Key Points

  • The principle of modified universalism (being the principle underlying the common law power to assist foreign insolvency proceedings) continues to exist
  • There is a common law power to order production of information to assist foreign insolvency proceedings
  • Common law assistance does not enable office holders to do something they would not be able to do under the insolvency laws by which they are appointed

The Facts

Singularis Holdings Limited ("SHL") was placed into Cayman liquidation. The liquidators sought an order for disclosure against PwC in Bermuda. As Bermudian statute did not apply to foreign companies, the liquidators relied on the principles of common law assistance and modified universalism as the basis for granting such an order. Similarly wide powers would not have been available under Cayman statute. The Bermudian Court of Appeal overturned the first instance judgment granting such an order. The liquidators appealed.

The Decision

The Board of the Privy Council dismissed the liquidators' appeal. While holding that there was a common law power to assist a foreign insolvency proceeding by ordering the production of information, the Board also reiterated the limitations to which such power was subject. These included a requirement that such relief also be available before the courts in which the foreign insolvency proceedings had been opened.

Comment

While the notion of common law assistance survives this judgment (and the ability to order production of information has been expressly confirmed), its remit has been curtailed. There now needs to be a level of equivalence between the provisions of the foreign and domestic insolvency regimes in order for such assistance to be available.

Singularis Holdings Limited v PricewaterhouseCoopers