HSBC Bank Plc v Tambrook Jersey Ltd

Section 426 of the Insolvency Act 1986 permits broad cooperation between courts exercising corresponding insolvency jurisdiction. A requesting court need not have formal insolvency proceedings underway before an English court can provide assistance. The word “having” jurisdiction is not confined to a court currently conducting a formal insolvency process.

A Letter of Request may support an English administration where the foreign court has considered the interests of creditors and seeks an efficient insolvency administration. The principle of modified universalism supports cooperation and does not require unnecessary parallel proceedings.

HSBC Bank plc sought the appointment of administrators over Tambrook Jersey Limited pursuant to a Letter of Request from the Royal Court of Jersey under section 426 of the Insolvency Act 1986. The company was incorporated in Jersey, had its centre of main interests there, and owned substantially all its assets in England.

Mann J dismissed the application, holding that section 426 did not permit assistance where no Jersey insolvency proceedings were underway or contemplated. The appeal concerned whether the Royal Court was exercising corresponding insolvency jurisdiction by issuing the request and whether the English court had jurisdiction to make the administration order.

1. Disposition. The appeal was allowed. The court ordered the appointment of administrators over Tambrook Jersey Limited on the terms of the draft order.
2. Construction of section 426. Section 426(4) applies to courts “having” jurisdiction in relation to insolvency law. That wording should not be equated with a requirement that the requesting court be conducting formal insolvency proceedings. Section 426(4) and (5) must be given a broad and purposive interpretation.
3. Authorities. Re Dallhold Estates (UK) Pty Limited [1992] BCLC 621 showed that section 426(5) could confer a jurisdiction which the English court would not otherwise possess. That approach was approved in Hughes v Hannover Rückversicherungs Aktiengesellschaft [1997] 1 BCLC 497 and was consistent with the broad interpretation recognised in Rubin v Eurofinance SA [2012] UKSC 46, [2013] 1AC 236. Television Trade Rentals Ltd [2002] EWHC 211 (Ch) provided a further comparable example.
4. Modified universalism. The principle described in In re HIH Casualty and General Insurance Limited [2008] UKHL 21, [2008] 1 WLR 852 supported cooperation directed towards a single insolvency administration. It did not require a formal foreign process where that process would be purposeless or counterproductive. The same conclusion was consistent with Cambridge Gas Transportation v Official Committee of Unsecured Creditors [2006] UKPC 508, [2007] 1 AC 508.
5. Application. The Royal Court had considered the company’s insolvency, the interests of creditors and the appropriate administration of assets. Issuing the Letter of Request, including the request concerning priority for Jersey creditors, was an exercise of insolvency jurisdiction. The absence of désastre proceedings did not alter that conclusion. Mann J therefore had jurisdiction, and had correctly accepted that an administration order was appropriate if jurisdiction existed.

• Court of Appeal (Civil Division): In [2013] EWCA Civ 576, the appeal was allowed and administrators were appointed over the company.
• High Court of Justice, Chancery Division, Companies Court: Mann J dismissed HSBC’s application in a judgment handed down on 12 April 2013.