SNP Boat Service S.A. v. Hotel Le St. James, 483 B.R. 776

SNP Boat Service S.A. (French debtor) faced a Canadian judgment and a French sauvegarde proceeding after a contract dispute with Hotel Le St. James (Canadian creditor) over vessel Saint James and related credits.
France initiated a sauvegarde proceeding for SNP; an automatic stay and stay on creditor actions applied internationally, with St. James filing unsecured claims in France.
SNP obtained recognition of the French proceeding as a foreign main proceeding under Chapter 15; the court issued a stay and entrusted the M/Y Sixty Five to SNP’s foreign representative Ezavin, with restrictions on transfer.
St. James sought discovery in the U.S. bankruptcy court to evaluate whether its creditor interests were sufficiently protected in the French proceeding, and SNP fought discovery due to the French blocking statute.
The bankruptcy court ordered discovery despite the blocking statute, later clarified that the statute did not bar discovery, and considered sanctions against SNP for alleged misconduct.
The district court ultimately vacated the discovery order’s scope, reversed certain rulings, and remanded for further proceedings, holding that the court could not determine specific creditor protection in a foreign proceeding and that sanctions were improper.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether discovery was proper to assess due process in the French proceeding	SNP: discovery would improperly review a specific French proceeding.	St. James: discovery is needed to ensure US creditors are protected under Chapter 15.	Discovery to assess specific French proceedings was improper.
Whether the French blocking statute barred compelled depositions	SNP: blocking statute precludes out-of-country discovery.	St. James: statute does not govern federal discovery power; can depose abroad.	Blocking statute did not preclude depositions; court could order them.
Whether dismissal with prejudice as a sanctions order was appropriate	SNP: dismissal was warranted due to discovery disputes.	St. James: sanctions necessary for SNP's conduct.	Dismissal with prejudice was an abuse of discretion; sanctions were inappropriate.

In re Atlas Shipping A/S, 404 B.R. 726 (Bankr.S.D.N.Y. 2009) (explains Chapter 15 relief and local creditor protections)
Victrix S.S. Co., S.A. v. Salen Dry Cargo A.B., 825 F.2d 709 (2d Cir. 1987) (comity and cross-border insolvency; local creditor protection)
Societe Nationale Aerospatiale v. U.S. Dist. Court for the S. Dist. of Iowa, 482 U.S. 522 (Supreme Court 1987) (federal courts may enforce discovery despite foreign blocking statutes)
Canada Southern Ry. Co. v. Gebhard, 109 U.S. 527 (U.S. Supreme Court 1883) (comity and choice-of-law considerations in foreign proceedings)
Cunard Steamship Co. v. Salen Reefer Servs. A.B., 773 F.2d 452 (2d Cir. 1985) (analysis of foreign bankruptcy law for comity)
Victrix S.S. Co., S.A. v. Salen Dry Cargo A.B. (second mention), 825 F.2d 709 (2d Cir. 1987) (emphasizes balance between relief and local interests under comity)