Samsun Logix Corporation v Def

This is an application under the Cross-Border Insolvency Regulations 2006. It concerns a company called Samsun Logix Corporation (“Samsun”), which is a Korean company.

The application was made by Mr Hyum-Chulhur, who is a court appointed receiver, and foreign representative of Samsun .

The application is supported by the affidavit of the receiver. I have been taken in detail to the provisions of the Cross-Border Insolvency Regulations 2006. The provisions which are of particular relevance are those contained in schedule 1 to the Regulations, and this sets out the UNCITRAL Model Law on Cross-Border Insolvency.

The articles of schedule 1 which are material to this application are some of the definitions in article 2, the definition of the competent court in article 4, the public policy exception in article 6, the provisions for application for recognition of foreign proceeding in article 15, and then articles 17, 20 and 21, to which I will refer in a little more detail.

Article 17 provides that in certain circumstances, and on certain bases, and subject to Article 6, what is described as a foreign proceeding shall be recognised, that is, it must be recognised by the English court.

I have been taken through the specific requirements of article 17(1), and I am satisfied that each of the matters which has to be shown, has been shown. There is no matter which requires consideration under Article 6. It follows that the court shall recognise the proceedings in the Korean courts, to which the receiver refers in his affidavit.

An order will be made giving due recognition to the relevant proceedings.

The next matter to which I need to attend is whether to recognise the relevant foreign proceeding, as a foreign main proceeding, or as a foreign non-main proceeding.

I am satisfied on the material that the relevant proceeding is a foreign main proceeding.

I will refer briefly to the consequences of recognition in that way, under article 17. Article 20 provides for the effects of recognition of a foreign main proceeding. Without reciting the various provisions in article 20, the position is that upon recognition of a foreign proceeding as a foreign main proceeding, there are certain specified stays or a suspension of certain specified matters.

I make it clear that the effect of my recognition of the Korean proceedings is that article 20 applies in this case. I mention that specifically because I have been told that there is a pending arbitration involving this company as respondent, with an intended hearing date of tomorrow in London, before an arbitrator. The consequence of my recognition decision under article 17 is that that proceeding, namely that arbitration against the company, is now immediately stayed.

The stay is of course subject to what is stated by cross-reference in article 20(2), that the stay has the same effect as a stay which follows the making of a winding up order under the Insolvency Act 1986.

The other matter to which attention has been given in the course of the argument is the possibility that the court may grant discretionary relief under article 21. Article 21 is wider than article 20 in a number of respects. Those respects are apparent upon a reading of the two articles, and I need not recite them.

The powers which the court has under article 21 may be exercised where they are shown to be necessary to protect the assets of the debtor, or the interests of the creditors.

Having been taken through the facts of the case as described in the affidavit of the receiver, I am satisfied that the various heads of relief, which have been asked for under article 21, and which will appear in the order of the court, are indeed proper heads of relief for this court to grant in the circumstances. I should state that in particular the court is acting under article 21(1)(g), so as to give to the company relief of a character that would be similar to the moratorium relief provided under paragraph 43 of schedule B(1) to the Insolvency Act 1986 in the case of an administration.