Schmitt v Deichmann & Ors

Schmitt v Deichmann & Ors

The English court has inherent common law jurisdiction to recognise and assist a foreign administrator, including authorising the use of s. 423 of the Insolvency Act 1986 to set aside transactions at an undervalue, even where the statutory provisions do not expressly apply to the foreign administrator. The principle of modified universalism and the collective nature of insolvency proceedings justify such assistance, provided it does not conflict with express statutory limitations.

Parties
Applicant: Frank Schmitt; Appellants: Henning Deichmann and 14 Others
Jurisdiction
England and Wales
Judgment Date
23 January 2012
Procedural Posture
Insolvency Appeal / Judgment on Appeal
Outcome
appeal dismissed
Legal Topics
Recognition of Foreign Insolvency Proceedings, Common Law Assistance to Foreign Office Holders, Statutory Powers Under Insolvency Act 1986, Cross Border Insolvency, Jurisdiction to Set Aside Transactions at Undervalue
Insolvency Private International Law Recognition of Foreign Insolvency Proceedings Common Law Assistance to Foreign Office Holders Statutory Powers Under Insolvency Act 1986 Cross Border Insolvency Jurisdiction to Set Aside Transactions at Undervalue

Case Brief

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Parties

Frank Schmitt

Applicant

Henning Deichmann and 14 Others

Appellants

Procedural Posture

Insolvency Appeal / Judgment on Appeal

Legal Issues

  1. 1 Whether the English court has inherent common law jurisdiction to permit a foreign administrator to use statutory powers under s. 423 of the Insolvency Act 1986
  2. 2 Whether common law powers allow a foreign administrator to seek relief not expressly available under statute
  3. 3 Whether s. 426 of the Insolvency Act 1986 excludes or limits common law assistance

Ratio Decidendi

The English court has inherent common law jurisdiction to recognise and assist a foreign administrator, including authorising the use of s. 423 of the Insolvency Act 1986 to set aside transactions at an undervalue, even where the statutory provisions do not expressly apply to the foreign administrator. The principle of modified universalism and the collective nature of insolvency proceedings justify such assistance, provided it does not conflict with express statutory limitations.

Court Disposition

appeal dismissed

Orders

  • The appeal is dismissed.
  • Jurisdiction to authorise the administrator to use s. 423 is confirmed.