March 15, 2017
The Chief Justice today issued the following statement about the adoption by Bermuda’s Commercial Court on March 9, 2017 of a new Practice Direction, ‘Guidelines on Communication and Cooperation between Courts in Cross-Border Insolvency Cases’.
Trading companies of all descriptions often face cash-flow problems and are unable to pay their debts as they fall due. In such cases, ‘restructuring proceedings’ are often commenced to reorganize the companies’ debts so that they can continue to operate in a more profitable way rather than going out of business altogether. Most international business is carried out by companies forming part of a larger group whose corporate members are incorporated in and/or doing business in different parts of the world. When a group of companies are restructuring their affairs through court proceedings in different countries, it is important for a successful outcome for the various proceedings to be carefully coordinated.
The Practice Direction gives effect, with minor modifications, to the Singapore-founded Judicial Insolvency Network (“JIN”) Guidelines. The JIN Guidelines are designed to increase the effectiveness of insolvent restructuring proceedings involving one or more companies where related proceedings are simultaneously taking place in multiple courts.
The JIN Guidelines were adopted in Singapore in September 2016 and JIN members include, in addition to Singapore and Bermuda, judges from Australia, BVI, Canada, Cayman, England & Wales, Hong Kong SAR and the United States.
Bermuda’s Commercial Court is believed to be the first offshore Court to formally adopt the JIN Guidelines.
There are currently more Bermuda-incorporated companies listed on the Singapore Stock Exchange than any other single foreign domicile.