevertheless, the judge used his powers to issue an injunction enjoining creditors from enforcing their rights against the English company, finding that its planned Section 363 sale would give a fair chance to UK creditors to be heard.

In the matter of an Application by Paul Pretlove as Liquidator of FCI Markets Inc – Justice Ali Al Madhani, Dubai International Financial Centre (DIFC) Courts, 25 March 2019. The DIFC courts recently issued their first recognition decision in respect of a liquidator appointed in the British Virgin Islands. Justice Al Madhani recognised Kalo BVI managing director Paul Pretlove as liquidator of forex brokerage firm FCI Markets on the basis of international cooperation and comity, just two weeks after his application came before the DIFC court. FCI is the parent of a UAE company, Exential, which prosecutors have labelled a Ponzi scheme. Its Indian manager, Sydney Lemos, was sentenced to 500 years in prison in Dubai last year, but is appealing the ruling and maintains that his business was legitimate.

In the matter of an application for recognition and assistance by the Trustee in Bankruptcy of Japan Life Co, LtdJustice Jonathan Harris, Hong Kong High Court, 25 March 2019. Justice Jonathan Harris issued the first decision from a Hong Kong court recognising a Japanese winding-up proceeding, after a petition from the bankruptcy trustee to health products company Japan Life. Justice Harris said civil law Japanese winding-up proceedings constituted collective insolvency proceedings for the purposes of recognition, and found that Japan’s insolvency regime grants bankruptcy trustees similar powers to those the trustee had requested in Hong Kong. He also noted that the insolvency proceedings were in the company’s place of incorporation, meaning he should recognise them despite the fact most recognition applications in Hong Kong usually came from common law jurisdictions.

In the Matter of China Fishery Group Limited - Justice Jonathan Harris, High Court of Hong Kong, 14 January 2019. In what was the first ever application to recognise Chapter 11 proceedings in Hong Kong, Justice Jonathan Harris refused to grant relief to the US trustee for a Singaporean subsidiary of China Fishery Group on public policy grounds. Issuing his reasons in January, Justice Harris found the Singaporean company, CFG, had filed the Chapter 11 proceedings to avoid enforcement of a deed of undertaking it had signed with HSBC. Under that Hong Kong law-governed deed, the bank agreed to stop pursuing winding-up proceedings for CFG in Hong Kong and the Cayman Islands, if it appointed a chief restructuring officer to sell its valuable Peruvian fishmeal business. But the Chapter 11 proceedings followed. The fishery group’s Chapter 11 trustee applied for recognition on the basis of common law principles governing judicial assistance, seeking to gain access to Hong Kong court documents so he could determine whether the fishery group had claims against HSBC, or whether the bank’s conduct might have given rise to defences by the companies’ estates. But the court said issues such as whether the Chapter 11 proceedings were collective in nature or whether there was a relevant connection to the jurisdiction had not been fully canvassed – in part because the trustee could not have satisfied the relevant criteria. CFG had no relevant connection to Hong Kong, and neither had its COMI in the US at the time of the Chapter 11 filing, nor had it shifted to the US since then, the judge said, meaning there was no basis for recognising the trustee’s office.

Yukos FinanceVice-president CA Streefkerk (chairman), Councilor TH Tanja-van den Broek, Councilor CE du Perron, Councilor MJ Kroeze, Councilor CH Sieburgh, Dutch Supreme Court, 18 January 2019. Ending a long-running battle for control of a defunct Russian oil company’s international assets, the Dutch Supreme Court refused to recognise Yukos Finance’s Russian insolvency proceedings, finding state authorities had deliberately sought to bankrupt the company. Back in 2007, the Amsterdam District Court declined to recognise Dutch-registered Yukos Finance’s bankruptcy on the grounds that its Russian receiver did not have the right to sell its shares at auction. The ruling was upheld on appeal in 2010, but then quashed by the Dutch Supreme Court in 2013. On remand, the Amsterdam Court of Appeal ruled that Yukos’ bankruptcy should nevertheless be denied recognition because Russian authorities had imposed unlawful VAT assessments on the company. The Supreme Court backed the lower court, noting that the circumstances of Yukos’ bankruptcy were contrary to Dutch public policy. It also rejected claims from the Russian buyer of Yukos Finance’s shares that its former shareholders had failed to pursue available legal remedies in Russia, saying there was no general rule in private international law requiring a person to pursue an available legal remedy if it was likely to be ineffective.