The Facts

Following a bankruptcy petition on 23 January 2007, Mr Eaitisham Ahmed had entered an IVA which was approved as a result of votes of family members who claimed to be creditors. The IVA was challenged and a bankruptcy order was made on 21 April 2009. David Ingram and Michaela Hall were appointed as Joint Trustees on 14 April 2010, following a trustee in bankruptcy initially appointed on or around the time of the bankruptcy order.

The Court of Appeal has today handed down judgment in the case of Orexim Trading Limited v Mahavir Port and Terminal Private Limited [2018] EWCA Civ 1660, raising important issues as to the service of claims under s.423 of the Insolvency Act 1986 out of the jurisdiction.

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

2018 has been one tough year on the High Street...

Retail, as a sector, has long been under pressure from increased competition from online retailers, which has resulted in reduced footfall on the High Street, affecting many companies, including many well-known names.

Claims remain frequent in the construction industry, and so do insolvencies. In the wake of main contractor Carillion’s entry into liquidation, and rumours of forthcoming interest rate rises, it is worth looking at what effect different types of insolvency have on the ability to prosecute claims.

The Facts

Mr Reynard, a bankrupt, made an claim against his Trustee, Mr Fox. Mr Reynard acted in person at all times and issued proceedings at the county court money claims centre for breach of contract and negligence, asserting that his Trustee had failed to assess potential claims properly and had incorrectly valued the claims, and therefore had failed to take action.

The Court held that it had jurisdiction to order a Latvian bank to disclose information regarding a bankrupt's dealings. The Joint Trustees of the Bankrupt's estate had demonstrated that their request was reasonable and was required to identify further assets that the Bankrupt might hold.

This decision is the latest that has been made in relation to the bankruptcy of Mr Shlosberg, a Russian businessman domiciled in London. Mr Shlosberg was made bankrupt in January 2015 on a judgment debt of US$195 million plus interest.

This is an interesting and frequently asked question. It is therefore perhaps surprising to learn that there is no direct case law authority on this point. Whilst the registration of a foreign judgment debt might serve to strengthen a creditor’s position should arguments about the validity of a judgment be made (as the court is likely to treat a registered judgment the same as a UK judgment), is it really necessary in these circumstances?

Obtaining Decree

After obtaining a Decree (or judgment in England) there are a number of steps that can be taken, if the debtor does not make payment, to recover the outstanding debt. In Scotland this process is known as “diligence”.

Charge for payment (“Charge”)

Administrators are statutorily entitled to require a receiver to vacate office (paragraph 41 Schedule B1 Insolvency Act 1986 (“Schedule B1”)). In Promontoria (Chestnut) Ltd vCraig and another [2017] EWHC 2405 (Ch) they did just that, taking steps to remove existing receivers not long after their appointment, claiming the action to be in the interests of all the creditors. On the facts, that decision was not only unreasonable but costs were also awarded personally against the administrators.

Brief facts and arguments