In the matter of an Unregistered Company

Permission to serve a winding-up petition out of the jurisdiction requires a good arguable case that the court has jurisdiction, a serious issue to be tried, and England and Wales to be the proper forum. An unregistered company may include an overseas company, but the statutory reference to an association is limited by Parliament’s probable intention. A compartment or sub-fund which lacks separate legal personality is not, merely because its assets are ring-fenced and it may be liquidated under foreign law, an entity capable of being wound up in its own name. A shareholder is not a creditor merely because it invested. Material non-disclosure on an ex parte application, including a misleading description of the proposed target as a separate company, justifies setting aside permission.

The Respondent invested £20 million in a dedicated sub-fund of the Applicant, a Luxembourg public limited investment company. The sub-fund held ring-fenced assets but had no separate legal personality under Luxembourg law. After the sub-fund was placed into liquidation and investors received no return, the Respondent presented a petition to wind it up in England as an unregistered company and obtained permission to serve the petition out of the jurisdiction.

The Applicant applied to set aside that permission, alleging material non-disclosure and lack of a realistic prospect of success. The issues were whether the sub-fund could be wound up under sections 220 and 221 of the Insolvency Act 1986, whether the Respondent had standing as a creditor, and whether the requirements for service out were met.

1. Permission set aside. The petition had no realistic prospect of success, and the Respondent had failed to give full and frank disclosure on the ex parte application.
2. On an application for permission to serve out, the court must be satisfied that there is a serious issue to be tried, a good arguable case that it has jurisdiction, and that England and Wales is the proper forum. The court is concerned with matters which might reasonably affect that jurisdictional decision, rather than the full merits of the underlying dispute.
3. Section 220 of the Insolvency Act 1986 is not unlimited. The expression association must be interpreted in the light of Parliament’s probable intention. The sub-fund was merely a compartment or pool of assets within the Applicant. It had no separate legal personality, could not contract or be sued in its own name, and did not own assets independently of the Applicant. It was therefore not an entity capable of recognition in its own right as an unregistered company or association for these purposes.
4. The usual considerations for winding up an overseas company did not assist. Even assuming a sufficient connection, a reasonable possibility of benefit, and a person within the jurisdiction, those matters could not justify winding up only part of a foreign company as if that part were a separate legal entity.
5. The Respondent was a shareholder in the Applicant, not shown to be a creditor of the sub-fund. No redemption request or other circumstance giving rise to creditor status had been established. The statutory ground concerning inability to pay debts therefore could not support the petition.
6. The Respondent’s evidence described the sub-fund as the Company, referred ambiguously to the Fund, suggested that it had directors and a registered office, and failed to explain how investors became creditors. Those omissions were material and had misled the court into granting permission. The order granting permission was set aside.