Company insolvency – service out of the jurisdiction – proper forum – s.233 and s.236 Insolvency Act 1986 – extraterritorial effect
The Official Receiver was the liquidator of Sahaviriya Steel Industries UK Limited. He applied for orders under sections 233 and 236 of the Insolvency Act 1986 against the respondent, Sahaviriya Steel’s parent company in Thailand. Rule 12A.20 of the Insolvency Rules 1986 applied CPR Part 6 to the service of documents in connection with insolvency proceedings and, therefore, the Official Receiver required permission to serve the application outside of the jurisdiction in Thailand.
Granting the Official Receiver’s application for permission, the Judge held that an application under sections 233 and 236 were proceedings brought under an enactment within the meaning of paragraph 3.1(20) of PD6B. The judge rejected the suggestion that the applications fell within paragraph 3.1(2) and declined to comment on whether any of the other gateways for service out were engaged.
Although the question whether section 233 had extraterritorial effect had yet to be determined, in the light of Jetivia v Bilta [2015] UKSC 23 and Re Paramount Airways Ltd [1993] Ch 223, it was arguable and, therefore, there was a serious issue to be tried.
The Judge found it difficult to decide whether England was the most appropriate forum. There was no evidence any order could be enforced against the Thai parent company, or that the Thai courts will exercise any jurisdiction it might have to enforce an order in relation to English insolvency proceedings.
However, the Judge decided that permission should be given because: (1) it was not clear that the Official Receiver could make an application for an order equivalent to one under section 233 under Thai insolvency law, (2) the seat of the insolvency process was England; and (3) what might otherwise be an exorbitant jurisdiction could be constrained by placing limits on the enforcement of any final order.
This decision provides useful guidance on the interaction between the rules for obtaining permission to serve outside the jurisdiction and applications in insolvency proceedings. It is clear that difficult questions will continue to arise as to when the ‘appropriate forum’ test is satisfied.
