Judicial co-operation in cross-border insolvency - The english court takes a step backwards in BCCI (No. 10)
✍ Scribed by Sandy Shandro
- Publisher
- John Wiley and Sons
- Year
- 1998
- Tongue
- English
- Weight
- 1010 KB
- Volume
- 7
- Category
- Article
- ISSN
- 1180-0518
No coin nor oath required. For personal study only.
✦ Synopsis
Court Takes a Step Backwards in BCCl [No. 101 S u n 4 Shandro* I. Introduction In Re Bank of Credit and Commerce International SA (No. 10) [I9961 4 All ER 796 the English court held that it had no jurisdiction to disapply any part of the English statutory insolvency regime where the English winding-up was "ancillary" to the "principal" winding-up taking place concurrently in another jurisdiction. The Vice-Chancellor, Sir Richard Scott, put the matter starkly (at p. 821): " . . . the ancillary character of an English winding-up does not relieve an English court of the obligation to apply English law, inciuding English insolvency law, to the resolution of any issue arising in the winding-up which is brought before the court."
From that proposition it followed that, whatever else "ancillary" might mean, it cannot mean permitting money to be transferred over by an English liquidator to a foreign liquidator where to do so would deprive a creditor with a claim acceptable for dividend purposes in the English ancillary liquidation from receiving that dividend. The English court therefore clearly rejected the notion that acceptance of England as the ancillary jurisdiction could lead to a different -perhaps less favourableoutcome for creditors eligible to prove in England. Since, as a matter of English law, all creditors may prove in England, the decision effectively strips all meaning from the word "ancillary".
It shall be the thesis of this article that BCCI (No. 10) was wrongly decided and that if it is followed it will cause great damage to the cause of cross-border co-operation between the courts of western nations. Further, it shall be contended that the approach taken in recent US decisions constitutes a more