EMEA News
Court Refuses Anti-Suit Injunction Brought by Bankrupt O.W. Supply & Trading Proceedings
Denmark's Commercial Court has refused to grant an anti-suit injunction to SwissMarine Corporation Limited (SwissMarine) to restrain proceedings brought against it by O.W. Supply & Trading A/S (OW), International law firm Reed Smith LLP reports.
The law firm says the decision highlights that "protection under national insolvency law may be sought for the very purpose of overriding contractual rights and obligations."
The OW entity was said to have been in the money at the time of its bankruptcy and has commenced numerous actions against its counterparties in Denmark, including SwissMarine.
However by the time the Danish Proceedings had been brought, SwissMarine had already commenced proceedings in England for declaratory relief against OW, declaring that it had no liability to OW under the 2002 ISDA Master Agreement, which was governed by English law.
SwissMarine argued that the anti-suit injunction was necessary because OW's Danish proceedings were in breach of the exclusive jurisdiction agreement under the ISDA Agreement.
However the judge ruled that the ISDA wording could not have been intended by either party to amount to an abandonment of the protection of their national insolvency regimes.
Indeed, much clearer wording would be need to have that effect, they said, and ultimately OW was entitled to bring proceedings in a non-exclusive jurisdiction.
"This decision highlights that in the event of insolvency of one of the parties, the insolvent estate may nevertheless seek to rely on its own national insolvency rules and bring proceedings before its own courts, regardless of the contractual position between the parties," commented Reed Smith.
"Protection under national insolvency law may be sought for the very purpose of overriding contractual rights and obligations. Whilst the English Courts may be prepared to grant declarations of non-liability in such circumstances and may refuse to recognise a foreign insolvency judgment, anti-suit injunctions are unlikely to be available to put an end to the proceedings brought for relief under a party’s national insolvency rules.
"Indeed, the English court stated in this case that, while a Danish insolvency judgment would not be recognised in England, it may be recognised elsewhere, and the judge appeared to accept that this was a legitimate purpose of OW’s pursuit."
Earlier this month it was reported that legal disputes resulting from the fallout from last year's OW Bunker bankruptcy could help clarify U.S. law as to whether it is the bunker broker or the physical supplier who has the maritime lien.
