The much-anticipated UK Supreme Court decision in El-Husseiny and another v Invest Bank PSC [2025] UKSC 4 was released recently, providing much-needed clarity to creditors and officeholders about the application of section 423 Insolvency Act 1986 to transactions involving debtors and company structures. Creditors and officeholders alike will be pleased with this decision, as the Court determined that the language and purpose of section 423 are such that a ‘transaction’ is not confined to dealing with an asset owned by the debtor.

If the overarching theme of 2024 was continued uncertainty (Ten litigation trends to watch for 2024), 2025 already looks set to be another unpredictable year. Various doom-laden economic forecasts indicate that 2025 will be a challenging year for the UK economy.

In this article Leon Breakey explains some of the issues that can arise when an English bankruptcy order is issued and the debtor owns property in Scotland.

When an English debtor with an interest in heritable property in Scotland is made bankrupt under English law, a crucial question arises: how can the English bankruptcy order be enforced in Scotland? This article explores this issue, highlighting the potential risks for trustees and the solution provided by Section 426 of the Insolvency Act 1986.

The Issue: English Bankruptcy Orders and Scottish Property

ICC Judge Burton’s judgment in Dale & Ors v BDO LLP (Re NMCN PLC and NMCN Sustainable Solutions Ltd) [2025] EWHC 446 (Ch) follows an administrators’ application under ss 235 and 236 Insolvency Act 1986 for the former company auditors, BDO LLP, to deliver up audit files for 2018 and 2019 to enable the administrators to investigate whether BDO had breached duties owed to the companies. The application was resisted. The points of contention were:

(1) whether, as the companies’ auditors, BDO were an “officer” for the purposes of s 235;

Given the increased intertwining of national economies, cross-border insolvency presents salient legal and financial difficulty. Upon the existence of an insolvent debtor in more than one country, the necessity to deal with assets and/or creditors creates very complicated jurisdictional problems and other legal issues. Most of the time, a company will operate in several jurisdictions and hence face very complicated transnational insolvency scenarios.

The Insolvency and Bankruptcy Board of India (‘IBBI’) has recently come up with a proposal for the parties involved in an operational creditor application to explore mediation under the provisions of the Mediation Act, 2023. This is aimed as a precursor to the filing of an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (‘Code’).

1. Introduction

引言

继2024年1月29日香港高等法院向中国恒大集团公司发出清盘令后，2024年9月12日，中国恒大集团又向香港高等法院提呈针对其直接全资附属公司CEG Holdings (BVI) Limited的清盘呈请，并定于2025年2月17日举行清盘呈请聆讯。在香港公司清盘程序中，维护及变现公司资产，向公司债权人及其他持份者返还价值为重要关切。明确香港公司清盘令下公司在大陆境内财产的处置规则和程序，对于减少商业活动中的不确定性和风险，增强市场主体信心有重要意义。

一、香港高等法院作出清盘令的法律后果

根据《公司（清盘及杂项条文）条例》（简称《清盘条例》）第178条规定，若公司欠下债权人已到期应支付的款项相等于或超过1万美元债务的，任何一名或多名债权人、任何一名或多名分担人（指在公司清盘时有法律责任分担提供公司资产的人）或任何分担人的破产案受托人或遗产代理人可一起或分别提出清盘呈请，清盘令作出后有如下主要法律后果：

1. 诉讼搁置

根据《公司（清盘及杂项条文）条例》（简称《清盘条例》）第186条规定，当已有清盘令作出或已委托一名临时清盘人，除非获得法院许可，否则不得针对公司进行或展开任何诉讼或法律程序，而获法院许可者须在符合法院所施加的条款下进行或展开该等诉讼或法律程序，但涉及国家安全的案件除外。

Following the liquidation order from the Hong Kong High Court on January 29, 2024, against China Evergrande Group Corporation, on September 12, 2024, China Evergrande Group filed a liquidation petition for its wholly owned subsidiary, CEG Holdings (BVI) Limited, which has been scheduled a hearing on February 17, 2025. In the liquidation process of a Hong Kong company, the maintenance and realisation of the company's assets and the return of the value to its creditors and other stakeholders are key concerns.

The Pauline Action is a legal mechanism that allows creditors to apply to the Royal Court of Jersey to set aside transactions undertaken by a debtor to defraud or otherwise prejudice them.

Emirates NBD Bank PJSC v Almakhawi and Others [2024] JRC 256 is the most recent case from the Royal Court to affirm that the Pauline Action, which has its origins in Roman law, remains an effective debt recovery tool for creditors in Jersey.

Purpose of the Pauline Action