Invest Bank PSC v Ahmad Mohammad El-Husseini & Ors

Invest Bank PSC v Ahmad Mohammad El-Husseini & Ors

A debtor who causes a company he controls to enter into a transaction at an undervalue for the purpose of prejudicing creditors can be said to have entered into a transaction within section 423 of the Insolvency Act 1986, even if the asset is not beneficially owned by the debtor. Section 423 does not require the asset to be beneficially owned by the debtor, and its scope is not confined by the principles of separate legal personality or the definition of a bankrupt's estate.

Parties
Claimant/appellant: Invest Bank PSC; Defendant/respondent: Ahmad Mohammad El-Husseini; Defendant/respondent: Mohammed Ahmad El-Husseiny; Defendant/respondent: Alexander Ahmad El-Husseiny; Defendant/respondent: Ziad Ahmad El-Husseiny; Defendant/respondent: Ramzy Ahmad El-Husseiny; Defendant/respondent: Joan Eva Henry; Defendant/respondent: Virtue Trustees (Switzerland) AG; Defendant/respondent: Global Green Development Limited; Advocate: Daniel Warents (for 3rd and 4th Defendants)
Jurisdiction
England and Wales
Judgment Date
11 September 2024
Procedural Posture
Civil Appeal / Appeal From High Court Preliminary Applications (permission to Amend, Jurisdiction, Summary Judgment)
Outcome
Bank's appeal allowed; Defendants' appeal dismissed.
Legal Topics
Transactions at Undervalue, Fraudulent Conveyances, Separate Legal Personality, Clawback Provisions, Statutory Interpretation
Insolvency Law Company Law Civil Procedure Transactions at Undervalue Fraudulent Conveyances Separate Legal Personality Clawback Provisions Statutory Interpretation

Case Brief

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Parties

Invest Bank PSC

Claimant/appellant

Ahmad Mohammad El-Husseini

Defendant/respondent

Mohammed Ahmad El-Husseiny

Defendant/respondent

Alexander Ahmad El-Husseiny

Defendant/respondent

Ziad Ahmad El-Husseiny

Defendant/respondent

Ramzy Ahmad El-Husseiny

Defendant/respondent

Joan Eva Henry

Defendant/respondent

Virtue Trustees (Switzerland) AG

Defendant/respondent

Global Green Development Limited

Defendant/respondent

Daniel Warents (for 3rd and 4th Defendants)

Advocate

Procedural Posture

Civil Appeal / Appeal From High Court Preliminary Applications (permission to Amend, Jurisdiction, Summary Judgment)

Legal Issues

  1. 1 Whether a debtor can enter into a transaction within section 423 of the Insolvency Act 1986 when acting through a company he controls
  2. 2 Whether a transaction under section 423 requires the asset to be beneficially owned by the debtor

Ratio Decidendi

A debtor who causes a company he controls to enter into a transaction at an undervalue for the purpose of prejudicing creditors can be said to have entered into a transaction within section 423 of the Insolvency Act 1986, even if the asset is not beneficially owned by the debtor. Section 423 does not require the asset to be beneficially owned by the debtor, and its scope is not confined by the principles of separate legal personality or the definition of a bankrupt's estate.

Court Disposition

Bank's appeal allowed; Defendants' appeal dismissed.

Orders

  • Bank permitted to pursue its claim under section 423 of the Insolvency Act 1986 as pleaded.
  • Defendants' appeal on beneficial ownership issue dismissed.