We recently blogged (here) about the Privy Council decision of Sian Participation Corporation (In Liquidation) v Halimeda InternationalLtd [2024] UKPC 16 (

This week:

Can a creditor obtain a winding up order against a debtor company if the underlying dispute over the debt is subject to an arbitration agreement between the parties?

The Courts, practitioners and leading textbooks have always assumed that the Limitation Act 1980 (the Limitation Act) does not apply to claims for relief from unfair prejudice under section 994 of the Companies Act 2006 (the Companies Act).

In THG Plc v Zedra Trust Company (Jersey) Limited [2024] EWCA Civ 158, the Court of Appeal examined the basis for that assumption and unanimously decided that:

This week:

Where a winding up petition is based on a debt arising from a contract with a non-Hong Kong exclusive jurisdiction clause, the court will tend to dismiss or stay the winding up petition in favour of the parties’ agreed forum unless there are strong countervailing factors.

In the current economic climate, more and more companies are getting into financial difficulties, informal workouts by debtor companies, with support from certain creditors, seem to be increasingly common.

This week:

• The court imposes a compensation order on a disqualified director, only the second order made since 2015

Court imposes compensation order on disqualified director

The court has ordered a disqualified director of an insolvent company to pay personal compensation to creditors.

The court orders a disqualified director of an insolvent company to pay personal compensation to creditors.

This is only the second time the courts have considered a personal compensation order against a disqualified director since their introduction in 2015.

What happened?

Secretary of State v Barnsby [2023] EWHC 2284 (Ch) concerned an individual who was the sole director and majority shareholder of a company that sold package holidays.

When a company is in the so-called “twilight zone” approaching insolvency, it is well-established that the directors’ fiduciary duties require them to take into account interest of creditors (the so-called “creditor duty”).