Insolvency Act 1986, section 426

Co-operation between courts exercising jurisdiction in relation to insolvency

Part XVII Miscellaneous and General

(1)An order made by a court in any part of the United Kingdom in the exercise of jurisdiction in relation to insolvency law shall be enforced in any other part of the United Kingdom as if it were made by a court exercising the corresponding jurisdiction in that other part.

(2)However, without prejudice to the following provisions of this section, nothing in subsection (1) requires a court in any part of the United Kingdom to enforce, in relation to property situated in that part, any order made by a court in any other part of the United Kingdom.

(3)The Secretary of State, with the concurrence in relation to property situated in England and Wales of the Lord Chancellor, may by order make provision for securing that a trustee or assignee under the insolvency law of any part of the United Kingdom has, with such modifications as may be specified in the order, the same rights in relation to any property situated in another part of the United Kingdom as he would have in the corresponding circumstances if he were a trustee or assignee under the insolvency law of that other part.

(4)The courts having jurisdiction in relation to insolvency law in any part of the United Kingdom shall assist the courts having the corresponding jurisdiction in any other part of the United Kingdom or any relevant country or territory.

(5)For the purposes of subsection (4) a request made to a court in any part of the United Kingdom by a court in any other part of the United Kingdom or in a relevant country or territory is authority for the court to which the request is made to apply, in relation to any matters specified in the request, the insolvency law which is applicable by either court in relation to comparable matters falling within its jurisdiction.

In exercising its descretion under this subsection, a court shall have regard in particular to the rules of private international law.

(6)Where a person who is a trustee or assignee under the insolvency law of any part of the United Kingdom claims property situated in any other part of the United Kingdom (whether by virtue of an order under subsection (3) or otherwise), the submission of that claim to the court exercising jurisdiction in relation to insolvency law in that other part shall be treated in the same manner as a request made by a court for the purpose of subsection (4).

(7)M39Section 38 of the Criminal Law Act 1977 (execution of warrant of arrest throughout the United Kingdom) applies to a warrant which, in exercise of any jurisdiction in relation to insolvency law, is issued in any part of the United Kingdom for the arrest of a person as it applies to a warrant issued in that part of the United Kingdom for the arrest of a person charged with an offence.

(8)Without prejudice to any power to make rules of court, any power to make provision by subordinate legislation for the purpose of giving effect in relation to companies or individuals to the insolvency law of any part of the United Kingdom includes power to make provision for the purpose of giving effect in that part to any provision made by or under the preceding provisions of this section.

(9)An order under subsection (3) shall be made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(10) In this section “insolvency law” means—

(a)M40in relation to England and Wales, provision [F1202extending to England and Wales andF1202] made by or under this Act or sections [F12021AF1202] 6 to 10, [F120312 to 15F1203] , 19(c) and 20 (with Schedule 1) of the Company Directors Disqualification Act 1986[F1203 and sections 1 to 17 of that Act as they apply for the purposes of those provisions of that ActF1203] ;

(b)in relation to Scotland, provision extending to Scotland and made by or under this Act, sections [F12041AF1204] 6 to 10, [F120512 to 15F1205] , 19(c) and 20 (with Schedule 1) of the Company Directors Disqualification Act 1986[F1204 and sections 1 to 17 of that Act as they apply for the purposes of those provisions of that ActF1204] , Part XVIII of the Companies Act or the Bankruptcy (Scotland) Act [F12062016F1206] ;

(c)in relation to Northern Ireland, provision made by or under [F1207the Insolvency (Northern Ireland) Order 1989F1207][F1208 or the Company Directors Disqualification (Northern Ireland) Order 2002F1208] ;

(d)in relation to any relevant country or territory, so much of the law of that country or territory as corresponds to provisions falling within any of the foregoing paragraphs;

and references in this subsection to any enactment include, in relation to any time before the coming into force of that enactment the corresponding enactment in force at that time.

(11) In this section “relevant country or territory” means—

(a)any of the Channel Islands or the Isle of Man, or

(b)any country or territory designated for the purposes of this section by the Secretary of State by order made by statutory instrument.

[F1209 (12)In the application of this section to Northern Ireland—

(a)for any reference to the Secretary of State there is substituted a reference to the Department of Economic Development in Northern Ireland;

(b) in subsection (3) for the words “another part of the United Kingdom” and the words “that other part” there is substituted the words “Northern Ireland”;

(c)for subsection (9) there is substituted the following subsection—

“(9)An order made under subsection (3) by the Department of Economic Development in Northern Ireland shall be a statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 and shall be subject to negative resolution within the meaning of section 41(6) of the Interpretation Act (Northern Ireland) 1954.”.F1209]

[F1210 (13) Section 129 of the Banking Act 2009 provides for provisions of that Act about bank insolvency to be “insolvency law” for the purposes of this section. F1210]

[F1211 (14) Section 165 of the Banking Act 2009 provides for provisions of that Act about bank administration to be “insolvency law” for the purposes of this section. F1211]

Definitions used in section 426 1

the company

2 Section 233B does not apply in relation to a contract for the supply of goods or services to a company (“the company”) where any of paragraphs 3 to 11 applies.

Defined in Sch.4ZZA para.2 · see it in the full Act

Cases considering section 426 38

Kireeva v Bedzhamov

[2024] UKSC 39 · 20 November 2024Limits

The provision creates a statutory regime under which an English court may assist insolvency courts in specified countries, including in relation to English land. It did not apply because Russia was not designated as a relevant country. (see paras [48]-[54]) The subsection defines insolvency law to include relevant provisions of the Insolvency Act and corresponding law of a relevant country or territory. (see para [52]) The subsection limits relevant countries and territories to the Channel Islands, the Isle of Man and countries or territories designated by the Secretary of State. Russia was not designated. (see paras [50]; [54]) The subsection requires United Kingdom insolvency courts to assist corresponding courts in another part of the United Kingdom or a relevant country or territory. It supplied no power for this Russian bankruptcy. (see paras [49]-[50]; [54]) A qualifying request authorises application of either court’s insolvency law to comparable matters, with particular regard to private international law. This permits assistance concerning English land where the statutory gateway applies. (see paras [51]-[53])

Rubin and another v Eurofinance SA and others

[2012] UKSC 46 · 24 October 2012Limits

The section provides mechanisms for co-operation and assistance in insolvency matters involving designated countries. Its assistance provisions do not themselves create a procedure for enforcing a foreign judgment. (see paras [145]-[155]) This subsection expressly provides for enforcement between parts of the United Kingdom. Its language demonstrated that the differently worded assistance power in section 426(4) was not itself an enforcement mechanism. (see paras [152]-[153]) The subsection forms part of the express intra-United Kingdom enforcement scheme. Its presence supported the conclusion that section 426(4) concerns assistance rather than enforcement. (see paras [152]-[153]) The subsection requires courts with insolvency jurisdiction to assist corresponding courts in other parts of the United Kingdom and designated countries. It authorises assistance, not enforcement of the requesting court’s judgment. (see paras [146]-[155]) A request authorises the receiving court to apply either court’s insolvency law to comparable matters, subject to discretion and private international law. It enables the English court to make its own order but does not enforce the foreign order. (see paras [146]-[155])

McGrath and another (Appellants) and others v Riddell and others (Respondents) McGrath and another and others (Appellants) v Riddell and others (Respondents) (Conjoined Appeals)

[2008] UKHL 21 · 9 April 2008Interprets

The House interpreted the provision as enabling effective cooperation with the insolvency court of a designated country. It permitted the English assets to be dealt with under Australian distribution rules despite differences from English priorities. (see paras [26]-[30]; [37]; [57]-[64]; [81]-[89]) The subsection enables countries to be designated as relevant countries. Australia’s designation brought the request within the statutory cooperation regime. (see para [3]) The duty to assist a corresponding insolvency court in a designated country authorised the English court to accede to the Australian request. Assistance was not confined to distributions reproducing English priorities. (see paras [3]; [37]; [57]-[64]) A foreign request authorises the English court to use the insolvency law applicable in either jurisdiction for comparable matters. The discretion must account particularly for private international law and permitted Australian distribution in this case. (see paras [3]; [37]; [57]-[64]; [81]-[89])

18 more judgments, and what each says about section 426, are in the case-law panel in the full Act.

Amendments and notes

21 notes from legislation.gov.uk

Amendments

  1. F1202Words in s. 426(10)(a) inserted (2.4.2001) by 2000 c. 39, s. 8, Sch. 4 Pt. II para. 16(3)(i)(ii); S.I. 2001/766, art. 2 (subject to transitional provisions in art. 3)
  2. F1203Words in s. 426(10)(a) substituted (2.4.2001) by 2000 c. 39, s.8, Sch. 4 Pt. II para. 16(3)(a)(iii)(iv); S.I. 2001/766, art. 2 (subject to transitional provisions in art. 3)
  3. F1204Words in s. 426(10)(b) inserted (2.4.2001) by 2000 c. 39, s. 8, Sch. 4 Pt. II para 16(3)(b)(i)(iii); S.I. 2001/766, art. 2 (subject to transitional provisions in art. 3)
  4. F1205Words in s. 426(10)(b) substituted (2.4.2001) by 2000 c. 39, s. 8, Sch. 4 Pt. II para. 16(3)(b)(ii); S.I. 2001/766, art. 2 (subject to transitional provisions in art. 3)
  5. F1206Word in s. 426(10)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 4(9)
  6. F1207Words substituted (1.10.1991) by S.I. 1989/2405 (N.I. 19), art. 381, Sch. 9 Pt. II para. 41(a); S.R. 1991/411, art. 2
  7. F1208Words in s. 426(10)(c) substituted (N.I.) (5.9.2003) by S.I. 2002/3150 (N.I. 4), art. 26(1)(2), Sch. 3 para. 2 (with transitional provisions and savings in Sch. 2); S.R. 2003/345, art. 3(2) (subject to transitional provisions in S.R. 2003/346, arts. 3-6)
  8. F1209S. 426(12) inserted (1.10.1991) by S.I. 1989/2405 (N.I. 19), art. 381, Sch. 9 Pt. II para. 41(b); S.R. 1991/411, art. 2
  9. F1210S. 426(13) added (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 129(2), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2
  10. F1211S. 426(14) added (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 165, 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

Modifications

  1. C1248S. 426 applied (with modifications) by S.I. 1986/1999, art. 3, Sch. 1 Pt. II
  2. C1249S. 426 amended (N.I.) (1.10.1991) by S.I. 1990/1504 (N.I. 10), art. 104(1); S.R. 1991/438, art. 2
  3. C1250S. 426 extended (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 183(1); S.I. 1991/878, art. 2, Sch.
  4. C1251S. 426 restricted (25.4.1991) by Companies Act 1989 (c. 40), ss. 154, 155, 183(2)(3); S.I. 1991/878, art. 2, Sch.
  5. C1252S. 426 restricted (E.W.S.) (11.12.1999) by S.I. 1999/2979, reg. 25(1)
  6. C1253S. 426 modified (17.2.2009 for certain purposes, otherwise 21.2.2009) by Banking Act 2009 (c. 1), ss. 129(1), 263(1)(2) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 2
  7. C1254S. 426 applied (with modifications) (8.7.2021) by The Payment and Electronic Money Institution Insolvency Regulations 2021 (S.I. 2021/716), regs. 2, 37 (with reg. 5) (as amended (4.1.2024) by S.I. 2023/1399, regs. 1(2), 4, 11)
  8. C1255S. 426 applied (with modifications) (4.1.2024) by S.I. 2021/716, reg. 37A (as inserted by The Payment and Electronic Money Institution Insolvency (Amendment) Regulations 2023 (S.I. 2023/1399), regs. 1(2), 12)
  9. C1256S. 426 applied (with modifications) (E.W.) (15.3.2024) by The Water Industry (Special Administration) Regulations 2024 (S.I. 2024/205), regs. 2(2), 5(1), 51 (with reg. 64)

Marginal citations

  1. M391977 c. 45.
  2. M401986 c. 46.