Maritime Investment Holdings Inc v Underwriting Members of Syndicate 1183 At Lloyd's & Ors

A foreign company’s existence is determined by the law of its place of incorporation, while English law as the lex fori governs procedural capacity in English proceedings. A company struck off a foreign register is not necessarily extinct: the foreign law must be examined to determine its continuing capacity.

A court asked to vary or set aside an earlier order under an express liberty to apply has a broad jurisdiction, but should not simply substitute its own assessment. Something out of the ordinary, such as a material change of circumstances or material mistake, is required. A party alleging that security for costs would stifle its claim must provide full and candid information about available means.

The claimant pursued an insurance claim concerning the alleged total loss of a motor yacht. The defendants had obtained an order requiring security for costs and payment of specified costs. The claimant failed to comply and applied to vary or set aside that order, and to postpone disclosure. The defendants applied for the claim to be struck out.

During the applications it emerged that the claimant, a BVI company, had been struck off the BVI register. The court therefore considered its continued existence and capacity, the proper approach to the earlier security order, and whether immediate dismissal was appropriate.

1. Standing and corporate existence. English law recognises foreign corporations, but the law of incorporation determines whether the entity has come into being or ceased to exist. English law as the lex fori determines whether its procedural requirements are met. Under the BVI regime, striking a company off the register did not immediately dissolve it. The company could continue legal proceedings instituted before striking-off and could be restored to the register. It was therefore not to be treated as dead, and dismissal of the proceedings on that ground was inappropriate.
2. Variation or setting aside of the security order. The liberty to apply granted by Carr J gave the court a broad jurisdiction. Nevertheless, the finality of court orders required something out of the ordinary before the order was varied or set aside, such as a material change of circumstances or a material mistake, particularly one caused by misleading evidence. The further evidence disclosed no material change and did not undermine the central finding that the claimant had failed to provide full and candid information about its financial position and access to funding. The security order was therefore not varied.
3. Stifling the claim. A party asserting that security would stifle its claim must give full and candid information about the means available to it. The claimant had not met that requirement. The court also refused to extend the time for payment of the costs ordered by Carr J.
4. Relief for non-compliance. Immediate dismissal was not required. In light of the uncertainty arising from the claimant’s striking-off and to allow a final opportunity to obtain funding, the claim was ordered to be dismissed unless the required security was paid into court by 4.00 pm on 2 October 2015. Until payment or that date, the proceedings were stayed, with liberty to the defendants to apply to lift the stay. The disclosure application was adjourned generally.

First-instance decision. No prior appellate decision is stated in the judgment.