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Stichting Shell Pensioenfonds v Krys & Anor (2014)


When a company was being wound up in the jurisdiction where it was incorporated, and where a foreign creditor had submitted a proof of debt to the liquidators, that creditor had submitted to the jurisdiction of the court responsible for administering the insolvency process and could not pursue proceedings in its domestic jurisdiction with a view to obtaining a priority over other creditors.


The appellant (S), a Dutch pension fund, appealed against an order of the Court of Appeal of the British Virgin Islands restraining it from pursuing proceedings commenced in the Netherlands against the respondent liquidators of a British Virgin Islands investment fund (F).

F had participated in Bernard Madoff's ponzi scheme. Its dealings with investors had been via a Dutch intermediary company, which held its cash in a Dublin bank account. S had bought shares in F. In December 2008, immediately after Mr Madoff's arrest, S applied to redeem its shares. When no payment was received, it applied to the Amsterdam District Court for a conservatory attachment over all F's assets held by the Dutch intermediary company, including the Dublin cash. The attachments were granted ex parte, but rejected on an inter partes application. In 2009, F went into liquidation and S submitted a proof of debt to the liquidators. In March 2010 S began proceedings in the Netherlands so as to obtain a judgment which it intended to execute from the Dublin cash. The issue was whether, when a company was being wound up in the jurisdiction where it was incorporated, a creditor should be prevented from pursuing in another jurisdiction proceedings calculated to give him an unjustifiable priority over other creditors. Although BVI law was not wholly identical to English law owing to legislative differences, the two jurisdictions were deemed the same for the instant purposes. The BVI High Court held that a foreign creditor could have resort to its own courts. The Court of Appeal reversed the finding, issuing an injunction restraining the Dutch proceedings. It held that S was subject to the BVI jurisdiction by virtue of having lodged a proof in the liquidation; that the Dutch jurisdiction was exorbitant; and that BVI statutory rules of distribution prevented S from gaining a priority by availing itself of a different jurisdiction.


(1) Distribution of an insolvent company's assets among creditors was normally determined by the law of the jurisdiction where the insolvent company was incorporated unless there had been a transfer of a proprietary interest in an asset prior to the winding up order. While S had obtained the attachments before F was wound up, there had been no alteration to the proprietary interests in the Dublin cash. Furthermore, the attachments were inconsistent with the statutory scheme arising from the winding up order. The court had an equitable jurisdiction to restrain acts calculated to violate the statutory scheme of distribution, Carron Iron Co. Proprietors v Maclaren 10 E.R. 961 , Buckingham International Plc (In Liquidation) (No.1), Re [1997] B.C.C. 907 and Societe Nationale Industrielle Aerospatiale (SNIA) v Lee Kui Jak [1987] A.C. 871 considered. Invoking the jurisdiction of a foreign court to obtain prior access to an insolvent estate might also be vexatious or oppressive conduct, although such conduct was not a necessary part of the test for the exercise of the court's discretion to grant an anti-suit injunction (see paras 15-16, 18-24 of judgment). (2) S had submitted to the BVI jurisdiction. Formal submission of a proof of debt was generally adequate proof; it gave a creditor the immediate benefit of the right to have its claim considered on its merits and satisfied according to the rules of pari passu distribution. It did not, in itself, preclude the creditor from taking proceedings outside the liquidation, but it precluded any attempt to gain access to the insolvent's assets in priority to other creditors, Rubin v Eurofinance SA [2012] UKSC 46, [2013] 1 A.C. 236 and Akers as a joint foreign representative of Saad Investments Company Limited (in Official Liquidation) v Depty Commissioner of Taxation [2014] FCAFC 57 considered (paras 28, 30-32). (3) There was no principle protecting a foreign litigant from being issued with an anti-suit injunction preventing it from resorting to its own domestic courts; the rights and liabilities of claimants against an insolvent's assets were the same regardless of their nationality or place of residence. The English and BVI courts would not, in principle, exercise their discretion to grant injunctions affecting matters outside their territorial jurisdiction if such injunctions were likely to be disregarded or be considered a futile threat, but that was different from the instant circumstances. It was inimical to the proper winding up process for a creditor to seek to enforce a foreign order which would result in his enjoying prior access to the insolvent estate, Carron Iron considered and Vocalion (Foreign) Ltd, Re [1932] 2 Ch. 196 not applied (paras 33-35, 38-40). (4) The instant court would not interfere with the Court of Appeal's exercise of its discretion to grant the injunction as there was nothing to suggest that allowing S an advantage over other creditors was consistent with the ends of justice. Comity did not require the Court of Appeal to have left the decision to the Dutch courts. The instant case was one where the respective states' judicial and legislative policies were so at variance that comity was overridden by the need to protect British national interests or prevent a violation of international law principles, Barclays Bank Plc v Homan [1992] B.C.C. 757 considered (paras 42-43).

Appeal dismissed

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26 Nov 2014

Privy Council (BVI)
Lady Hale, Lord Clarke, Lord Wilson, Lord Sumption, Lord Toulson

LTL 1/12/2014 : [2014] UKPC 41