Isle of Man High Court follows and applies Bermuda case law on insolvency issues

In a judgment dated 9 December 2016 in the case of Re Banners Broker International, the Isle of Man High Court has stayed the liquidation of an Isle of Man company in favour of a Canadian receivership (since the company’s Centre of Main Interests was held to be in Canada, and there was little commercial benefit in two separate liquidations and receiverships in two different jurisdictions).

In doing so, the Isle of Man High Court appears to have followed and applied a recent judgment of the Supreme Court of Bermuda (although that is a judgment not without its controversies, both as a matter of law and as a matter of practical application).

As His Honour the Deemster Doyle held, however:

Chief Justice Kawaley in Energy Development Group Limited (in provisional liquidation) [2016] SC (Bda) 89 Com, in a judgment delivered on 4 November 2016, skilfully and pragmatically dealt with concerns over duplication of costs in Hong Kong and Bermuda of a provisional liquidation of a company incorporated in Bermuda and listed on the Hong Kong Stock Exchange, when he directed at paragraph 16 that the division of labour should be guided by the overarching principles that:

“(a) the Hong Kong office-holders should have primary carriage of the Hong Kong-based work; and

(b) the Bermuda officer-holders should have primary carriage of the Bermuda-based work …”

The Isle of Man judgment may be of limited precedential value, given that the application before the Court was unopposed, and it was not, therefore, the subject of full argument.

But it is of some interest nonetheless.

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