Didyasarin v Thai Airways International Public Company Limited

Federal Court of Australia|2020-10-14|Before: Markovic J

The plaintiffs have leave to amend the originating process to remove Mr Peraphon Thawornsupacharoen as a party and to substitute Mr Chansin Treenuchagron, in his capacity as Foreign Representative of Thai Airways International Public Company Limited (Thai Airways), as a plaintiff.
Air Chief Marshal Chaiyapruk Didyasarin and Mr Chansin Treenuchagron are recognised as the foreign representatives of Thai Airways within the meaning of Art 2(d) of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (Model Law) as incorporated by s 6 of the Cross-Border Insolvency Act 2008 (Cth), nunc pro tunc from 25 September 2020.
Mr Peraphon Thawornsupacharoen is recognised as having ceased to be a foreign representative of Thai Airways within the meaning of Art 2(d) of the Model Law nunc pro tunc from 25 September 2020. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

MARKOVIC J: 1 On 3 August 2020 I made orders including an order recognising Air Chief Marshal Chaiyapruk Didyasarin and Mr Peraphon Thawornsupacharoen (Former Foreign Representatives) as foreign representatives within the meaning of Art 2(d) of the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law (Model Law): see Didyasarin v Thai Airways International Public Company Limited [2020] FCA 1154 (Thai Airways (No 1)). 2 On 14 October 2020 I made orders, on the application of the Former Foreign Representatives who at the time were the plaintiffs, including an order that Air Chief Marshal Chaiyapruk Didyasarin and Mr Chansin Treenuchagron be recognised as foreign representatives of Thai Airways International Public Company Limited (Thai Airways) within the meaning of Art 2(d) of the Model Law and an order that Mr Peraphon Thawornsupacharoen is recognised as having ceased to be a foreign representative of Thai Airways within the meaning of that article, in both cases, nunc pro tunc from 25 September 2020. These are my reasons for making those orders.

Background 3 On 27 May 2020 the Central Bankruptcy Court of Thailand (Thai Bankruptcy Court) made orders appointing the Former Foreign Representatives as representatives of Thai Airways for the purposes of seeking recognition outside Thailand of a Thai business reorganisation proceeding. The orders made on 3 August 2020 recognising the Former Foreign Representatives as foreign representatives of Thai Airways within the meaning of Art 2(d) of the Model Law were made on that basis. 4 On 14 September 2020 the Thai Bankruptcy Court made orders approving the business reorganisation of Thai Airways and appointing Air Chief Marshal Chaiyapruk Didyasarin, Mr Chakkrit Parapuntakul, Mr Pirapan Salirathavibhaga, Mr Boontuck Wungcharoen, Mr Piyasvasti Amranand, Mr Chansin Treenuchagron and EY Corporate Advisory Services Limited as planners of Thai Airways (Planners). 5 Mr Thawornsupacharoen has resigned as a director of Thai Airways. 6 On 16 September 2020 the Planners executed a power of attorney appointing Air Chief Marshal Chaiyapruk Didyasarin and Mr Chansin Treenuchagron (New Foreign Representatives) as their attorneys to conduct foreign proceedings in respect of Thai Airways, including in Australia, and authorising them to act as representatives of Thai Airways in the foreign proceedings, including in Australia. 7 On 21 September 2020 the Planners filed a petition in the Thai Bankruptcy Court in which they sought permission for the Planners to proceed with actions in foreign courts and for the appointment of the New Foreign Representatives. 8 On 25 September 2020 the Thai Bankruptcy Court ruled (Ruling) that: After a consideration, the court is of the view that the request is for taking legal actions for the purpose of protection and preservation of the Debtor's assets. They are necessary actions to enable the Debtor to continue its business. Therefore, the court is not required to deliver an order. However, the Debtor shall determine appropriate costs for the legal actions and such costs shall be included in the reorganization plan for the consideration of creditors. 9 Ms Paralee Techajongjintana, a principal partner of Baker & Mackenzie Limited in Thailand and Thai counsel to the plaintiffs, explains that the effect of the power of attorney and the Ruling is that: (1) the Thai Bankruptcy Court approved the appointment of the New Foreign Representatives; (2) Thai Airways, acting within its power, replaced one of those representatives; and (3) the New Foreign Representatives have been properly authorised under Thai law to act on behalf of Thai Airways as its foreign representatives in, among other things, pursuing recognition of the Thai proceeding in this Court.

Legislative framework 10 The legislative framework pursuant to which the Court has power to make orders for the recognition of a foreign proceeding is set out in detail in Thai Airways (No 1) at [28]-[36]. For the purposes of the application made before me on 14 October 2020 it is relevant to note the following provisions of the Model Law: (1) Art 2(d) defines the term "foreign representative" as "a person or body, including one appointed on a interim basis, authorized in a foreign proceeding to administer the reorganization or the liquidation of the debtor's assets or affairs or to act as a representative of the foreign proceeding"; (2) Art 15 permits a foreign representative to apply to the Court for recognition of a foreign proceeding in which the foreign representative has been appointed; (3) Art 17(1) requires the Court to recognise the foreign proceeding if, among other things, the foreign representative applying for recognition is, relevantly, a person within the meaning of Art 2(d); (4) Art 17(4) provides that: The provisions of articles 15, 16, 17 and 18 do not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist. (5) Art 18 requires that, from the time of filing the application for recognition of a foreign proceeding, the foreign representative must inform the Court promptly of, relevantly, any substantial change in the status of the foreign representative's appointment; and (6) Art 21(1) provides that: Upon recognition of a foreign proceeding, whether main or non‑main, where necessary to protect the assets of the debtor or the interests of the creditors, the court may, at the request of the foreign representative, grant any appropriate relief, including: There follow six non-exhaustive examples of the relief that the Court might grant.

Consideration 11 The evidence before me established that Mr Thawornsupacharoen had ceased to be a director of Thai Airways and that he was not appointed as one of the Planners. Accordingly, on 16 September 2020 the Planners appointed the New Foreign Representatives, replacing the Former Foreign Representatives, and subsequently approached the Thai Bankruptcy Court for permission to proceed with actions in foreign courts and for the appointment of the New Foreign Representatives. 12 In accordance with the requirements of Art 18 of the Model Law, the Former Foreign Representatives, by the filing of their interlocutory process dated 2 October 2020 and filed on that date, together with the affidavit of Ms Techajongjintana affirmed on 1 October 2020, informed the Court of the change in the status of Mr Thawornsupacharoen's appointment and the appointment of the New Foreign Representatives. 13 I accepted the Former Foreign Representatives' submission that, having regard to the framework of the Model Law and, in particular, given the context provided by Arts 2(d), 15, 17(4) and 18, the relief which the Court can grant under Art 21(1) extends to relief recognising a change in foreign representatives. Such relief is necessary to protect the interests of creditors in circumstances where, as in this case, the Former Foreign Representatives, who were recognised by the orders made on 3 August 2020, no longer have the power to act on behalf of Thai Airways in Australia. 14 In those circumstances it is appropriate that the New Foreign Representatives be recognised as foreign representatives for the purposes of Art 2(d) of the Model Law nunc pro tunc from 25 September 2020. It is also appropriate to recognise Mr Thawornsupacharoen as having ceased to be a foreign representative nunc pro tunc from 25 September 2020.

Conclusion 15 For those reasons I made the orders sought by the Former Foreign Representatives. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Markovic.

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