Recognition of foreign trust bankruptcy


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US receivers of a bankrupt trust engaged in a commercial scheme in the US and Canada sought recognition in the English court and also to enforce a US default judgment for US $160,000,000 obtained against certain parties who had taken money from the trust when it was insolvent.

In David Rubin and Henry Lan v Eurofinance and Others [2009] EWHC 2129 (Ch) the court had to consider whether the Cross-Border Insolvency Regulations 2006 applied where foreign bankruptcy proceedings related to a debtor which, according to English law, had no legal personality, being neither an individual nor a corporation.

In light of the international origin of the regulations and the need to promote uniformity, the court held that the trust was a debtor for the purposes of the regulations and the Model Law of the United Nations Commission on International Trade Law, and the court must therefore recognise the US insolvency proceedings as the foreign main proceedings.

However, the court could not accede to the request to enforce a judgment in personam, if it was contrary to English private international law. The court would not exercise discretion in favour of the applicant as the defendant had not been present within the jurisdiction nor had he submitted to the jurisdiction of the foreign court.

Paul Howcroft, Partner, Fladgate LLP (phowcroft@fladgate.com)

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