Creditors of bust Korean shipping line Hanjin are feverishly looking for jurisdictions where they may be able to arrest Hanjin ships; the company itself, and the insolvency authorities in Korea, one of the most arrest-unfriendly jurisdictions in the world, are trying to stop them.
An interesting suggestion here (£) comes from Ivan Ng of Stephenson Harwood in Hong Kong that that jurisdiction may be a safe haven. This is a bit surprising. Traditionally the view of the common law, which applies in Hong Kong to the exclusion of the UNCITRAL Model Law on Cross-border Insolvency, has been that while the common law may recognise and help foreign insolvency proceedings, it won’t take away the substantive secured status that arrest in Admiralty gives the claimant. But the suggestion is that all this has changed. This based on a Singapore decision of Aedit Abdullah JC in the Singapore High Court about four weeks ago, namely Re Taisoo Suk (as foreign representative of Hanjin Shipping Co Ltd) [2016] SGHC 195, in which, apparently also on the basis of the common law, he did prohibit arrests of Hanjin vessels.
No doubt Hanjin will take comfort at all this. But their joy may be short-lived. The Singapore decision is controversial, and is in any case an interim ex parte one, due to come to a full hearing in early November. Don’t bank on its being upheld. Also remember that at least one fairly recent Hong Kong decision, The Convenience Container [2007] 3 HKLRD 575, seems to uphold the strict common law view.
Watch this space: we live in interesting times.
