JIN Guidelines strengthen court-to-court cross-border cooperation in insolvency cases The Supreme Court Building in Singapore

JIN Guidelines strengthen court-to-court cross-border cooperation in insolvency cases

Recent adoptions by courts in Singapore, Bermuda, Delaware, New York and London of the Judicial Insolvency Network Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters further improve a robust network of judges.

In October 2016, 11 insolvency judges from 8 jurisdictions met to establish the Judicial Insolvency Network (‘JIN’). JIN, a network of insolvency judges from around the world, aims to encourage communication and cooperation amongst national courts by pulling together the best practices in cross-border restructuring and insolvency. JIN wishes to facilitate cross-court communication and cooperation, which has become critical in today’s increasingly globalised economy. During the conference an exchange of views took place with the idea of developing a set of guidelines conducive to communication and cooperation in cross-border restructuring and insolvency. These JIN Guidelines provide a framework for parties in cross-border restructuring and insolvency to customise protocols to facilitate court-to-court communication and cooperation in each case. The Supreme Court of Singapore hosted the conference, with as participants and observers: Australia (Federal Court and New South Wales), the British Virgin Islands, Canada (Ontario), the Cayman Islands, England & Wales, Hong Kong SAR and the United States (Delaware and Southern District of New York). Judicial Commissioner Aedit Abdullah and Judicial Commissioner Kannan Ramesh represented the Singapore judiciary in developing this initiative. A few weeks earlier, Mr Ramesh had given an interesting presentation during an insolvency regulators’ conference, called ‘Cross-Border Insolvencies: A New Paradigm’, sketching the background of what is now known as the Judicial Insolvency Network Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters (‘JIN Guidelines’). See asiaone.com and bobwessels.nl.

Arrangements for the coordination of proceedings by most courts from these jurisdictions were made on an ad hoc basis, which delays the process of court-to-court communication and coordination. There is increasing international recognition that efficient communication and co-operation between courts in different jurisdictions can assist the smooth conduct of cross-border insolvency cases. After an introduction with the overarching objective of the JIN Guidelines, 14 guidelines follow: 1 – 6 on adoption and interpretation, 7 – 9 on communications between courts, 10 – 11 regarding appearance in court, and 12 – 14 with consequential provisions, including the use of a ‘protocol’, and an Annex A on the conduct of joint hearings.

On February 1, 2017 the Singapore Supreme Court issued the JIN Guidelines. In the weeks that followed, the US Bankruptcy Court for the District of Delaware, the Commercial Court of Bermuda and the US Bankruptcy Court for the Southern District of New York adopted the JIN Guidelines. Interestingly, on May 5 2017, Sir Geoffrey Vos, Chancellor of the High Court of England and Wales, approved the adoption of the JIN Guidelines, as part of the court’s Chancery Guide.

In para. 25.31 of this Guide an explanation follows:

‘25.31 There are, at present, three principal sets of guidelines for court-to-court communications which might be adopted, with appropriate modifications, in such cases. These are the American Law Institute/International Insolvency Institute Guidelines Applicable to Court-to-Court Communications in Cross-Border Cases; the EU Cross-Border Insolvency Court-to-Court Communications Guidelines; and The Judicial Insolvency Network Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters.'

It is unfortunate that in the reference to ‘the ALI-III Guidelines’ the Chancery Guide has supplied an incorrect link, which will mislead users unless it is corrected. The link actually leads to an earlier version of the Guidelines, produced in 2000 for use within the NAFTA countries USA, Canada and Mexico. In a subsequent project, the Global Insolvency Principles Project, launched in 2006 as a joint venture of the ALI and III Professor Fletcher (University College London) and I served as Reporters for the project. The Report, published in 2012, includes an amended and updated set of Global Guidelines for Court-to-Court Communications, and it is this text which can properly claim to be the ‘ALI-III Guidelines’. The draft has been modified to make the guidelines suitable for use in a global context (common law or civil law jurisdictions) in the absence of any treaty or other formal arrangements (such as the NAFTA, or the EU Regulation) between the states whose courts happen to become involved in a given insolvency case. See for the text iiiglobal.org or ali.org. The set of principles and guidelines presented in this report may, I feel, even claim to be more than a number of non-binding soft law rules, as the Supreme Court of the United Kingdom (Conjoined Appeals in (1) Rubin & Anor v Eurofinance SA & Ors and (2) New Cap Reinsurance Corp Ltd & Anor v Grant and others) [2012] UKSC 46 (24), referred to it in the year of its publication: ‘… the modern approach in the primary international and regional instruments, the EC Insolvency Regulation on Insolvency Proceedings … and the Model Law, which is that the jurisdiction with international competence is that of the country of the centre of main interests of the debtor (an expression not without its own difficulties). It is ultimately derived from the civil law concept of a trader’s domicile, and was adopted in substance in the draft EEC Convention of 1980 as a definition of the debtor’s centre of administration: see Report by M Lemontey on the draft EEC Bankruptcy Convention, Bulletin of the European Communities, Supp 2/82, p 58; American Law Institute, Transnational Insolvency: Global Principles for Co-operation in International Insolvency Cases (2012), Principle 13, pp 83 et seq.’

It was this version of 2012 which was subsequently used as the basis for the EU Cross-Border Insolvency Court-to-Court Cooperation Principles, as well as the Communication Guidelines (‘EU JudgeCo Guidelines’), also mentioned in the Chancery Guide. They were published in 2015 and are now sanctioned for use by the EU in relation to the Recast Insolvency Regulation (see Recital (48)). These EU Principles include principles on cross-border insolvency case management of courts and the equal treatment of creditors and principles about the judicial decision itself, on its reasoning and for instance on providing a stay or moratorium. Several principles relate to the course of the proceedings, such as notifications and authentication of documents, and principles on the outcome of judicial cooperation, for instance cross-border sales, assistance to a reorganisation or rules for binding creditors to an international reorganisation plan. The 26 Principles are accompanied by 18 EU Cross-Border Insolvency Court-to-Court Communications Guidelines (‘EU JudgeCo Guidelines’), a set of very practical guidelines to facilitate communications in individual cross-border cases. Both the Principles and the Guidelines are specifically drafted to function in the context of the EU Insolvency Regulation (recast). See my blog.

The ALI-III Guidelines, the EU JudgeCo Guidelines and the JIN Guidelines will strengthen efficient and effective communication between courts in insolvency cases with cross-border effects. Especially the EU rules attempt to overcome present obstacles for courts, such as formalistic and detailed national procedural law, concerns about a judge’s impartiality, uneasiness with the use of certain legal concepts and terms and, evidently, language. Where the JIN Guidelines further build on existing experience and tested resources, especially in cross-border cases, they will significantly contribute to a robust and efficient network of judges.


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