Home Information Cases Isis Investments Ltd v Oscatello Investments Ltd & Ors (2013)

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Isis Investments Ltd v Oscatello Investments Ltd & Ors (2013)


The court refused to grant a stay of proceedings on the basis that there were related proceedings in the Isle of Man because the circumstances were not sufficiently rare and compelling. Further, although the proceedings involved an Icelandic credit institution which was subject to an Icelandic insolvency process, there was no "pending lawsuit" for the purposes of Directive 2001/24 art.32.


The claimant (S) sought a stay of proceedings which it had brought against the defendants. The third defendant (E) sought permission to bring various counterclaims against the second defendant (K).

S was a Manx investment holding company which was in liquidation. It was an indirect subsidiary of K, an Icelandic bank which was subject to an insolvency process in Iceland. S had originally commenced the instant proceedings to seek declarations about interpretation of a clause in an agreement that it had entered into with the first defendant (O) and K, obliging it to hold certain monies on trust for O, a subsidiary of the fourth defendant (Z). The agreement conferred exclusive jurisdiction on the English courts. In 2011, S had started Manx proceedings against its de jure directors. O, Z and E were not parties to those proceedings. O and K had lodged proofs of debt in S's liquidation in the Isle of Man and had appealed against the rejection of those proofs. E represented various people who had entered into sub-participation agreements with S. He wanted to bring various counterclaims against K, including a claim under the Insolvency Act 1986 s.423 and allegations of conspiracy and breach of contract.

S submitted that the English action should be stayed because the Manx courts had a legitimate interest in the issues involved and the insolvency process was based in the Isle of Man; parts of the Isle of Man action would be statute-barred; and it was not possible to avoid duplication of proceedings by amending the English action to include the Manx claims because K was a credit institution for the purposes of the Directive 2001/24 and the effect of art.32 of that Directive, the Credit Institutions (Reorganisation and Winding up) Regulations 2004 reg.3 and reg.5, and Icelandic law was to prohibit bringing new claims, there being no "pending lawsuit" and no "asset" or "right" for the purposes of art.32 of the Directive. E argued that he should be allowed to bring the counterclaim because a lawsuit had already been initiated.


(1) The circumstances were not sufficiently rare and compelling to warrant a stay, Reichhold Norway ASA v Goldman Sachs International [2000] 1 W.L.R. 173 applied. First, issues concerning construction of the agreement were logically prior to the claims in the Manx proceedings or the appeals against the rejections of the proofs of debt. Second, the appeals against rejection of the proofs were contingent upon matters in the English action. It would be more appropriate for those matters to be decided first. Given the circumstances in which the proofs had been lodged and the fact that they were couched as being contingent to any entitlement to the fund, they could not be characterised as an election to have the underlying claim determined in the Isle of Man, Rubin v Eurofinance SA [2012] UKSC 46, [2012] 3 W.L.R. 1019 distinguished. Third, the action was at a more advanced stage than the Manx proceedings and the appeals in the insolvency proceedings there. Fourth, S had chosen to bring both actions and had therefore brought the circumstances upon itself. Fifth, the agreement contained an exclusive jurisdiction clause in favour of the English courts. Sixth, neither O nor Z were parties to the Manx proceedings. A stay would prejudice them by causing delay in dealing with their claims to entitlement to the fund and by the potential for findings of fact in the Isle of Man in relation to which they had no input. A stay would not necessarily prevent the risk of inconsistent decisions. Seventh, the risk of inconsistent findings could be minimised by determining the issues in the English action and, if necessary, seeking remedies against the directors thereafter. Eighth, there was nothing to suggest a material difference between English and Manx law sufficient to warrant a stay. In relation to the limitation issue, S had brought the situation upon itself and the amounts involved were relatively small. In relation to the Regulations, there was no dispute about expert evidence that Icelandic law only prevented claims which could not be brought as part of existing proceedings. It was a matter for English procedural law to determine whether amendments could be made to the English action. Given the scope of the English action, there could be little doubt that such amendments, if permitted, would be within the action and would not be regarded as new proceedings. There clearly was a pending action concerning assets or rights which could be amended. The categories set out in Syska v Vivendi Universal SA [2009] EWCA Civ 677, [2009] Bus. L.R. 1494 were not exclusive, Syska considered. It was likely that England was an available forum for decision of the majority of the relevant issues. In any event, S would not be prevented from seeking relief in the Isle of Man once the issues had been resolved in England (see paras 78-96 of judgment). (2) The relevant Icelandic law and art.32 were concerned with a lawsuit and not claims within it. As a matter of English procedure, the new additional claims were capable of being introduced into the existing action. Permission would be granted to bring the counterclaim (paras 97-114).

Judgment accordingly

Chancery Division
Asplin J
Judgment date
30 January 2013