The English Court refused an application by Liquidators to stay English proceedings pending the outcome of similar proceedings in the US.

The Joint Liquidators of a Luxembourg company ("the Company") applied to stay English proceedings that they had brought against private equity investors ("the Defendants") until similar proceedings in the US had been resolved, or for three months to enable the Liquidators to raise finance for the litigation.

Directors against whom claims for a misfeasance have been intimated often turn to limitation and set off in defence of a request for the repayment or restoration of the relevant sums or property.

Misfeasance and limitation

Section 236 Insolvency Act ("IA") 1986 enables the Court power to summon persons with information about the affairs of a company to appear before it and / or to produce documents. In our August bulletin we considered the decision of the English High Court in Re MF Global [2015] EWHC 2319 when it was held that s236 does not have extra-territorial effect. However, having looked at the issue again in Official Receiver v Norriss [2015] EWHC 2697, the High Court has departed from the position in Re MF Global.

The High Court considered whether it would be appropriate to approve a scheme of arrangement for a company incorporated in Luxembourg where the company's COMI had been moved to England and there had been a change in the governing law and jurisdiction clause in favour of the English courts.

The English High Court has for the first time directly addressed the question of the extra-territorial application of s233 of the Insolvency Act 1986. The Official Receiver as Liquidator of Sahaviriya Streel Industries UK Ltd sought an order to restore access to an IT system provided to the Company by its parent company in Thailand. In granting permission to the Official Receiver to serve the application out of the jurisdiction, the Court was persuaded by the reasoning in the recent cases of Jetivia and Re Paramount Airways which concerned other provisions of the Insolvency Act 1986.

The Facts

Norton Aluminium Ltd (NAL) went into Administration following a partially successful nuisance claim against it and subsequently went into Liquidation. Mr Dickinson was the managing director and controlling shareholder and brought a claim to recover a secured loan made by him to NAL. The Liquidators counterclaimed to set aside or recover compensation for various transactions, including a share buyback from Mr Dickinson and connected parties by NAL for £2.5 million and the sale of a subsidiary to Mr Dickinson for £1.

In Orexim Trading Ltd v Mahavir Port and Terminal Private Ltd and others [2017] EWHC 2663 (Comm), the High Court held that a claim under s.423 of the Insolvency Act 1986 ("IA 1986") where it was not brought by an insolvent company within the jursdiction did not fall within the jurisdictional gateways under paragraph 3.1 CPR PD 6B.

The Facts

This case considers section 245 of the Insolvency Act 1986, namely the rules on avoidance of certain floating charges, and provides analysis of the application of s245 notwithstanding the Liquidation originated in the British Virgin Islands.

Restructuring & Insolvency analysis: Following the decision in Wagner v White, Connor Pierce, solicitor at Ashfords LLP, looks at how the courts have been dealing with bankruptcy petitions which lenders have presented against guarantors when the principal borrower fails to repay the loan. Pierce also considers the ways in which guarantors have tried to have the lender’s statutory demand set aside. Wagner v White [2018] EWHC 2882 (Ch), [2018] All ER (D) 16 (Nov)