Re Senvion GmbH (No 2)

This case involved the application by Senvion GmbH for the recognition of a Formal Self-Administration proceeding, commenced in Germany, as the "foreign main proceedings" under the Cross-Border Insolvency Act 2008 (Cth) and the Model Law on Cross-Border Insolvency. The application was made in the Federal Court of Australia, and the primary issue was whether the German Formal Self-Administration proceeding could be recognised as a "foreign main proceeding" and Senvion as the "foreign representative." Additionally, the Court had to determine the nature of the stay arising under Article 20 of the Model Law and the best local law stay to effect the Formal Self-Administration proceeding stay. The Court was also required to decide whether it had the power to modify the scope of the stay under the Cross-Border Insolvency Act and the Model Law, and whether leave should be granted to the Pacific Hydro Entities to proceed with their proceedings in the Supreme Court of Victoria under section 440D of the Corporations Act 2001 (Cth).

The Court held that the definition of "foreign representatives" under Article 2(d) of the Model Law is broad enough to allow for the recognition of the debtor company as the foreign representative. Given that the German insolvency statute permits self-administration, the Court recognised the Formal Self-Administration proceeding as a foreign main proceeding and Senvion as the foreign representative. The Court also held that the application of stay is evaluative, not discretionary, and therefore, the Court did not have the power to modify the stay at the recognition stage. Furthermore, the Court found that the nature of the claim by the Pacific Hydro Entities in the Supreme Court Proceeding and the peculiar vulnerability of the Pacific Hydro Entities to Senvion in the day-to-day operations of their wind farms were factors of particular weight to the exercise of the discretion under section 440D of the Corporations Act 2001 (Cth). Consequently, the Court granted leave to the Pacific Hydro Entities to continue their proceeding against Senvion.

In summary, the Federal Court of Australia recognised the Formal Self-Administration proceeding as a foreign main proceeding and Senvion as the foreign representative. The Court held that it did not have the power to modify the scope of the stay under the Cross-Border Insolvency Act and the Model Law. However, the Court granted leave to the Pacific Hydro Entities to proceed with their proceedings in the Supreme Court of Victoria under section 440D of the Corporations Act 2001 (Cth).