Sibir Energy Ltd & Ors v (1) Slocom Trading Ltd & Ors [2014] EWCA Civ 831 (17 June 2014)

Sibir Energy Ltd & Ors v (1) Slocom Trading Ltd & Ors [2014] EWCA Civ 831 (17 June 2014)

The December Loan Agreement was not a sham because the parties intended to create the legal rights and obligations set out in the agreement. The Assignment Agreement, although motivated by a desire to place assets beyond Sibir's reach, was not at an undervalue and therefore Section 423 Insolvency Act 1986 does not apply.

Citation
[2014] EWCA Civ 831
Parties
First Appellant / Second Defendant: Sibir Energy Limited; Second Appellant / Third Defendant: Maritime Villa Holding SCI; Third Appellant / First Defendant: Tatik Inc; First Respondent / Claimant: Slocom Trading Limited; Second Respondent / Claimant: Derbent Management Limited
Jurisdiction
England and Wales
Judgment Date
17 June 2014
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
Sham Transactions, Assignment of Debt, Section 423 Insolvency Act 1986, Fraudulent Preference, Equitable Mortgage, Security Interests
Commercial Law Insolvency Law Contract Law Sham Transactions Assignment of Debt Section 423 Insolvency Act 1986 Fraudulent Preference Equitable Mortgage +1 more

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Parties

Sibir Energy Limited

First Appellant / Second Defendant

Maritime Villa Holding SCI

Second Appellant / Third Defendant

Tatik Inc

Third Appellant / First Defendant

Slocom Trading Limited

First Respondent / Claimant

Derbent Management Limited

Second Respondent / Claimant

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the December Loan Agreement was a sham
  2. 2 Whether the Assignment Agreement was voidable as a fraud on creditors under Section 423 Insolvency Act 1986

Ratio Decidendi

The December Loan Agreement was not a sham because the parties intended to create the legal rights and obligations set out in the agreement. The Assignment Agreement, although motivated by a desire to place assets beyond Sibir's reach, was not at an undervalue and therefore Section 423 Insolvency Act 1986 does not apply.

Court Disposition

Appeal dismissed

Orders

  • The judge's findings and orders are upheld.
  • No relief granted under Section 423 Insolvency Act 1986.