THE ARTICLE 20 STAY
51 Article 20(1) is set out at [35] above. It provides for a stay of any proceedings concerning the debtor's assets, rights, obligations or liabilities upon the recognition of a foreign proceeding as a foreign main proceeding. The Court does not have power to modify the scope of the stay imposed by Art 20(1) of the Model Law: see Senvion GmbH, in the matter of Senvion GmbH (No 2) [2019] FCA 1732; (2019) 140 ACSR 20 (Re Senvion) at [24]-[29].
52 Relevantly, pursuant to s 16 of the CBI Act, the scope and modification or termination of the stay imposed by Art 20(1) is the same as if the stay arose under Ch 5 (other than Pt 5.2 and Pt 5.4A) of the Corporations Act. In Hur v Samsun Logix Corporation [2009] FCA 372 at [13] Jacobson J observed that "[t]he effect of [s 16 of the CBI Act] appears to be that the stay is to be to the same extent and effect as under the provisions of the Bankruptcy Act 1966 (Cth) or the Corporations Act".
53 In this case the Foreign Representatives submitted, and I accepted, that as there was no precise analogue in Australian law to the Thai Business Reorganisation Law, the proceeding is most closely analogous to the voluntary administration process under the Corporations Act and, accordingly, the stay under Art 20 of the Model Law should be the same as would apply if it arose under Pt 5.3A of the Corporations Act. A similar conclusion was reached in Re Senvion at [23].
54 Ms Techajongjintana gave detailed evidence about the nature of a Thai business reorganisation proceeding commenced pursuant to the Thai Business Reorganisation Law. As summarised by the Foreign Representatives at [12] above, the steps usually taken in such a proceeding are:
(1) creditors, the debtor or a government agency may file a petition. After a petition is filed the Thai Bankruptcy Court considers whether the statutory requirements for filing have been met and whether there is reasonable cause and prospects for the reorganisation of the debtor's business;
(2) if the Thai Bankruptcy Court accepts the petition, an automatic stay arises pursuant to which creditors are prohibited from, among other things, commencing litigation, revoking licences, commencing a civil case or arbitration in relation to the debtor's assets, enforcing a judgment against the debtor's assets, enforcing security without the approval of the Thai Bankruptcy Court or suspending utility services. The stay affects both secured and unsecured creditors;
(3) an owner of property which is essential for the operation of the debtor's business under a contract of hire purchase is not permitted to exercise the right to recover the property in the possession of the debtors;
(4) while the automatic stay is in effect, the debtor may not dispose of or encumber its property except as necessary for conducting the ordinary business of the debtor or as otherwise provided by an order of the court;
(5) the Thai Bankruptcy Court schedules a hearing to examine the petition, typically within two to four months of the acceptance of the petition;
(6) following the hearing to examine the petition, the Thai Bankruptcy Court may make an order granting permission to reorganise the debtor's business operations, with or without the appointment at that time of a "plan preparer", referred to as the planner, or it may dismiss the petition. If appointed, the planner assumes control of the management powers of the debtor as well as most shareholder rights;
(7) after the Thai Bankruptcy Court makes an order granting permission to reorganise and appoints a planner, the steps that are then taken usually include creditors being required to submit their applications for the repayment of debts to the Thai Official Receiver within one month and the Official Receiver then approving or denying each claim;
(8) within three months of his or her appointment, the planner is obliged to prepare a plan for the debtor company's reorganisation and submit it to the Official Receiver, with the period of implementation of such a plan not to exceed five years. One of the requirements for a plan is that it includes details about the person who will manage the business and property of the debtor in accordance with the plan, referred to as the plan administrator; and
(9) within three to four weeks after the plan is submitted, the Official Receiver convenes and holds a creditors' meeting at which creditors consider the plan and may vote to either approve or reject it. If the plan is approved at the creditors' meeting, the Thai Bankruptcy Court then schedules a hearing to consider it. The court can approve or reject a plan. If approved, the plan administrator implements the plan.
55 As submitted by the Foreign Representatives, until the appointment of a planner by the Thai Bankruptcy Court the Thai Business Reorganisation Law is a debtor in possession regime with no analogue in Australian law. However, following the appointment of the planner the operation of a Thai business reorganisation proceeding is analogous to that of an Australian voluntary administration. That is, a planner, like a voluntary administrator, works to determine a plan, similar to a deed of company arrangement, to be sanctioned by the creditors under the supervision of a plan administrator, similar to a deed administrator.
56 That said, there are, of course, some significant differences between the two processes, including the need for the plan to be sanctioned by the Thai Bankruptcy Court. However, I accepted the submission that, while they are not entirely coterminous, the goals and procedure of the Thai Business Reorganisation Law align more closely with voluntary administration than with any other form of external administration under Australian law and it was therefore appropriate that an order be made that the stay under Art 20(1) of the Model Law operate as if it arose under Pt 5.3A of the Corporations Act.