In the recent decision of Orexim Trading Limited v Mahavir Port and Terminal Private Limited, the Court of Appeal has ruled that the Court does have power to permit service of a claim under section 423 of the Insolvency Act 1986 outside England and Wales. However, in the circumstances of this case, the Court of Appeal declined to exercise its discretion to grant permission to serve the claim form outside the jurisdiction. HFW acted for the successful First Respondent, Mahavir Port and Terminal Private Limited (MPT).

Background

Briefings

Navigating the tension between private dispute resolution and insolvency class actions, March 2018

In Lasmos Limited v. Southwest Pacific Bauxite (HK) Limited1, the Hong Kong Court of First Instance dismissed a winding-up petition based on an unsatisfied statutory demand.

Briefings

A recent ruling by the English High Court in BILTA v RBS1, concerning EU Emissions Allowances (“EUAs” or “carbon-credits”) trading has re-opened the debate on when materials forming part of an internal investigation can benefit from litigation privilege. The decision further undermines the restrictive approach taken by Andrews J in SFO v ENRC2 when applying the “sole or dominant purpose test” to dual-purpose communications.

Background – Emissions Trading Fraud

The professional indemnity insurer of an insolvent independent financial adviser (Target) successfully relied on an insolvency exclusion in the policy to deny liability to third party (former) clients of Target1.

In 2005 Target had advised Mr. and Mrs. Crowden to invest £200,000 in a “Secure Income Bond” issued by SLS Capital SA in Luxembourg and Keydata Investment Ltd.2 SLS went into liquidation in 2009.

The High Court has considered a recent Court of Appeal ruling on whether trustees in bankruptcy should be able to deploy privileged documents in the discharge of their duties.

The existing position under Avonwick

The facts of Shlosberg v Avonwick Holdings Limited [2016] EWCA Civ 1138 involved a company called Webinvest. Webinvest was beneficially owned by Mr Shlosberg. Avonwick lent US$100 million to Webinvest, with Mr Shlosberg personally guaranteeing the loan.

This case clarifies that the Third Parties (Rights Against Insurers) Act 2010 (the 2010 Act) does not apply retrospectively, such that the Third Parties (Rights Against Insurers) Act 1930 (the 1930 Act), and only the 1930 Act, will continue to apply in circumstances in which both (i) the insured's insolvency occurred; and (ii) the insured's liability was incurred, prior to 1 August 2016.

In May 2017, the Irish Government signed a commencement order giving immediate effect to the ‘Alternative A’ insolvency remedy of the Aircraft Protocol to the Cape Town Convention on International Interests in Mobile Equipment (the Convention). The long-awaited implementation of ‘Alternative A’ gives force of law in Ireland to a regime which is similar to the insolvency regime in the USA, known as Chapter 11 “reorganisation” bankruptcy. The insolvency remedies in the Convention were designed to strengthen creditor’s positions.

Further evidence that Ireland is emerging from economic recession can be seen in the publication of the Courts Service Annual Report 2016 (the Report). An examination of the Report’s figures relating to debt collection activity shows a continuing decline in creditor litigation and enforcement. The number of default judgments marked in 2016 across the District, Circuit and High Courts shows a fall to 10,475 from 14,204 during the previous year. This represents almost an 80% drop on the equivalent number of such judgments marked in 2010.

The Court of Appeal has helpfully confirmed that a judgment creditor can seek an order appointing a receiver by way of equitable execution where:

• the debtor holds a legal or equitable interest in property; and
• execution against the property is not available at law by one of the usual methods, for instance via the sheriff or by a garnishee order.

There was previously doubt as to whether such a receiver could be appointed where the debtor held a legal, as opposed to an equitable interest, in property.

The Hong Kong Court of First Instance (CFI) has issued a judgment1 examining the instances in which the Hong Kong courts will exercise their jurisdiction to wind-up a foreign company.

In a welcome decision the CFI has made it clear that, given certain conditions, creditors will be able to enlist the winding-up jurisdiction of the Hong Kong courts in order to exert pressure on foreign companies which refuse to pay their debts.