Farfetch Limited (in liquidation), Re

Relief under article 21 of the UNCITRAL Model Law requires both a jurisdictional basis and a discretionary assessment. The court must be satisfied that the information sought concerns the debtor’s affairs and that the relief is necessary to protect the debtor’s assets or creditors’ interests.

The discretion must balance the office-holder’s reasonable requirements against oppression to the person examined. Oral examination is more intrusive than document production. Where respondents suspected of wrongdoing offer written answers, oral examination is premature unless written evidence and available documents have first been properly considered and shown to be inadequate.

Joint official liquidators of a Cayman-incorporated company recognised in England as a foreign main proceeding applied under article 21 of the Model Law for oral examination of three former senior managers and production of documents. The applications concerned investigations into the company’s pre-liquidation management, the sale of its business and the release of substantial intercompany debt.

Two respondents offered written answers but opposed oral examination and sought confidentiality protections. The third respondent disputed the court’s jurisdiction on residence-related grounds. The court considered whether the requested relief was necessary, proportionate and adequately protective of the respondents’ interests.

1. Applicable principles. Article 21(1)(d) contains jurisdictional and discretionary components. The information or examination must concern the debtor’s assets, affairs, rights, obligations or liabilities. If that threshold is met, the court must exercise its discretion having regard to all relevant circumstances and the protection required by article 22(1). The principles governing Insolvency Act 1986, s 236, are relevant through article 21(1)(g).
2. Balancing exercise. The s 236 discretion is broad but requires a balance between the office-holder’s reasonable requirements and oppression to the person from whom information is sought. The extraordinary nature of the power, the greater weight usually attaching to applications against former officers, the greater oppressiveness of oral examination compared with document production, and the risk of compelling a person suspected of wrongdoing to prove the case against himself were material considerations.
3. Ms Phair and Mr Jordan. Their positions and attendance at company meetings meant that their status as employees of a group company did not itself answer the applications. However, written responses were presently adequate and oral examination was premature. The liquidators had not yet digested existing documents, obtained all anticipated material or seen the respondents’ written evidence. The applications for oral examination were refused, without preventing a renewed application if circumstances changed.
4. Documents and confidentiality. No document order was made against Mr Jordan because his sworn evidence that he held no relevant documents was accepted. The information accessible through Ms Phair’s mobile phone was ordered to be imaged and preserved by her solicitors, pending any further search order. The order also required members of the Liquidation Committee to acknowledge the applicable confidentiality obligations.
5. Mr Neves. The jurisdiction and residence issue could not fairly be resolved on the late evidence. That part of the application was adjourned. Costs were reserved for a further hearing.