PJSC Bank Finance and Credit, Re (Cross-Border Insolvency Regulations 2006)

Recognition under the Cross-Border Insolvency Regulations 2006 is mandatory where the statutory requirements are met, subject to the public-policy exception. A foreign bank liquidation may qualify as a foreign proceeding even where it is administered by a non-judicial public body, provided that the debtor’s assets and affairs are subject to that body’s control or supervision. The proceeding must be collective, insolvency-related and directed to liquidation or reorganisation. A foreign representative may be the statutory liquidator or an authorised officer to whom liquidation powers have been delegated. Recognition as a foreign main proceeding follows where the debtor’s centre of main interests is in the foreign state. Service on the debtor may be dispensed with where the applicants have exclusive control of its affairs and service would serve no purpose.

The authorised officer of the Deposit Guarantee Fund of Ukraine and the Fund applied for recognition of the liquidation of PJSC Bank Finance and Credit under the Cross-Border Insolvency Regulations 2006. The Bank had entered provisional administration and was subsequently placed into liquidation in Ukraine. The application raised whether the liquidation was a foreign proceeding under the GB Model Law, whether the applicants were foreign representatives, whether the proceeding was a foreign main proceeding, whether the procedural and evidential requirements had been met, and whether public policy or service requirements prevented recognition.

1. The Court recognised the Bank liquidation as a foreign main proceeding.
2. The Ukrainian liquidation was a collective proceeding because creditors could claim in the liquidation and their claims were dealt with from available assets according to statutory priorities. It was judicial or administrative for the purposes of article 2(i) of the GB Model Law.
3. A non-judicial administrative body may constitute a foreign court where it has formal control or supervision of the foreign proceeding. The Deposit Guarantee Fund had control of the Bank’s assets and liquidation. Its statutory independence and extensive managerial, supervisory and asset-recovery powers meant that it fell within the definition of foreign court. Limited court supervision in Ukraine did not prevent that conclusion. The Court applied the approach noted in Re Sanko Steamship Co Ltd [2015] EWHC 1031 (Ch).
4. The liquidation was commenced pursuant to Ukrainian provisions dealing specifically with insolvent banks. It was therefore pursuant to a law relating to insolvency, notwithstanding that the relevant provisions were contained in banking and deposit-guarantee legislation.
5. The Fund was the statutory liquidator. Ms Groshova was an authorised officer with delegated liquidation powers. Despite the division of responsibilities and express limitations on Ms Groshova’s authority, both applicants were authorised to administer the liquidation and were foreign representatives.
6. The requirements of article 15 were satisfied by the translated resolutions and other evidence. Formal certification was unnecessary because the documents constituted acceptable evidence under article 15(2)(c). The Bank’s registered office and administrative operations were in Ukraine, and the statutory presumption of COMI was not displaced. The liquidation was therefore a foreign main proceeding under article 17(2)(a).
7. No public-policy consideration prevented recognition. The service requirement in paragraph 21 of schedule 2 to the CBIR was waived because the applicants had full control of the Bank’s affairs and service on it would serve no purpose.

First-instance decision of the High Court (Chancery Division). No prior appellate decision is stated in the judgment.