Maritime Cross-Border Insolvency in China

Abstract

Due to the high degree of mobility of ships and the special operational structures of shipping companies, it is difficult to harmonise the cross-border insolvency regime with the maritime law regime governing ships. One of the typical examples is the recent bankruptcy of Hanjin Shipping Co Ltd. Chinese creditors were heavily affected by the bankruptcy of Hanjin. However, Hanjin never filed an application to have its Korean insolvency proceeding recognised in the People’s Republic of China (PRC). Nor did it commence any ancillary insolvency application under the Enterprise Bankruptcy Law of the PRC. Taking Hanjin’s bankruptcy as an example, this paper examines the current statutory regime of cross-border insolvency in the PRC in detail and analyses the approach adopted by the Chinese courts to resolve the conflicts that arise between the cross-border insolvency and maritime law regimes.