The Cross-Border Insolvency Regulations 2006

PART 3 Court Procedure and Practice

Preliminary and interpretation

4.—(1) This Part applies to—

(a) any of the following applications made to the court under these Regulations—

(i) a recognition application;

(ii) an article 21 remedy application;

(iii) an application under paragraph 2(3) for an order confirming the status of a replacement foreign representative;

(iv) a review application; and

(b) any of the following orders made by the court under these Regulations—

(i) a recognition order;

(ii) an order granting interim remedy under article 19 of the Model Law;

(iii) an order granting remedy under article 21 of the Model Law;

(iv) an order confirming the status of a replacement foreign representative; or

(v) a modification or termination order.

Reviews of court orders—where court makes order of its own motion

5.—(1) The court shall not of its own motion make a modification or termination order unless the foreign representative and the debtor have either—

(a) had an opportunity of being heard on the question, or

(b) consented in writing to such an order.

(2) If the court makes a modification or termination order, the order may include such provision as the court thinks fit with respect to matters arising in connection with the modification or termination.

The hearing

6.—(1) At the hearing of the application, the applicant and any of the following persons (not being the applicant) may appear or be represented—

(a) the foreign representative;

(b) the debtor and, in the case of any debtor other than an individual, any one or more directors or other officers of the debtor, including—

(i) where applicable, any person registered under Part 23 of the Companies Act 1985(1) as authorised to represent the debtor in respect of its business in Scotland;

(ii) in the case of a debtor which is a partnership, any person who is a member of the partnership;

(c) if a British insolvency officeholder is acting in relation to the debtor, that person;

(d) if any person has been appointed an administrative receiver of the debtor or as a receiver or manager of the property of the debtor, that person;

(e) if a member State liquidator has been appointed in main proceedings in relation to the debtor, that person;

(f) if a foreign representative has been appointed in any other foreign proceeding regarding the debtor, that person;

(g) any person who has presented a petition for the winding up or sequestration of the debtor in Scotland;

(h) any person who is or may be entitled to appoint an administrator of the debtor under paragraph 14 of Schedule B1 to the 1986 Act(2) (appointment of administrator by holder of qualifying floating charge);

(i) if the debtor is a debtor who is of interest to the Financial Services Authority, that Authority; and

(j) with the permission of the court, any other person who appears to have an interest justifying his appearance.

Notification and advertisement of order

7.—(1) This paragraph applies where the court makes any of the orders referred to in paragraph 4(1)(b).

(2) The foreign representative shall send a certified copy of the interlocutor as soon as reasonably practicable to the debtor.

(3) The foreign representative shall, as soon as reasonably practicable after the date of the order, give notice of the making of the order—

(a) if a British insolvency officeholder is acting in relation to the debtor, to him;

(b) if any person has been appointed an administrative receiver of the debtor or, to the knowledge of the foreign representative, as a receiver or manager of the property of the debtor, to him;

(c) if a member State liquidator has been appointed in main proceedings in relation to the debtor, to him;

(d) if to his knowledge a foreign representative has been appointed in any other foreign proceeding regarding the debtor, that person;

(e) if there is pending in Scotland a petition for the winding up or sequestration of the debtor, to the petitioner;

(f) to any person who to his knowledge is or may be entitled to appoint an administrator of the debtor under paragraph 14 of Schedule B1 to the 1986 Act (appointment of administrator by holder of qualifying floating charge);

(g) if the debtor is a debtor who is of interest to the Financial Services Authority, to that Authority; and

(h) to such persons as the court may direct.

(4) Where the debtor is a relevant company, the foreign representative shall send notice of the making of the order to the registrar of companies before the end of the period of 5 business days beginning with the date of the order. The notice to the registrar of companies shall be in Form ML 7.

(5) The foreign representative shall advertise the making of the following orders once in the Gazette and once in such newspaper as he thinks most appropriate for ensuring that the making of the order comes to the notice of the debtor’s creditors—

(a) a recognition order,

(b) an order confirming the status of a replacement foreign representative, and

(c) a modification or termination order which modifies or terminates recognition of a foreign proceeding,

and the advertisement shall be in Form ML 8.

Registration of court order

8.—(1) Where the court makes a recognition order in respect of a foreign main proceeding or an order suspending the right to transfer, encumber or otherwise dispose of any assets of the debtor being heritable property, the clerk of the court shall send forthwith a certified copy of the order to the keeper of the register of inhibitions and adjudications for recording in that register.

(2) Recording under sub-paragraph (1) or (3) shall have the effect as from the date of the order of an inhibition and of a citation in an adjudication of the debtor’s heritable estate at the instance of the foreign representative.

(3) Where the court makes a modification or termination order, the clerk of the court shall send forthwith a certified copy of the order to the keeper of the register of inhibitions and adjudications for recording in that register.

(4) The effect mentioned in sub-paragraph (2) shall expire—

(a) on the recording of a modification or termination order under sub-paragraph (3); or

(b) subject to sub-paragraph (5), if the effect has not expired by virtue of paragraph (a), at the end of the period of 3 years beginning with the date of the order.

(5) The foreign representative may, if recognition of the foreign proceeding has not been modified or terminated by the court pursuant to its powers under the Model Law, before the end of the period of 3 years mentioned in sub-paragraph (4)(b), send a memorandum in a form prescribed by the Court of Session by act of sederunt to the keeper of the register of inhibitions and adjudications for recording in that register, and such recording shall renew the effect mentioned in sub-paragraph (2); and thereafter the said effect shall continue to be preserved only if such memorandum is so recorded before the expiry of every subsequent period of 3 years.

Right to inspect court process

9.—(1) In the case of any proceedings under these Regulations, the following have the right, at all reasonable times, to inspect the court process of the proceedings—

(a) the Secretary of State;

(b) the person who is the foreign representative in relation to the proceedings;

(c) if a foreign representative has been appointed in any other foreign proceeding regarding the debtor, that person;

(d) if a British insolvency officeholder is acting in relation to the debtor, that person;

(e) any person stating himself in writing to be a creditor of the debtor to which the proceedings under these Regulations relate;

(f) if a member State liquidator has been appointed in relation to a debtor which is subject to proceedings under these Regulations, that person; and

(g) the debtor to which the proceedings under these Regulations relate, or, if that debtor is a company, corporation or partnership, every person who is, or at any time has been—

(i) a director or officer of the debtor,

(ii) a member of the debtor, or

(iii) where applicable, a person registered under Part 23 of the Companies Act 1985 as authorised to represent the debtor in respect of its business in Scotland.

(2) The right of inspection conferred as above on any person may be exercised on his behalf by a person properly authorised by him.

Copies of court orders

10.—(1) In any proceedings under these Regulations, any person who under paragraph 9 has a right to inspect documents in the court process also has the right to require the foreign representative in relation to those proceedings to furnish him with a copy of any court order in the proceedings.

(2) Sub-paragraph (1) does not apply if a copy of the court order has been served on that person or notice of the making of the order has been given to that person under other provisions of these Regulations.

Transfer of proceedings—actions to avoid acts detrimental to creditors

11.  If, in accordance with article 23(6) of the Model Law, the court grants a foreign representative permission to make an application in accordance with paragraph (1) of that article, it may also order the relevant proceedings under British insolvency law taking place regarding the debtor to be transferred to the Court of Session if those proceedings are taking place in Scotland and are not already in that court.

(1)

1985 c. 6.

(2)

Schedule B1 was inserted by the Enterprise Act 2002 (c. 40), section 248(2) and Schedule 16.