England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		07/09/2016

Mr Justice Norris:

1. STX Offshore & Shipbuilding Co Ltd ("STX") is a Korean shipbuilding company which until very recently had a registered branch office in London. STX has a wholly owned Chinese subsidiary which also undertakes shipbuilding ("Dalian").
2. On 27 June 2012 Dalian entered into five shipbuilding contracts ("the Zodiac Contracts"), one with each of the five applicants ("the Buyers"), who are Liberian companies. The Zodiac Contracts provided for the delivery of the five vessels in the period from the end of October 2014 to the end of April 2016 and for payments by instalments over that period. In each case there was a separate side agreement which had the effect of reducing the price by $6 million for each vessel ("the Sideletter"). The Zodiac Contracts are in a standard form and are governed by English law.
3. On 4 July 2012 STX entered into performance bonds ("the Guarantee") with the Buyers unconditionally and irrevocably guaranteeing the due and faithful performance by Dalian of the Zodiac Contracts. The Guarantee stated :-

"This Guarantee is governed by the laws of England and any dispute arising out of this guarantee may be referred to the non-exclusive jurisdiction of the Courts of England"

4. Turmoil in the global shipbuilding market meant that Dalian entered into a Chinese insolvency process (I deliberately avoid categorizing it as a restructuring or as a liquidation) on 6 June 2014, before the steel had been cut for any of the hulls, and before the Buyers had paid any instalments. It was made clear that the ships would not be built by a notice from the Chinese office holder dated 27 August 2014. This referred to the Enterprise Bankruptcy Law of China and stated that each contract "shall be deemed to be rescinded". The Buyers say that under English law that notice constituted a renunciatory and/or anticipatory repudiatory breach of each of the Zodiac Contracts giving rise to a claim for damages to be assessed by reference to (a) the increased cost of acquiring a replacement vessel and (b) profits lost because of an inability to trade a vessel from the due delivery date under the Zodiac Contracts until such time as a replacement vessel can be delivered. The total claim is of the order of US$90 million.
5. The Chinese office-holder rejected those claims on 18 November 2014. So the Buyers turned to the Guarantee. But STX did not acknowledge liability. So the Buyers commenced proceedings in the Commercial Court by a claim form dated 30 January 2015. STX filed a Defence on 1 June 2015.
6. The nature of the Defence was as follows:-

a) The obvious inference from the Sideletter is that the parties intended to mislead third parties as to the true price payable under the relevant shipbuilding contract, and as a result the Zodiac Contracts are unenforceable on grounds of illegality. If the Zodiac Contracts are unenforceable then Dalian had no obligations which the Guarantee could support: so there is no claim under the Guarantee. (In their Reply the Buyers say that this arrangement came about at the request of Dalian, and they simply concurred in it).

b) Since the Enterprise Bankruptcy Law of China enabled the Chinese officeholder to bring the contracts to an end, the exercise by him of that statutory power could not amount to a repudiatory breach of the Zodiac Contracts. The parties are therefore confined to whatever rights the contract gives them.

c) The terms of the Zodiac Contracts properly construed do not entitle the Buyers to damages but confine them simply to the return of instalments plus interest: since Dalian has received no instalments, it is not in breach of any obligation, and there is no claim under the Guarantee.

d) The losses claimed are excessive (though STX simply puts the Buyers to proof, rather than advancing any positive case).

e) Dalian's obligation to start building the vessels had not in fact arisen, because the Zodiac Contracts provided for the Buyers to obtain a performance guarantee from their parent company which they had not in fact done. If the obligation to commence building had not arisen, nor had the obligation to deliver. Accordingly there cannot be any claim for lost profits: so STX is not liable to pay that head of claim. (In their Reply the Buyers say that there was a collateral agreement which varied this requirement, but in the alternative the requirement was waived by Dalian, and in the further alternative Dalian is by conduct estopped from requiring compliance with the article).

7. On 20 November 2015 the Commercial Court made an Order giving directions for the conduct of this case. It provided for disclosure to be made by 12 February 2016 (and it has taken place although there are outstanding disputes as to the adequacy). Witness statements of fact were to have been exchanged by 8 April 2016. Expert reports were to be exchanged by 13 May 2016. There was to be one expert for each party as to Chinese law, whose evidence was to be confined to opinion whether to the Chinese insolvency process amounted to a declaration of bankruptcy proceedings under Chinese law (which is relevant to the definition of "default" under the Zodiac Contracts). There was to be one expert for each side on quantum: the Buyer's expert is German. Neither witness statements nor expert reports have been exchanged. The length of the trial is estimated as four days (plus pre-reading) and is fixed for 12 December 2016. Although there has been slippage in compliance with the Order for Directions neither side had by 22 June 2016 applied to the Commercial Court to the vacate trial and re-fix the date: they were engaged in discussions about a revision of the timetable to achieve that date.
8. On 27 May 2016 the directors of STX presented a petition to the Seoul Central District Court (Bankruptcy Division) for the commencement of rehabilitation proceedings in respect of STX. That same day the Korean court imposed a moratorium pending the hearing of that petition. On 7 June 2016 the Korean Court made an order commencing rehabilitation proceedings and appointing the CEO of STX, Mr Lee, as its administrator.
9. As its name implies, a rehabilitation proceeding is a form of "turnaround" or "rescue" proceeding under the Korean Debtor Rehabilitation and Bankruptcy Act ("the DRBA"), similar to Chapter 11 proceedings under the US Bankruptcy Code. The object is to promote the restructuring of the indebtedness of STX according to a plan approved by the creditors and by the Korean Court. In the present case the plan being formulated is for payment of 7.25% of admitted or established claims in cash over three years commencing 2024, and for treatment of the balance of 92.5% as a "debt-for-equity" swap.
10. To achieve that objective, when the Korean Rehabilitation Court issued its commencement order the effect of the DRBA was that enforcement against STX became prohibited or (if current) suspended; and so did litigation. What then happens under the provisions of the DRBA is that the administrator prepares a list of all claims by creditors. If the creditor does not agree with that list, then that creditor must file a proof of claim within a limited period. This will either be accepted or rejected by the administrator.
11. If the administrator rejects the claim, then the creditor may commence "a confirmatory action" in the Rehabilitation Court, again within a limited period.
12. If the creditor is not satisfied with the outcome of the review by the Korean Rehabilitation Court then the creditor may file an "objection" (again within a limited period) and the case is transferred to the Korean civil courts as an "objection proceeding".
13. Mr Lee applied in England to have effect given to the Korean rehabilitation proceedings. On the 23 June 2016 by Order of Mr Simon Monty QC ("the Recognition Order") the rehabilitation proceedings were recognised as "the foreign main proceeding" under the Cross Border Insolvency Regulations 2006 in accordance with the provisions of Schedule 1 ("the Model Law"). The Model Law is, of course, the enactment in Great Britain of the UNCITRAL Model Law. In interpreting the Model law the English Court must have regard to its international origin and to the need to promote uniformity in its application and the observance of good faith: (see Article 8),
14. On the making of a recognition order, Article 20.1(a) of the Model Law provides that:-

"…commencement or continuation of individual actions….. concerning the debtor's assets, rights obligations or liabilities is stayed."

This stay is automatic. Article 20.2 describes its nature and definies its scope and effect by drawing on established rules in relation to bankruptcy and liquidation. But Article 20.6 says that

"the court may… modify…such stay and suspension or any part of it, either altogether or for a limited time, on such terms and conditions as the court thinks fit….."

provided that the Court is satisfied that the interests of creditors and other persons interested are adequately protected.

15. On the making of a recognition order Article 21 of the Model law enables the Court, where necessary for the protection of the assets of the debtor or the interests of the creditors, to grant certain discretionary relief including

"any additional relief that may be available to a British insolvency officeholder under the law of Great Britain, including any relief provided under paragraph 43 of schedule B1 to the Insolvency Act 1986".

16. In cases where the foreign main proceeding is in the nature of a restructuring rather than a liquidation it has become the practice of the English Courts as a matter of discretion to grant the whole of the relief available under paragraph 43 of Schedule B1 and to modify the automatic stay to align it with those provisions: Transfield ER Cape Limited [2010] EWHC 2851.
17. Mr Monty QC followed this course. Paragraph 2 of the Recognition Order begins:-

"Pursuant to articles 20(6) and 21(1)(b) of the Model Law, the stay and suspension in article 20(1) of the Model Law is modified as follows and additional relief is granted in the following terms …."

18. Paragraph 3 of the Recognition Order says that save for certain proceedings that are identified in the Schedule (which were permitted to continue to the extent identified) no legal process might be continued against STX except with the consent of the Administrator or the permission of the Court. The excepted proceedings which were permitted to continue were legal proceedings where the argument had concluded, and only judgment or award and consequential matters remained.
19. The judge knew about the Commercial Court action between the Buyers and STX. That is because as part of his duty of full and frank disclosure (see Re OGX Petroleo [2016] EWHC 25) the administrator, Mr Lee, had informed the judge about it. In the light of what Mr Lee told him, the judge thought it appropriate simply to grant recognition and leave it to the Buyers (from whom he had not heard) to apply for the stay to be lifted: compare OGX (supra) at para. 59.
20. The assessment of Mr Lee and those advising him as to the state of the Commercial Court action at the date of the recognition application may be summarised as follows. Requests for further information in relation to the statements of case had been answered on 7 June 2016. There were some outstanding disclosure issues: but no applications had been made. The parties having failed to meet the time ordered for exchange of witness statements, they had agreed 15 June 2016 as the date for exchange; but that was disrupted by the recognition application and was replaced by an agreement for exchange on 29 July 2016 (though that itself was overtaken by the Recognition Order). On STX's side, of their three witnesses, the statement of one was almost ready for exchange, and the other two were at a stage where some further questioning would be required before the statements could be finalised. As to the expert evidence, STX had a fairly detailed draft of preliminary reports from each of their experts.
21. Although in the recognition application Mr Lee himself described the case as "reasonably well advanced, the evidence filed on this present application by STX has emphasised how much remains to be done, the solicitor for STX expressing the view that "the parties could not possibly be ready for trial as early as December 2016", so that a re-fixing of the trial for June 2017 is necessary, coupled with the expenditure of at least as much again as the costs already incurred (a further £350-£450,000).
22. Mr Lee has been replaced as administrator of STX. The new administrator has rejected the Buyers' claim under the Guarantee. It has therefore been necessary for the Buyers to commence confirmatory proceedings in the Korean Rehabilitation Court. I received expert evidence as to the nature, timescale and prospective cost of these proceedings and of any objection proceedings in the event that the Korean Rehabilitation Court confirms the administrator's rejection of proof.
23. STX tendered the opinion of Mr Young Seok Lee, a licensed attorney in the Republic of Korea with almost 30 years' experience handling international or cross-border disputes: he is not a specialist insolvency lawyer. The Buyers tendered the opinion of ChiYong Rim, also a licensed attorney in the Republic of Korea of similar call, but with extensive experience of advising on personal bankruptcy, corporate liquidations, corporate reorganisations and workouts. From 1985 to 2007 he served as a judge in the Korean Courts (between 2005 and 2007 being the Senior Judge of the Bankruptcy Division of the Seoul Central District Court), is an internationally published author on insolvency matters, and was for the period from 2009 to 2013 a member or chair of a specialist subcommittee considering amendments to the DRBA. Both experts were careful and measured in their evidence: where there is a difference of emphasis between them I have given greater weight to the opinion of Mr Rim.
24. The Korean Courts are sophisticated independent organs of a democratic state and they and their judges are deserving of the greatest respect. They are rapidly accumulating experience of insolvent shipping and shipbuilding companies trading through contracts governed by English or New York law. This case is not about whether the English Commercial Court (as the domestic court) is "better" than a Korean Rehabilitation Court or the Korean Civil Courts (as the courts of the insolvency). What this case requires is an understanding of the respective processes available for the resolution of a particular dispute, and a consideration of which should be engaged in the light of the principles embodied in the Model Law.
25. As to the confirmatory proceedings, the experts were agreed that this is essentially a limited summary procedure involving a short hearing (or a series of short hearings at varying intervals) before the Rehabilitation Court to consider written material (including witness statements, opinions from foreign lawyers, and legal submissions). In straightforward claims (for example where only quantum is in issue) the process would take between six months and a year. But in complex claims (for example involving foreign law) the process would generally take over a year and anything up to 3 years (the more complex the issues the longer the time needed to deliberate on the arguments). Mr Rim acknowledged that his upper limit of three years derived from his experience of two other cases involving multiple confirmatory actions where the sheer bulk of claims may have impacted upon the progress of each. But the STX rehabilitation is likewise on a large scale, and will probably involve multiple claims. The costs would be of the order of US$200,000 on each side. In a case concerning a foreign law contract, if the foreign court adjudicated on that dispute, then the Korean court would probably suspend the confirmatory proceedings pending the outcome, and the adjudication of the foreign court would be very powerful evidence in the confirmatory proceedings with the Korean judge likely either to adopt it or to recommend the parties to agree to the disposal of the confirmatory claim on those terms.
26. If the confirmatory proceedings do not provide an outcome satisfactory to the Buyers they can commence "objection proceedings". As to these, a significant fee (in this case about US$350,000) would be payable and further costs incurred. The amount of those further costs is, in the light of the evidence, less than wholly clear: but I think would be of the order of a further US$200,000 (taking into account that this is a conventional trial process but is not restricted to the material produced in the confirmatory action. The objection proceedings would, I am satisfied, take at least a further year.
27. It is in this context that the Buyers, having had their claim rejected by the new Administrator and having commenced objection proceedings, seek the permission of the Court to the continuation of the Commercial Court proceedings (or, as it was put in argument, a lifting of the stay imposed by the Recognition Order). (The Buyers sought the permission of the administration to that continuation, but their request was rejected without reasons being supplied). The sole object of the continuation is to obtain an adjudication of the claim, with a view to presenting the outcome to the Korean Rehabilitation Court in the current confirmatory proceedings. It is accepted that any judgment obtained from the Commercial Court cannot be enforced against STX: and it is accepted that the conversion of the claim into a judgment cannot alter the priorities within the Korean insolvency. The Buyers will continue to have an unsecured claim: but it will be one verified and quantified by the Commercial Court, which it is up to the Korean Rehabilitation Court to adopt or reject.
28. The Korean rehabilitation plan is a collective process designed to achieve a coordinated, global solution for all stakeholders in the STX insolvency: it includes addressing the claims of individual creditors through an orderly resolution of claims conducted for the benefit of the creditors as a whole. In making the Recognition Order the English Court acknowledged that collective process under the control of the Korean Court, and extended to the Korean officeholder the assistance it would give to a domestic administrator by granting the "paragraph 43 stay" (subject to the ability of any affected creditor apply for permission to continue proceedings).,
29. In my judgment, under paragraph 43, an affected creditor applying for permission to continue existing proceedings bears the burden of making out the case for that relief. He must first identify the nature of the interest that he wishes to promote by obtaining that relief. He must secondly address the question whether the grant of such relief is likely to impede the achievement of the purpose of the insolvency proceeding (here, rehabilitation). He must thirdly enable the Court to balance his legitimate interests against the interests of other creditors, having regard to the nature and the probability of occurrence of prejudice on either side. An affected creditor making such an application under a modified stay imposed under the Model Law must in addressing these questions bear in mind that he is seeking to persuade the domestic court to interfere in the processes of the insolvency court. The list of relevant considerations is not exhaustive.
30. The Buyers are seeking to prosecute (in proceedings already commenced) an unsecured money claim, for the payment of damages, and to do so according to the law and in the domestic court stipulated for in the agreement which established the relationship between them and STX.
31. Unsecured money claims are, of course, amongst the claims to be addressed in the rehabilitation plan and would inevitably be caught in any liquidation process in the event that the rehabilitation plan is rejected. As Patten J pointed out in AES Barry Ltd v TXU Europe Energy Trading [2004] EWHC 1757 at [24] it will only be in "exceptional" cases that the court gives a creditor, whose claim is simply a monetary one, a right by the taking of proceedings to override and pre-empt the statutory machinery. The term "exceptional" is protean: but in this context I think it means that the applicant creditor must demonstrate a circumstance or combination of circumstances of sufficient weight to overcome the strong imperative to have all the claims dealt with in the same way (and in the instant case by the insolvency court). That said, a domestic court, recognising the general desirability of having one insolvency estate under the management of one insolvency court, should not be too ready to find the factors of "sufficient" weight (but, given the nature of the decision, is unlikely to be assisted by the extensive citation of judgments which simply show the assessments made by other judges).
32. In my judgment the following factors are of relevance in the instant case.
33. First, although the claim is a monetary one it is (and is acknowledged to be) a particularly complex one: one point in particular requires consideration.
34. It arises from the issue whether according to English law the underlying Dalian contracts are unenforceable on the ground of illegality.
35. The fact that English law is involved is not of itself sufficient. As Counsel for STX pointed out, although the parties have agreed that English law shall apply to the Guarantee (and to the Zodiac Contracts) and for the English courts to be the non-exclusive venue, that is but a contractual right which (like contractual rights generally) may be subject to interference in an insolvency. The Buyers must be taken to have known that the Guarantee was being provided by a Korean company, that in the ordinary course it would be Korean law that would govern its insolvency, and that something more would be needed if the verification and quantification of the Buyers' claim was to be removed from the ordinary insolvency process. As it was put in one American case (see Gercke below) as regards the normal position, "the intervention of insolvency proceedings requires the mandatory venue clause to yield to considerations of comity and the interests of all creditors… in an equality of distribution".
36. Counsel for STX argued that once the underlying factual disputes about how the Sideletter came into being had been resolved, the English law on illegality was "clear and well-known". This struck me as a bold submission in the light of the changes in the law even since the point was pleaded in the Commercial Court action. One only has to read the judgments in Patel v Mirza [2016] UKSC 42 to appreciate how accurate was the description by Prof Andrew Burrows in his "Restatement of the English Law Contract" (OUP, 2016) of the law of illegality as being "in a state of flux" (p.221), and the observation of Lord Neuberger (at paragraph [164]) that the different approaches adopted by members of the Supreme Court in recent cases had "left the law on the topic in the some disarray". That state has not been brought to an end by the decision that in the application of the doctrine of illegality regard must be had to the policy factors involved and to the nature and circumstances of the illegal conduct in determining whether the public interest in preserving the integrity of the judicial system should result in denial (on the grounds of illegality) of the relief claimed (see the judgment of Lord Toulson - with whom Baroness Hale, Lord Kerr, Lord Wilson and Lord Hodge agreed - paragraph [120]). Of course Patel v Mirza does render relatively clear and certain the law on illegality where a claimant has paid money to a defendant to carry out an illegal activity, and the illegal activity is not proceeded with. But that is not relevant to the dispute about the Zodiac Contracts: and the Supreme Court was clearly divided as to the extent to which the rule so articulated applied in other scenarios.
37. I can see why the application of this body of law through the medium of expert evidence and in the course of the summary review procedure should not be visited upon the Korean Rehabilitation Court. I find myself rather in the position in which Briggs J was in Cosco Bulk Carrier: Ltd v Armada Shipping SA [2011] EWHC 216. He was concerned with competing proprietary and/or contractual claims to the receipt of payments due under a sub-charter, made by Armada (a company subject to a Swiss liquidation) on the one hand Cosco (a creditor of Armada): so the claim was not a money claim typical of claims in insolvency (as the claim on the Guarantee in essence is). The resolution of the dispute involved a consideration of competing views, expressed at first instance (and once in the Court of Appeal) on the one hand and in the Privy Council on the other hand, about the juridical nature of a lien on sub-freights. He said (at para [61]) :-

" There is in my view an air of unreality in the submission that it will be either fair, just or convenient to visit upon a Swiss bankruptcy court the adjudication of an underlying dispute which is almost entirely governed by English law, concerns shipping matters and which is already the subject of two pending arbitration before experienced tribunal's pursuant to obligations in the contracts out of which the dispute has arisen. The Swiss court would be obliged to rely for the determination of most of the matters in issue on expert evidence as to English law (either from a single expert or competing experts) and its own relevant experience will be limited to Swiss insolvency law as to which… none of the parties have identified any specific issue to be decided".

I take the same view about the applicability of the law of illegality to the underlying Zodiac Contracts. Its application is uncertain to an exceptional degree.

38. Nor is that the only legal point of real difficulty: an issue arises whether, upon the true construction of the Zodiac Contracts, common law remedies are excluded and the Buyers confined the return of instalments. The interaction of contractual remedies and common law remedies for repudiatory breach (and the associated construction questions) were identified by Hamblen J in TeeKay Tankers Ltd v STX Offshore & Shipping Co [2014] EWHC 3612 as a matter of intricacy and complexity requiring extensive argument and citation of authority. His observations were made in the context of identifying a convenient forum: whereas for me the question is not one of "convenience" but of whether to depart from the strong imperative to leave matters to the insolvency court. That different context does not affect the analysis of the nature and the assessment of the significance of the issue which has to be resolved.
39. Second, it is in my judgment a factor of significant weight that there are already proceedings before the Commercial Court which are reasonably well advanced and on which the Buyers and STX have each expended considerable sums in preparation for trial in December 2016. Plainly the mere existence of proceedings is not of itself sufficient, for the automatic stay (modified to accord with paragraph 43) applies to existing proceedings. But the fact that proceedings have been commenced is a factor to be taken into account, and the nearer the outcome of the proceedings the greater the weight to be attached to that factor: note the exceptions made in the Recognition Order itself, and compare American Energy Group Ltd v Hycarbex Asia Ltd [2014] EWHC 1091 (Ch), where permission was granted to continue an existing 2-year old arbitration where the hearing was due to commence the following day.
40. Counsel for STX relied on Re Gercke and Homan 122 BR 621 (1991), a decision of the Bankruptcy Court for the District of Columbia under what was then section 304 of Chapter 11 of the US Bankruptcy Code. The applicants were the English administrators of Dominion: they applied in the District of Columbia to restrain Yorke from continuing proceedings which it had commenced there, which had a trial date two months hence (though the actual state of preparation is not clear). The US Court nonetheless granted an injunction restraining the Columbia proceedings in order to permit the English Court (as the insolvency court) to decide where the Yorke claim should be litigated. This is an illustration of similar (though not identical) principles being applied, and serves to underline the degree of respect that should be accorded to the insolvency court. But it is not otherwise helpful in this case.
41. Third, the Buyers want the adjudication and quantification of their claim under the Guarantee to be determined more speedily than is likely under the confirmatory review and objection proceeding process: and they wish to do that in order to be enfranchised when the rehabilitation plan is put to creditors.
42. So much for the nature of the interests which the Buyers seek to promote by asking the domestic court to permit them to continue the Commercial Court action. I turn to consider whether granting permission for the continuation of the Commercial Court action would impede the achievement of the rehabilitation plan. In my judgment it would not: rather it has the potential greatly to assist. It would enable the Korean Rehabilitation Court to suspend the Buyers' confirmatory action, and would then provide (almost certainly more speedily than could be achieved by the insolvency court itself) that court with an adjudication upon the issues which the Korean Rehabilitation Court could adopt or promote (or, if dissatisfied, ignore). There is no suggestion that completing the steps necessary to prepare the Commercial Court action for trial and participating in the trial will interfere in any material way with the formulation and prosecution of the rehabilitation plan or with addressing any of the other confirmatory actions. Given the size of the STX insolvency that is no surprise.
43. Counsel for STX submitted that it could be inferred from the fact that it gave permission to the administrator to expend insolvency estate funds in opposing the present application that the Korean Rehabilitation Court considered that permitting continuation of the Commercial Court action would interfere with the achievement of the rehabilitation plan. I do not consider that it is an inference properly made. All I can say is that the Korean Rehabilitation Court wanted the matter properly argued and tested before the domestic court.
44. Since permitting continuation of the Commercial Court action would not interfere with the rehabilitation process, I move to a balancing of the interests of the buyers and of the other creditors of STX. The interest of the Buyers is to obtain a verification and quantification of their claim expeditiously and (from their point of view) economically so that they can play a part in the formulation and adoption of the rehabilitation plan. The interest of the creditors as a whole is to ensure (a) that if possible the same rules and processes apply to all claims; (b) that the rehabilitation process shall proceed in an orderly way and without delay; (c) that so far as possible the administrator is not put to any extra administration expenses which would form the "top slice" of any recoveries and reduce the amounts for distribution. No particular interests were identified in the evidence.
45. Resolving a genuinely difficult issue of foreign law would assist rather than impede the insolvency process. It does entail treating the Buyers' foreign law claim in a way different from that in which other possible foreign law claims might be treated: but that is justified because of the nature of the dispute (a factor I regard as crucial) and because there are extant proceedings in which the precise issues have been defined, a trial ordered and imminent and preparation undertaken. The Buyers' claim will be adjudicated upon within the same timeframe as it would in the Korean Rehabilitation Court, and faster than would be the case if the confirmatory proceedings were followed by objection proceedings in the Korean civil court. The English timetable is governed by an order of the Commercial Court and I do not accept that it is probable that the parties must abandon that or that the Commercial Court would vacate the trial. In terms of expense to the administrator (and that is the focus here) there is little to choose between the two processes, though the English costs appear to be slightly higher: however, given the billions of dollars involved in the rehabilitation plan (US$6.7 billion) and the extent of the "haircut" which creditors must take the increase is of no materiality. In whatever forum the Buyers' claim is adjudicated documents will have to be translated and witnesses to travel and interpreters engaged. There is no disorder caused to the administration. There is no basis in the evidence for supposing that if the Buyers' are permitted to continue the Commercial Court action there will be a clamour for other creditors to do likewise: and if there are other creditors with English law claims against STX in respect of which STX has raised an illegality defence, then a ruling by the Commercial Court is likely to be of advantage in those cases also. There is no question of piecemeal realisation or unequal distribution or any undermining of the equal treatment of creditors in any distribution, features that would seriously undermine the object of having a single insolvency estate.
46. Being satisfied that the Korean Rehabilitation Court would be required to rule on an English law controversy that is more than usually difficult, that there are proceedings on foot to determine that issue which are at an advanced stage, that to permit those proceedings to continue would not impede the administration, and that taking that course does not unduly advance the interests of the Buyers over the interest of the creditors as a whole, I shall grant permission to continue the Commercial Court action.
47. There is also adjourned to the hearing before me an application to recognise Mr Jang as the replacement foreign representative for Mr Lee. I have considered that application and grant it.