Manhattan Coffee Investment Holding (in liquidation) v Stephen Mbugua Mwagiru (Mauritius)

A company in liquidation cannot use the derivative-action procedure in the Companies Act 2001, which is structured around directors and shareholders, to displace liquidator control. Under the Insolvency Act 2009, the court may authorise proceedings in the company’s name, but standing depends on a legitimate interest in the liquidation. Ordinarily this means creditors, contributories or persons with an equivalent insolvency-based interest. A director, merely as director, has no such interest and retains no residual power after liquidation, absent exceptional statutory circumstances. Applications affecting a company in liquidation should ordinarily be made on notice. Ex parte orders are justified only exceptionally, including where notice would frustrate relief or urgency makes notice impossible.

The Company was in liquidation following a winding-up order by the Supreme Court of Mauritius. Its director applied without notice for leave under the Insolvency Act 2009 and for authority under the Companies Act 2001 to continue proceedings in the Company’s name concerning the dilution of its shareholdings. Two judges made the requested orders without reasons or a hearing.

The Court of Civil Appeal set both orders aside. The appeals concerned whether the derivative-action procedure applied in liquidation, whether the court’s supervisory jurisdiction could authorise a non-liquidator to conduct company proceedings, whether a director had standing to seek that relief, and whether the orders could properly have been made ex parte.

The Board dismissed both appeals.

1. Leave Order. Section 170 of the Companies Act 2001 was inapplicable because the Company was in liquidation. Its structure referred to the roles of directors and shareholders and made no provision for the liquidator or creditors. The authorities, including Ferguson v Wallbridge [1935] 3 DLR 66, supported that conclusion. An application under section 174 of the Insolvency Act 2009, or proceedings authorised in the Company’s name, would not be proceedings against the Company or in relation to its property for the purposes of section 154(1)(c). The Leave Order was therefore misconceived.
2. Jurisdiction and standing. The court has supervisory and inherent jurisdiction under section 174 of the Insolvency Act 2009 to authorise a person other than the liquidator to bring or continue proceedings in the name of a company in liquidation. The jurisdiction exists to protect those interested in the collection, realisation and distribution of the company’s assets. Standing requires a legitimate interest in the relief sought. Creditors and contributories ordinarily satisfy that requirement. Applying Brake v The Chedington Court Estate Ltd [2023] UKSC 29 and Stevanovich v Richardson [2025] UKPC 18, a director has no such interest merely by virtue of office, absent exceptional circumstances.
3. Directors’ powers. Section 154(1)(b) leaves directors in office but removes their powers, functions and duties except those required or permitted by Part III of the Insolvency Act 2009. No residual power survived enabling the appellant to continue the claim because the liquidators had declined to do so. Section 174(3) identified persons who could apply for directions, but did not confer standing for every form of relief.
4. Procedural fairness. The orders should not have been made without notice to the joint liquidators. Ex parte orders are exceptional. Even in an urgent case, reasonable efforts should be made to give notice and an opportunity to make representations and provide evidence.

1. Supreme Court of Mauritius: The Company was wound up and joint liquidators were appointed. Applications by the appellant were subsequently granted without notice or a hearing.
2. Court of Civil Appeal: On 11 December 2024, separate appeals by the Company were allowed and both orders were set aside.
3. Privy Council: The appeals against those decisions were dismissed.