Anyone using arbitration clauses should note the Court of Appeal decision made on Monday 8 December, to the effect that a winding up petition is not automatically stayed because the petition debt arises from a contract containing a mandatory arbitration clause.

This important  development could  assist creditors  enforcing strong  claims against  debtors incorporated in many offshore financial centres as well as in England.

The English Court of Appeal dismissed an appeal brought against a recent High Court decision to stay a winding-up petition in favour of arbitration proceedings, in Salford Estates (No. 2) Limited v Altomart Limited [2014] EWCA 575 Civ.

It is now settled law that when an Administrator retains occupation of leasehold property on the basis that it will benefit of the company’s creditors, rent that relates to that period of occupation must be paid by the Administrator as an expense of the administration.

Speed Read

The High Court ruling in Schroder Exempt Property Unit Trust and another v Birmingham City Council [2014] EWHC 2207 provides helpful clarification on whether or not a landlord is liable  to pay business rates on an empty property following the liquidation of a tenant and the subsequent  disclaimer of the lease.

Background

Paragraph 71 of Schedule B1 to the Insolvency Act allows an administrator to apply to court to sell assets subject to a fixed charge as if they were not subject to the security. The case of O’Connell v Rollings and others [2014] EWCA Civ 639 is a rare illustration of such an application and provides useful guidance on the factors the court will take into account.

The background

We have become used to a regular stream of decisions in which the courts are prepared to grant administration or winding up orders in respect of overseas companies which have COMI or an establishment in the UK. The decision inRe Buccament Bay Limited and another [2014] EWCH 3130 is a rare exception in which the court has refused to exercise its discretion.

The background

Singularis Holdings Limited v PricewaterhouseCoopers [2014] UKPC 36

PricewaterhouseCoopers v Saad Investments Company Limited [2014] UKPC 35

The Privy Council gives credence to the concept of “modified universalism” (being the court’s common law power to assist foreign winding up proceedings) and notes some of the circumstances which would permit a “stranger” to a winding up order the opportunity to challenge that order.

The facts:

Key Points

• Paragraph 13 of Schedule 4 to the Insolvency Act 1986 ("Paragraph 13") permits a liquidator to do all acts "necessary" for the winding up and distribution of property.
• The decision as to what action is "necessary" is one for the liquidators (albeit subject to sanction).
• Nothing in FSMA 2000 prevented the investors from assigning their claims against the former operators..

The facts

McKellar v Griffin emphasises the importance for IPs of establishing the COMI of a foreign company before accepting an appointment as administrators. 

In McKellar (decided in June 2014) the court, on the application of a foreign liquidator, declared that the administrators’ appointment was invalid because the company’s COMI was not in England and Wales. So where does that leave unfortunate insolvency practitioners in similar situations?