Kim v SW Shipping Co Ltd

Gyeong-Duek Kim has applied to the Court for recognition of the Korean rehabilitation proceedings as a foreign proceeding under the Model Law on Cross-Border Insolvency. The application was made pursuant to Articles 2(a), 2(b) and 17(1) and 17(2) of the Model Law. The application was supported by affidavits and documents which the Court found to be sufficient to satisfy the requirements of the Model Law. The application was contested by SW Shipping Co Ltd who argued that the Court should not recognise the Korean proceeding because of difficulties in serving the application on all of the defendant's creditors. The Court found that the Federal Court (Corporations) Rules 2000 (Cth) did not require the Court to refuse to recognise the foreign proceeding on the basis of difficulties in serving some of the defendant's creditors. The Court was satisfied that all of the requirements of the Model Law had been met, and it made the orders sought by the plaintiff.

The Court found that it had a dispensing power under the Federal Court Rules (r 1.8) which was relevant and not inconsistent with the Corporations Rules. The Court noted the significant efforts made to give notice to the creditors, and the circumstances identified in Mr Park's affidavit. The Court concluded that it would not exercise its dispensing power in relation to the 10 creditors, having regard to the circumstances identified in Mr Park’s affidavit. The Court found that the Korean proceeding should be recognised as a foreign proceeding, Mr Kim should be recognised as a foreign representative, and the Korean proceeding should be recognised as a foreign main proceeding. The Court also found that 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 with a minimum of four hours’ notice to the Australian legal representatives for the plaintiff and to a judge of this Court with reasons for judgment in this case, Yu v STX Pan Ocean Co Ltd (South Korea) (2013) 223 FCR 189, and Yakushiji v Daiichi Chuo Kisen Kaisha [2015] FCA 1170 drawn to the attention of the Court at the time any such application is made.

In the circumstances, the Court made the orders sought by the plaintiff. The orders included recognising the Korean proceeding as a foreign proceeding, recognising Mr Kim as a foreign representative, recognising the Korean proceeding as a foreign main proceeding, and ordering that 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 with a minimum of four hours’ notice to the Australian legal representatives for the plaintiff and to a judge of this Court with reasons for judgment in this case, Yu v STX Pan Ocean Co Ltd (South Korea) (2013) 223 FCR 189, and Yakushiji v Daiichi Chuo Kisen Kaisha [2015] FCA 1170 drawn to the attention of the Court at the time any such application is made. The Court also ordered that any person who claims to hold a security interest in any property or vessel owned or chartered by the defendant, or who claims to be a creditor of the defendant, has liberty to apply to a Judge of the Federal Court of Australia, on the giving of three days’ written notice to the plaintiff, to vary or rescind any of these orders.