Victoria, Samnuggur and Titaghur
The Scottish Court of Session considers the interaction of Indian insolvency proceedings for three Scottish Companies that had also been placed into Administration in Scotland.
The Victoria Jute Company Limited ("Victoria"), The Samnuggur Jute Factory Limited ("Samnuggur") and Titaghur plc ("Titaghur") were all incorporated in Scotland, but had been carrying out their business in India.
Upon failing to pay pension contributions required under their employers' pension schemes, each of the three companies became subject to an order issued by the (Indian) Employee's Provident Fund, the effect of which was to seize the companies' entire assets. In addition, various orders were made by the High Court of Kolkata prohibiting Victoria and Samnuggur from dealing with or granting charges over their assets. Titaghur became subject to liquidation proceedings in India, whilst a winding up petition in India is pending against Samnuggur.
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UVW v XYZ (A Registered Agent) BVIHC (COM) 108 of 2016
The BVI High Court granted Norwich Pharmacal relief against a registered agent for a judgment debtor who was subject to an interim freezing order.
The judgment creditor had obtained an interim freezing order against the judgment debtor, and was seeking general information as to the assets of the judgment debtor, following a pattern of concealment of assets to frustrate enforcement of a foreign judgment. The judgment debtor had failed to comply with an overseas freezing order and had been held in contempt of court for failing to disclose assets.
The judgment creditor identified a company registered in the BVI as belonging to the judgment debtor, and applied to the BVI High Court for third party disclosure orders against the local registered agent to police the freezing order by obtaining information which could lead to the identification of assets. The order sought was for Norwich Pharmacal relief requiring the Respondent to disclose certain documents or information to the Applicant. In order to trigger Norwich Pharmacal equitable jurisdiction, there has to be something sufficiently unconscionable in the wrongdoer's conduct.
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New Insolvency Rules for England and Wales
On 6 April 2017 the Insolvency (England and Wales) Rules 2016 will come into force. These new rules will replace the Insolvency Rules 1986, as amended, in its entirety. The new rules will aim to simplify and modernise the 1986 rules, as well as making some additions to the content of the law. One interesting legal change that the new rules will make is that creditors will be given the opportunity to choose not to receive communications from an insolvency practitioner if they wish to. This is just one of several significant alterations to existing law.
The new rules will not apply to Scotland and Northern Ireland, but will apply retrospectively to existing appointments, as well as to all future insolvency appointments, in England and Wales.
New Scottish Bankruptcy Legislation
The Bankruptcy (Scotland) Act 2016 (the "Act") comes into force on 30 November 2016. The Act consolidates a number of pieces of Scottish bankruptcy legislation, including the Bankruptcy (Scotland) Act 1985, the Bankruptcy (Scotland) Act 1993 and the Bankruptcy and Debt Advice (Scotland) 2014.
Whilst not changing Scottish bankruptcy law in essence, the Act has a logical structure to allow for effective and simpler navigation through the legislation. It aims to make bankruptcy policy more accessible. The Act has also amended the basis of conversion of foreign currency claims so that a Trustee in Bankruptcy will not have to set the exchange rate to that published in the newspapers, but will be able to set it to any reasonable rate readily available.
Regulating Debt Relief in the Czech Republic
Under the Czech Insolvency Act, a debtor is able to engage in a debt relief procedure as a means of dealing with insolvency. Currently making its way through Czech parliament is an amendment to this aspect of Czech law, to the effect that any debtor filing for debt relief must be represented by someone accredited by the Ministry of Justice, be it an insolvency administrator, lawyer or notary. Failure to comply with this new provision could result in a hefty fine.
When bought into force, this amendment should prevent individuals or companies which are not sufficiently accredited from offering debt relief services to debtors, thus tightening regulation in this particular area. The new provision will also allow the court discretion as to whether or not to grant a bankruptcy order in the event that the debt relief petition fails or is refused by the Court for not being correctly represented.
This update was written by Alan Bennett, Olivia Bridger and Rachel Maddocks.