Vol 4 (2007) - Issue 3

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Court-to-Court Communication – The Benefits and the Dangers

At the INSOL International Annual Regional Conference held in Cape Town in March, the concluding session was on global trends in judicial cooperation.
The panel was composed of experienced judges from four separate common law jurisdictions: Mr Justice Lightman from the High Court of Justice of England
and Wales, Mr Justice Barrett from the Supreme Court of New South Wales, Mr Justice Kawaley from the Supreme Court of Bermuda and Judge Gonzales from the
US Bankruptcy Court for the Southern District of New York. They addressed four different topics.

The first topic was the transmittal of funds from ancillary to main proceedings, including a discussion of the recent decision of the English Court of Appeal in Re HIH Casualty and General Insurance Ltd [2006] EWCA 732, itself the subject of Lloyd Tamlyn’s thoughtprovoking article in a recent edition of this journal. The
second and third topics were discussions of the developing doctrine of comity, with particular reference to the recent decision of the Privy Council in Cambridge Gas Transport Corpn v Official Committee of Unsecured Creditors of Navigator Holdings plc [2006] UKPC 26 and the judges’ experience of the operation of Chapter 15 of the US Bankruptcy Code.

The fourth topic provoked the liveliest debate. It was on the subject of direct communication between courts and provided a fascinating insight into present judicial thinking on the benefits and dangers of communication between judges exercising insolvency jurisdiction in different countries.

The debate grew out of the recognition that, in the context of cross-border insolvency, there are occasions on which the supervisory role of different courts in different jurisdictions can be facilitated by direct communications between judges. The American Law Institute published its Guidelines Applicable to Court-to-Court Communications in Cross-Border Cases in May 2000. Article 25 of the UNCITRAL Model Law on Cross-Border Insolvency, recently enacted in England in a slightly modified form by the Cross-Border Insolvency Regulations 2006 and in the US by Chapter 15 of the Bankruptcy Code, has given what is (in some jurisdictions) the necessary legislative foundation for this development.

There are long-established procedures by which the courts of one country have been accustomed to communicate with the courts of another. These include
letters of request (which find their modern form in England in section 426 of the Insolvency Act 1986) and communication through diplomatic channels.
However, communications of this type can be cumbersome and will not always be sufficiently flexible to ensure that the interests of justice are served. None of these older procedures expressly contemplate that a judge in one country will simply telephone or e-mail a judge in another.

In those countries in which the Model Law has been enacted in its unmodified form, Article 25 requires the local court to cooperate to the maximum extent possible with a foreign court and entitles the local court to communicate directly with, or to request information or assistance directly from, a foreign court. In England (unlike the US) the requirement to cooperate has been softened so that the obligation to cooperate to the maximum extent possible is expressed by the word ‘may’ rather than the word ‘shall’, but the entitlement to communicate has been enacted in an unmodified form.

In summary, therefore, Article 25 enacts the concept of direct communication, which explicitly authorises judges in different jurisdictions to communicate with each other by telephone, e-mail or any other form of direct correspondence.

This development is one which some court systems find difficult to accommodate, because of an ingrained perception that such direct communication might undermine the principle that courts in one jurisdiction should not interfere in or seek to influence decision-making which properly belongs to the courts of another. It is to be welcomed that there is a move away from the placing of too much weight on concerns of that kind. As a matter of principle, there is no reason why judges should be reticent in communicating with their counterparts, so long as sight is not lost of the judicial functions which they will have to fulfil in their own home jurisdictions. The principle that direct communication
is sometimes desirable is now established; the question is whether communication is appropriate on the facts of any particular case and if so what safeguards
should exist to ensure that the position of the parties to any litigation are adequately protected.