2014 Privy Council Cases of Note: The Singularis Holdings case and the Saad Investments case
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Andrew Martin’s practice bridges the international corporate and dispute resolution fields and focuses on commercial litigation and arbitration, insolvency and corporate reconstruction.
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In the world of cross border insolvencies, two important judgments in the Privy Council have clarified three issues which have great significance, not just for Bermuda, but all offshore jurisdictions which have insolvency provisions based on the English model, whether 1948 Companies Act or Insolvency Act 1986. The facts have been well reported and do not bear repeating here.
The key points of importance for insolvency practitioners are:
- The common law (in all commonwealth jurisdictions) allows assistance in cross-border insolvencies (affirming the continued existence of a concept of “modified universalism”), which extends to whatever assistance can be provided as a matter of common law in the country that receives the request, the limits of which remain undefined.
- However, assistance at common law does not extend to using statutory provisions that would be available in the court which receives a request for assistance as if it were a domestic insolvency. By a majority it was held that there is (at least) a common law power to order information and documents to be provided to the foreign office holder, and where the court seeking assistance also had the relevant power, assistance could be provided by way of allowing these investigatory powers to be used.
The common law power is not unlimited but extends to extracting information in written form or an oral private examination which is necessary for the administration of the foreign winding up and/or to identify and locate assets of the company in the jurisdiction receiving the request for assistance (in this case Bermuda). Foreign office-holders can therefore seek common law assistance to obtain information from any party provided that the foreign office-holder has an equivalent power in his or her own home jurisdiction.
- A ‘stranger’ to the winding up Order should be able to apply to stay the winding-up Order in circumstances where it is arguable that there was no jurisdiction for such an order to be made, and where the party seeking the stay is the sole direct target of the winding up Order
- These points will be of considerable practical value and effect in Bermuda and throughout the offshore world, and demonstrate the Privy Council’s support for international co-operation and “modified universalism”.
PricewaterhouseCoopers v. Saad Investments Company Limited [2014] UKPC 35
Singularis Holdings Limited v. PricewaterhouseCoopers [2014] UKPC 36