Key takeaways

The courts are willing to make orders as may be appropriate in aid of foreign insolvency proceedings granted recognition under the Cross-Border Insolvency Act 2008 (Cth) ("CBIA"). The CBIA gives effect in Australia to the Model Law. These orders may extend to conferring examination powers, including where an equivalent Australian liquidator might wish to exercise similar rights.

Obtaining those orders will still require some evidence of the matters for examination and the assets the foreign entity is seeking to pursue. Orders made will be framed in an appropriately narrow way to facilitate examinations linked to that purpose, and not purposes at large.

In more detail

Amoma SÀRL ("Amoma") is a company incorporated in Switzerland and subject to a Swiss liquidation process. Amoma has a single potential asset in Australia. That asset is a claim for compensation under the Australian Consumer Law arising out of alleged misleading and deceptive conduct.

Justice McEvoy found, citing the decision of Justice Lee in Bradley, in the matter of Astora Women's Health, LLC v Astora Women's Health, LLC (No 2) ("Astora") (in which Baker McKenzie acted for the plaintiff), that the requirements for recognition of the Swiss liquidation proceeding as a foreign main proceeding were established for the purposes of recognition under the Model Law. Those requirements were:

1. The foreign proceeding met the definition in Art 2(a) of the Model Law.
2. The foreign representative was a person or body within the meaning of Art 2(d) of the Model Law.
3. The application satisfied the procedural requirements in Art 15(2) of the Model Law.
4. The application has been submitted to a court “competent to perform functions under the Model Law” pursuant to Art 4 of the Model Law and s10 of the CBIA.
5. The foreign proceeding is taking place in a state where the debtor has its “centre of main interests” and so should be recognised as a foreign main proceeding.

However, the Swiss body acting as trustee and representative of the estate of Amoma, also asked for orders pursuant to Art 21 of the Model Law (and s6 of the CBIA) to examine witnesses, take evidence and obtain information relating to the proposed proceeding and to have all the powers available to Australian liquidators insofar as they relate to the proposed proceeding.

The ability to confer such additional rights under Art 21 of the Model Law is qualified by the words "where necessary to protect the assets of the debtor or the interests of the creditors". Justice McEvoy was prepared to accept that, while Amoma could commence the proceedings without conducting examinations, this qualification in the Model Law was not so narrow as to preclude him from making orders to allow such examinations. His Honour relevantly ordered that:

1. Pursuant to s 6 of the CBIA and Art 21(1)(d) of the Model Law, the plaintiff may, as it deems appropriate, examine witnesses, take evidence and obtain delivery of information concerning Amoma’s assets, affairs, rights, obligations or liabilities, insofar as they relate to the proposed proceeding.
2. Pursuant to s 6 of the CBIA and Art 21(1)(g) of the Model Law, and subject to the exceptions for which s 8 of the CBIA provides, all powers available to liquidators or administrators under the provisions of the Corporations Act are available to the plaintiff, as if they were appointed under that Act, insofar as they relate to the proposed proceeding.
3. Pursuant to s 6 of the CBIA and Art 21(1)(g) and (e) of the Model Law, the plaintiff is authorised to, and has standing to, commence and conduct the proceeding.

The decision is a timely reminder, along with the decisions in Astora (where orders were made to address the publication and notification to claimants in an Australian class action and Thai Airways International Public Company³, that the Court is prepared to act flexibly where appropriate in aid of foreign insolvency proceedings.

Baker McKenzie represented Astora and Thai Airways in their respective applications for recognition under the Model Law.

1 Re Amoma SARL (No 2) [2023] FCA 1379 

2 UNCITRAL Model Law on Cross Border Insolvency ("Model Law")

3 International: Recognition of the Thai Airways business reorganisation proceeding in Australia under the Model Law - Baker McKenzie InsightPlus