FEDERAL COURT OF AUSTRALIA
Hur v Samsun Logix Corporation
[2015] FCA 1154
Citation: Hur v Samsun Logix Corporation [2015] FCA 1154 Parties: HYUN-CHUL HUR IN HIS CAPACITY AS FOREIGN REPRESENTATIVE OF SAMSUN LOGIX CORPORATION v SAMSUN LOGIX CORPORATION File number: NSD 949 of 2015 Judge: RARES J Date of judgment: 24 September 2015 Legislation: Admiralty Act 1988 (Cth)
Bankruptcy Act 1966 (Cth)
Corporations Act 2001 (Cth)
Cross-Border Insolvency Act 2008 (Cth)UNCITRAL Guide to Enactment of the Model Law
Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade LawCases cited: Akers v Deputy Commissioner of Taxation (2014) 223 FCR 8
Hur v Samsun Logix Corporation [2009] FCA 372
Kim v Daebo International Shipping Co Limited [2015] FCA 684
Re Capital General Corporation Limited, Rogers v Radly (2000) 37 ACSR 158
Yu v STX Pan Ocean Co Limited (2013) 223 FCR 189Date of hearing: 24 September 2015 Place: Sydney Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 34 Solicitor for the Plaintiff: Mr D Greenberg of Ashurst Australia Counsel for the Defendant: The defendant did not appear
IN THE FEDERAL COURT OF AUSTRALIA
IN ADMIRALTY
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 949 of 2015
BETWEEN: HYUN-CHUL HUR IN HIS CAPACITY AS FOREIGN REPRESENTATIVE OF SAMSUN LOGIX CORPORATION
PlaintiffAND: SAMSUN LOGIX CORPORATION
Defendant
JUDGE:
RARES J
DATE OF ORDER:
24 SEPTEMBER 2015
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1.Pursuant to articles 2(a) and 17(1) of Schedule 1 to the Cross-Border Insolvency Act 2008 (Cth) (the Model Law), the foreign proceedings in the Seoul Central District Court in the Republic of Korea (Case 2015 Heohap 100203) relating to the defendant (the Korean proceeding), be hereby recognised as a foreign proceeding.
2.Pursuant to articles 2(b) and 17(2) of the Model Law, the Korean proceeding be recognised as a foreign main proceeding.
3.Pursuant to article 2(d) of the Model Law, the plaintiff, Hyun-Chul Hur, be recognised as a foreign representative of the defendant in Australia.
4.The plaintiff cause to be published, on or before 16 October 2015, in:
(a)the Shipping Daily of Korea;
(b)The Australian newspaper; and
(c)Lloyd’s List Australia
a notice of the making of this order in accordance with Form 21 of the Federal Court (Corporations) Rules 2000 (Cth).
5.On or before 16 October 2015, the plaintiff send a notice of the making of this order, in accordance with Form 21 of the Federal Court (Corporations) Rules 2000 (Cth) to each Australian creditor of the defendant known to the plaintiff and listed in section E of the originating process filed on 12 August 2015.
6.Any application for the issue of a warrant for the arrest, in Australia, of any vessel owned or chartered by the defendant, brought by a person claiming to hold a security interest, be made to a judge of this Court with the reasons for judgment for the orders made today and those in Yu v STX Pan Ocean Co Ltd (South…
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- Case
- [2015] FCA 1154
- Decision Date
CaseChat Overview and Summary
The central legal issues in this case were whether the Korean proceeding constituted a foreign main proceeding under the Cross-Border Insolvency Act and whether the plaintiff was entitled to recognition as the foreign representative. The court needed to determine if the Korean proceeding met the criteria for being a foreign main proceeding, particularly given the location of Samsun's centre of main interests. Additionally, the court had to consider whether the plaintiff, Hyun-Chul Hur, was properly authorised to act as the foreign representative and whether he was suitable for that role. These questions required a detailed examination of the legislative framework and the specific circumstances of Samsun's insolvency.
The court found that the Korean proceeding was indeed a foreign main proceeding, as it was taking place in Korea where Samsun had its centre of main interests. The court also recognised Hyun-Chul Hur as the foreign representative, based on his authorisation in the Korean proceeding. The court was satisfied that the Korean proceeding was a judicial proceeding in which Samsun's assets and affairs were subject to control or supervision by the Korean Court for reorganisation. The court further concluded that none of the Australian creditors had maritime liens, but rather had general maritime claims. Therefore, the court's recognition of the Korean proceeding and the plaintiff's role as foreign representative was in line with the provisions of the Model Law.
The final orders of the court included the recognition of the Korean proceeding as a foreign main proceeding, the recognition of Hyun-Chul Hur as the foreign representative, and directives for the publication of notices and communication with Australian creditors. The court also provided guidance for any future applications for the arrest of vessels owned or chartered by Samsun in Australia. This decision highlighted the importance of adhering to international insolvency laws and the cooperation required between jurisdictions in managing cross-border insolvency proceedings.
Orders
Orders of the court
1. Pursuant to articles 2(a) and 17(1) of Schedule 1 to the Cross-Border Insolvency Act 2008 (Cth) (the Model Law), the foreign proceedings in the Seoul Central District Court in the Republic of Korea (Case 2015 Heohap 100203) relating to the defendant (the Korean proceeding), be hereby recognised as a foreign proceeding.
2. Pursuant to articles 2(b) and 17(2) of the Model Law, the Korean proceeding be recognised as a foreign main proceeding.
3. Pursuant to article 2(d) of the Model Law, the plaintiff, Hyun-Chul Hur, be recognised as a foreign representative of the defendant in Australia.
4. The plaintiff cause to be published, on or before 16 October 2015, in:
(a) the Shipping Daily of Korea;
(b) The Australian newspaper; and
(c) Lloyd’s List Australia
a notice of the making of this order in accordance with Form 21 of the Federal Court (Corporations) Rules 2000 (Cth).
5. On or before 16 October 2015, the plaintiff send a notice of the making of this order, in accordance with Form 21 of the Federal Court (Corporations) Rules 2000 (Cth) to each Australian creditor of the defendant known to the plaintiff and listed in section E of the originating process filed on 12 August 2015.
6. Any application for the issue of a warrant for the arrest, in Australia, of any vessel owned or chartered by the defendant, brought by a person claiming to hold a security interest, be made to a judge of this Court with the reasons for judgment for the orders made today and those in Yu v STX Pan Ocean Co Ltd (South Koreea) (2013) 223 FCR 189 to be drawn to the attention of the Court at the time any such application is made.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Samsun disclosed, in its application for the commencement of the rehabilitation procedures filed in the Korean Court, that it is currently party to two London arbitrations and a proceeding in the Seoul Central District Court in respect of claims amounting to over USD100 million, or KRW155,844,000,000. It also disclosed that Samsun’s liabilities as at 31 December 2014 exceeded its assets by KRW121.6 billion, and stated:It is difficult for the Debtor to repay its debts due to such excessive liabilities.Consideration I discussed the legislative scheme of the Model Law in Kim v Daebo International Shipping Co Limited [2015] FCA 684, and some of the issues that arise in respect of the interaction between the Model Law, the operation of the Cross-Border Insolvency Act and proceedings under the Admiralty Act for the enforcement of claims in rem, particularly maritime liens which are secured claims. Based on the evidence in Mr Marshall’s affidavit concerning the nine existing Australian creditors, it is likely that none of those creditors has any maritime lien, but only had a claim based on its supply of goods or services that are general maritime claims under s 4(3) of the Admiralty Act. Part 3 of the Admiralty Act creates rights to proceed in admiralty by actions in rem against a ship or other property. In particular, s 15 creates the right to proceed in an action in rem against a ship or other property on a maritime lien or other charge in respect of the ship or other property. Similarly, s 16 gives a right to proceed on a proprietary maritime claim, as defined in s 4(2), including a claim relating to possession of, title to, ownership of or a mortgage of a ship or share in a ship, or a mortgage of its freight. I am satisfied by the evidence before the Korean Court that Samsun has its head office in Seoul, and a branch office in Busan in South Korea. It has five officers, being four directors, and an auditor, and 52 employees in Korea. Samsun also has 106 officers and employees who that evidence described as being “offshore”, presumably mostly seafarers, including masters of the vessels operated in the course of Samsun’s business. Accordingly, I am satisfied that, on the evidence before me, the presumption in Art 16(3) of the Model Law should be given effect, and that Korea is the centre of Samsun’s main interest. For that reason I am also satisfied, on the evidence before me, that the Korean proceeding is a foreign proceeding within the meaning of Arts 2(a) and 17(1)(a), being a judicial proceeding in Korea pursuant to a law relating to insolvency in which the assets and affairs of Samsun are subject to control or supervision by the Korean Court for the purpose of reorganisation. I am also satisfied that the Korean proceeding is a foreign main proceeding because it is taking place in Korea, where Samsun has its centre of main interests. I am satisfied that Mr Hur is a foreign representative, being a person authorised in the Korean proceeding to administer the reorganisation of Samsun’s assets and affairs, or to act as a representative in the foreign proceeding within the meaning of Arts 2(d) and 17(1)(b).