This websites use cookies. By continuing to browse the site you are agreeing to our use of cookies. For more details about cookies and how to manage them, see our cookie policy.

Walker International Holdings Ltd v Congo & Ors (2005)


In the circumstances a judgment debtor was beneficially interested in the shares of a company and a property owned by that company in respect of which the judgment creditor had obtained interim charging orders.


The applicant (W) obtained interim charging orders over the shares of a company (J) and a property owned by J, and a preliminary issue was ordered to be tried as to whether the respondent state (C), as judgment debtor, was beneficially interested in the shares or the property. W had acquired debts due from C under a loan agreement at a discount and had obtained an arbitration award against C. The master gave liberty to enforce the award as a judgment and judgment had been entered against C. W obtained interim charging orders over the shares of J and a London property owned by J on the basis that C, as the judgment debtor, was beneficially interested in the shares and the property. The shares in J were held by a Congolese company (F). F was 80 per cent owned by the state-owned Congolese oil company (S). W submitted that (1) C and S were to be regarded as one and the same thing; (2) F's ownership of the shares in J was a sham device giving the appearance of ownership of the shares by a third party when in reality they were owned by C and/or S, and that F was if necessary to be regarded as an emanation of the state; (3) W had been the victim of transactions and/or arrangements entered into, or participated in, by C and S with the intention of placing assets beyond the reach of creditors and prejudicing the interests of such creditors within the meaning of the Insolvency Act 1986 s.423.


(1) S was an organ of the government of C, such that its assets could be regarded as the assets of C. S was to be equated with C so that it did not have an existence separate from C so that its assets could be regarded in law as belonging to C. The evidence of its activities, such as the use of its money to pay for government expenditure, was inconsistent with S being a commercial company owned by C. (2) F was owned directly and indirectly by C and S. The evidence showed that F originally had no financial autonomy. It also showed a much stronger than normal control by a parent over its subsidiary: huge sums were advanced without interest being provided for and without any formal agreement, contrary to normal accounting principles. The conclusion was that it was of no concern how much money was advanced to F because it was never anticipated that any money advanced would be repaid or that interest would accrue due to S. The existence of F was not necessary. S was spending its own money (or C's money) as S wanted. When F contracted to purchase the shares in J, F had no bank account, no share capital and no employees. The funds for the purchase came from S. S decided to make funds available to buy the shares and it then decided to put the purchase into the name of F. F did not participate in that decision. In all the circumstances F was as much an organ of the state as S. F had not since become a separate and independent subsidiary of S. Although F nominally held the shares in J, in reality ownership of them was retained by S and C. F was no more than an extension of S using government money to undertake various projects. (3) On the assumption that F was separate and distinct from C and S, the relevant transaction for the purposes of s.423 was the putting of the shares into the name of F when F effectively gave no consideration for them. The purpose of transferring the shares to F was to put them beyond the reach of creditors such as W. If necessary the court would have used its powers under s.425 of the 1986 Act to require the shares to be vested in S, so that they would then have become amenable to execution on the basis that C, the debtor, was interested beneficially in both the shares and J's property. (4) C was beneficially interested in the shares of J and J's property.

Preliminary issue determined in favour of claimant.

View all cases

06 Dec 2005

Queen's Bench Division
Morison J

‚ÄčLTL 16/12/2005

Benjamin John
Richard Morgan QC

Practice areas
Company, Partnerships & LLPs