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There had been a movement in exchange rates from the time when the
winding‐up petition was presented in the UK when the pound was equivalent to
US$2.42 to the date of the winding‐up Order when it had increased to US$2.56.
After that date there were large fluctuations in the two currencies. It was held
at first instance (Oliver, J) that the date of the winding‐up order was to be the
date on which the exchange rate was to be struck. The basis of this decision was
that the notional discharge of any debts due to creditors was the date of the
winding up order and the exchange rate to be applied had to be consistent and
be the same for all creditors. Please note, however, that in an ex parte
application seeking approval of a scheme of arrangement, in another liquidation
(the Reinsurance Company of Mauritius Ltd – unreported) good reason was
adduced to depart from this arose where creditors lodged their claims over time
as and when they fell due. The court considered that applying exchange rates at
the time of each claim being made gave a truer picture of the estimate of future
claims which had to be made also at the time of the winding‐up order.
Re Eddystone Marine Insurance Company [1892] 2 Ch 423. Company A insured a
ship and reinsured part of the risk to company B. The reinsurance contained a
pay as paid clause in the following form: "a reinsurance…to pay as may be paid
thereon". The ship in question sustained insured losses. Both company A and B
went into liquidation before company A had paid any sums under the insurance.
The liquidator of company A claimed in the liquidation of company B for the
amount due under the reinsurance. It was held by Stirling J that payment by
company A on the underlying insurance was not a condition precedent to it
recovering against company B under the reinsurance.
Epikouriko Kefalaio v Anaptyxis (C28/03) [2006] All E.R. (EC) 112 The Greek
Council of State sought a preliminary ruling regarding whether Greek Statute
complied with Council Directives 73/239 and 79/267. A Greek insurance company
was insolvent and Greek legislation allowed some of the company's assets to be
released in order to pay employee claims. The European Court of Justice held
that the Greek law did not contravene the directives as there was no
requirement that the assets of an insolvent insurance company should pay
insurance claims only. Moreover, The court stated that Directive 2001/17 Article
10(1) allowed Member States to rank employee claims above those of insureds.
Re Equity & Provident Ltd [2002] 2 B.C.L.C 78. The Secretary of State sought to
wind up Equity and Provident Ltd (E&P), a motor insurer, on public interest
grounds under section 124A of the Insolvency Act 1986 (IA 86). E&P had failed to
cooperate with Secretary of State's requests for information, had mislead
consumers about the scope of the motor cover it was providing and had been
soliciting investments from consumers when not authorised to do so. The Court
found that its power to wind up a company on the grounds of public interest
must be used sparingly and carefully. However, E&P's failure to cooperate with
the Secretary of State, in particular the deliberately evasive conduct of one of its
directors including using a number of different aliases, was sufficient reason to
wind up the company on public interest grounds.
Re Focus Insurance co Ltd [1997] 1 B.C.L.C. 219. The Bermudian liquidators of
Focus Insurance Co Ltd (F) obtained judgement against a former director of F,
H, for $20million and a Mareva injunction against the disposal of the assets. In
order to enforce this judgement in England, the liquidators made an application
to the English Court using s. 426(4) of the Insolvency Act 1986. The English Court
found that it had a mandatory obligation, under s. 426(4), to assist the courts of
any "relevant country or territory" of which Bermuda was one. However, the
English Court found that granting the requested order would create a
inconsistency with the duties of H's trustee in bankruptcy. The English Court
also found that granting the order would raise an element of oppression as H
may have been obliged to provide the same information to both the Bermuda