Appollo Engineering Ltd, Re liquidation of [2002] ScotCS 302 (26 November 2002)

Appollo Engineering Ltd, Re liquidation of [2002] ScotCS 302 (26 November 2002)

The court granted the application to sist the liquidation until the final decree in the arbitration, finding that the interests of creditors, members, and liquidators were protected by the CVA, and that Scott's interests as a potential contingent creditor were adequately protected by their right to seek security for costs in the arbitration. The court held that the Noter had satisfied the onus to show that a sist was appropriate in all the circumstances, and that the arbitration could not progress without it.

Citation
[2002] ScotCS 302
Parties
Noter (applicant): Duncan Donald McGruther, C. A. Liquidator of Appollo Engineering Limited [In Liquidation]; First Respondent (former Liquidator): Mr Blin (First Respondent); Second Respondents (counterparty in Arbitration): Scott (Second Respondents)
Jurisdiction
Scotland
Judgment Date
26 November 2002
Procedural Posture
Application in Liquidation Proceedings / Hearing and Determination of Application to Sist (stay) Liquidation
Outcome
Application to sist the liquidation granted, subject to undertaking that the company will not trade during the period of sist.
Legal Topics
Sist (stay) of Liquidation, Creditors' Voluntary Arrangement (cva), Liquidator's Liability for Expenses, Security for Costs in Arbitration
Insolvency Company Law Arbitration Sist (stay) of Liquidation Creditors' Voluntary Arrangement (cva) Liquidator's Liability for Expenses Security for Costs in Arbitration

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Parties

Duncan Donald McGruther, C. A. Liquidator of Appollo Engineering Limited [In Liquidation]

Noter (applicant)

Mr Blin (First Respondent)

First Respondent (former Liquidator)

Scott (Second Respondents)

Second Respondents (counterparty in Arbitration)

Procedural Posture

Application in Liquidation Proceedings / Hearing and Determination of Application to Sist (stay) Liquidation

Legal Issues

  1. 1 Whether the liquidation of Appollo Engineering Limited should be sisted (stayed) pending arbitration under s.5(3)(a) or s.147(1) of the Insolvency Act 1986
  2. 2 Whether a party to arbitration who is not a current creditor but may become entitled to expenses has sufficient interest to oppose a sist
  3. 3 Whether the interests of contingent creditors and former liquidators require protection in the context of a sist

Ratio Decidendi

The court granted the application to sist the liquidation until the final decree in the arbitration, finding that the interests of creditors, members, and liquidators were protected by the CVA, and that Scott's interests as a potential contingent creditor were adequately protected by their right to seek security for costs in the arbitration. The court held that the Noter had satisfied the onus to show that a sist was appropriate in all the circumstances, and that the arbitration could not progress without it.

Court Disposition

Application to sist the liquidation granted, subject to undertaking that the company will not trade during the period of sist.

Orders

  • The liquidation is sisted from the date of the interlocutor until the final decree in the arbitration, subject to an undertaking that the company will not trade during the sist.
  • Case put out By Order to allow for the undertaking to be given.