Précis: The automatic stay of proceedings that arises upon recognition of a foreign insolvency proceeding does not automatically include existing Federal Court in rem proceedings.
Facts: Following well publicized financial difficulties, Hanjin Shipping obtained a creditor protection order from Korean courts under the Debtor Rehabilitation and Bankruptcy Act of Korea. The Trustee of Hanjin then made this application to the British Columbia Supreme Court under the Companies’ Creditors Arrangement Act for recognition of the Korean proceeding as the main proceeding and for a stay of any proceedings as against Hanjin and its property. At the time of the application, there were several proceedings already commenced against Hanjin in the Federal Court and at least two vessels that had been operated by Hanjin had been arrested in those Federal Court proceedings.
Decision: Application allowed, except in respect of the Federal Court proceedings.
Held: The contentious issues relate to the Federal Court proceedings. “In recognition that in rem proceedings are before the Federal Court in respect of the vessels, Hanjin Vienna, Hanjin Scarlet, and Hanjin Marine, this order shall not apply to those proceedings (including caveators) unless and to the extent the Federal Court of Canada may determine in the exercise of its own unfettered jurisdiction and discretion.”