Media Releases

Paving the Way for Improved Coordination of Cross-Border Insolvency Proceedings: Adoption of the Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters

 

1 February 2017 - The United States Bankruptcy Court for the District of Delaware and the Supreme Court of Singapore will formally implement the Guidelines for Communication and Cooperation between Courts in Cross-Border Insolvency Matters (“the Guidelines”) today. This is the first time that a common framework has been adopted for courts to communicate and coordinate with each other in cross-border insolvency matters on a global level.  With this, cross-border insolvency matters can be better managed for the benefit of debtor companies, banks and other creditors, employees and other stakeholders. To illustrate, a court may communicate with another court to coordinate how the cases in each jurisdiction should proceed so that issues are heard in the most logical and efficient way.   The Guidelines also provide a structure for joint hearings, enabling 2 or more courts to thereby simultaneously record evidence and hear arguments. This will undoubtedly save costs and time. Such coordination between the courts of different jurisdictions should lead to better financial returns for all parties involved.

2          The Guidelines were worked out and agreed among judges of several jurisdictions who had participated in discussions at the first meeting of the Judicial Insolvency Network (“the JIN”) which was held in Singapore in October 2016. Following that agreement, the various judges involved took the Guidelines back to their respective courts to work on the adoption of the Guidelines. The Guidelines lay down a common framework on how courts in different jurisdictions can and should communicate and cooperate with each other. Prior to the existence of the Guidelines, any communication between courts was carried out on an ad hoc basis and there was great uncertainty over whether and how courts may communicate with each other when faced with cross-border insolvency cases. It was also difficult to ensure that different courts were fully aware of what was happening in other jurisdictions. This meant that court orders may conflict or even hinder proceedings that were taking place in other jurisdictions. This could result in stakeholders losing out. Seen in this context, the establishment of uniform guidelines across multiple jurisdictions will increase certainty in the process, thus fostering greater and more fruitful communication. 

3          The interests of stakeholders can be better protected and considered with the adoption of the Guidelines which would open up communication between courts. The framework created by the Guidelines provides a general roadmap for how courts can and should communicate. In appropriate situations, joint hearings involving the different courts may even be held, though each court will of course retain its independence and impartiality. [See infographics enclosed]

4          The development of the Guidelines and the establishment of the JIN were first mooted by the Chief Justice in early 2016. Over the past year, the Supreme Court has worked to make concrete these plans by reaching out to like-minded commercial courts around the world, which culminated in the inaugural meeting of the JIN in Singapore in October 2016. It is expected that a number of other jurisdictions will follow closely behind Delaware and Singapore and adopt the Guidelines in the near future. It is hoped that, before long, the Guidelines will circle the globe. The JIN will also continue to develop other initiatives to promote judicial cooperation relating to cross-border insolvency cases. On a broader level, this will help cement Singapore’s position as a financial and legal hub, both regionally and globally.

 

SUPREME COURT
1 FEBRUARY 2017

 

 

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