Legislation
7 I will, for convenience, set out the relevant provisions of the Act. Section 5(1) defines Model Law to mean the Model Law on Cross-Border Insolvency of the United Nations Commission on International Trade Law, set out in the Annex to the United Nations General Assembly Resolution A/Res/52/158, the English text of which is set out in Schedule 1 to the Act.
8 Section 6 of the Act is as follows:
Subject to this Act, the Model Law, with the modifications set out in this Part, has the force of law in Australia.
9 Section 7(1) provides as follows:
In the Model Law (as it has the force of law in Australia), a reference to this State is a reference to Australia.
10 Section 8 provides that:
The Model Law has the force of law in Australia as if the Model Law referred to:
(a) the Bankruptcy Act 1966; and
(b) Chapter 5 (other than Parts 5.2 and 5.4A), and section 601CL, of the Corporations Act 2001;
wherever the Model Law provides that the laws of the enacting State relating to insolvency are to be identified.
11 Section 10(b)(1) confers jurisdiction on this court in the present application.
12 Section 13 provides as follows:
In addition to the requirement in paragraph 3 of Article 15 of the Model Law (as it has the force of law in Australia) that an application for recognition be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative, the application must be accompanied by a statement identifying:
(a) all proceedings under the Bankruptcy Act 1966 in respect of the debtor; and
(b) any appointment of a receiver (within the meaning of section 416 of the Corporations Act 2001), or a controller or a managing controller (both within the meaning of section 9 of that Act), in relation to the property of the debtor; and
(c) all proceedings under Chapter 5, or section 601CL, of the Corporations Act 2001 in respect of the debtor;
that are known to the foreign representative.
13 Section 16 states:
For the purposes of paragraph 2 of Article 20 of the Model Law (as it has the force of law in Australia), the scope and the modification or termination of the stay or suspension referred to in paragraph 1 of that Article, are the same as would apply if the stay or suspension arose under:
(a) the Bankruptcy Act 1966; or
(b) Chapter 5 (other than Parts 5.2 and 5.4A) of the Corporations Act 2001;
as the case requires.
The effect of that section 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.
14 Article 2 of Schedule 1 sets out the definitions which apply. The relevant definitions are set out in paragraphs (a), (b) and (d) as follows:
(a) "Foreign proceeding" means a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganization or liquidation;
(b) "Foreign main proceeding" means a foreign proceeding taking place in the State where the debtor has the centre of its main interests;
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(d) "Foreign representative" means a person or body, including one appointed on an 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
15 Article 4 provides, in effect, that this Court has the relevant jurisdiction and is a competent court to make the orders which are sought.
16 Articles 15, 16, 17, 20 and 21(1)(a) are the critical provisions of the Schedule for present purposes and provide as follows:
Article 15. Application for recognition of a foreign proceeding
1. A foreign representative may apply to the court for recognition of the foreign proceeding in which the foreign representative has been appointed.
2. An application for recognition shall be accompanied by:
(a) A certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or
(b) A certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or
(c) In the absence of evidence referred to in subparagraphs (a) and (b), any other evidence acceptable to the court of the existence of the foreign proceeding and of the appointment of the foreign representative.
3. An application for recognition shall also be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative.
4. The court may require a translation of documents supplied in support of the application for recognition into an official language of this State.
Article 16. Presumptions concerning recognition
1. If the decision or certificate referred to in paragraph 2 of article 15 indicates that the foreign proceeding is a proceeding within the meaning of subparagraph (a) of article 2 and that the foreign representative is a person or body within the meaning of subparagraph (d) of article 2, the court is entitled to so presume.
2. The court is entitled to presume that documents submitted in support of the application for recognition are authentic, whether or not they have been legalized.
3. In the absence of proof to the contrary, the debtor's registered office, or habitual residence in the case of an individual, is presumed to be the centre of the debtor's main interests.
Article 17. Decision to recognize a foreign proceeding
1. Subject to article 6, a foreign proceeding shall be recognized if:
(a) The foreign proceeding is a proceeding within the meaning of subparagraph (a) of article 2;
(b) The foreign representative applying for recognition is a person or body within the meaning of subparagraph (d) of article 2;
(c) The application meets the requirements of paragraph 2 of article 15;
(d) The application has been submitted to the court referred to in article 4.
2. The foreign proceeding shall be recognized:
(a) As a foreign main proceeding if it is taking place in the State where the debtor has the centre of its main interests; or
(b) As a foreign non-main proceeding if the debtor has an establishment within the meaning of subparagraph (f) of article 2 in the foreign State.
3. An application for recognition of a foreign proceeding shall be decided upon at the earliest possible time.
4. 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.
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Article 20. Effects of recognition of a foreign main proceeding
1. Upon recognition of a foreign proceeding that is a foreign main proceeding:
(a) Commencement or continuation of individual actions or individual proceedings concerning the debtor's assets, rights, obligations or liabilities is stayed;
(b) Execution against the debtor's assets is stayed;
(c) The right to transfer, encumber or otherwise dispose of any assets of the debtor is suspended.
2. The scope, and the modification or termination, of the stay and suspension referred to in paragraph 1 of the present article are subject to [refer to any provisions of law of the enacting State relating to insolvency that apply to exceptions, limitations, modifications or termination in respect of the stay and suspension referred to in paragraph 1 of the present article].
3. Paragraph 1 (a) of the present article does not affect the right to commence individual actions or proceedings to the extent necessary to preserve a claim against the debtor.
4. Paragraph 1 of the present article does not affect the right to request the commencement of a proceeding under [identify laws of the enacting State relating to insolvency] or the right to file claims in such a proceeding.
Article 21. Relief that may be granted upon recognition of a foreign proceeding
1. 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:
(a) Staying the commencement or continuation of individual actions or individual proceedings concerning the debtor's assets, rights, obligations or liabilities, to the extent they have not been stayed under paragraph 1 (a) of article 20; …
17 The Federal Court (Corporations) Rules 2000 have recently been amended to deal in rule 15A.3 with applications for recognition of a foreign proceeding under article 15 of the Model Law. There is also a practice note dealing with these applications. The practice note is Practice Note No 29.