Frances Coulson
- Partner
- Insolvency & Restructuring
The applicant in Almeqham v Al-Sanea [2025] EWHC 1662 (Ch), the recognised liquidation trustee of Maan Bin Abdul Wahed Al-Sanea and Saad Trading, Contracting and Financial Services Co, applied, pursuant to art 21(1)(d) Cross Border Insolvency Regulations 2006, for relief requiring the respondent to deliver up to him information and documents concerning the assets, affairs, rights, obligations and/or liabilities of Mr Al-Sanea and/or the company.
Mr Al-Sanea senior, and the Saad Group he had established, ran into financial difficulties resulting in an order of 2 March 2022 of the Fifth Appeal Circuit of Saudi Arabia appointing the applicant as liquidation trustee of Mr Al-Sanea himself and Saad Trading, one of the companies in the Saad Group. Following the judgment of the Court of Appeal in Riyadh of 30 March 2023, Mr Al-Sanea was serving a nine-year prison sentence for bribery and other offences. (He was served with the application there in a way which the court accepted.) The respondent to the application was Mr Al-Sanea’s son who had acted for his father in relation to his financial affairs on the basis of powers of attorney. That was one of a number of matters that led the applicant to believe that the respondent had information relating to the assets and affairs of his father and the company which would assist him in proving his claims in English legal proceedings and in identifying further assets located in Great Britain.
The applicant’s appointment as the liquidation trustee of Mr Al-Sanea and Saad Trading was recognised pursuant to the CBIR by order of the English court on 16 February 2024. On 24 May 2024 he obtained (again from the English court) an asset protection order in proceedings relating to 19 properties located in London. The relief he was ultimately seeking in the proceedings took the form of declarations against Mr Al-Sanea and five offshore companies that the properties were held on constructive or resulting trust for Mr Al-Sanea or the company following purported transfers in 2012 from two other companies within the Saad Group, alternatively an order under s 423 Insolvency Act 1986 that title to the properties was vested in them on the basis that the 2012 transfers were made for the purpose of putting them beyond the reach of Mr Al-Sanea’s and/or the company’s creditors. Those were the proceedings which the applicant identified as likely to be assisted by the disclosure he was seeking.
ICC Judge Burton began her analysis with the well known proposition derived from British & Commonwealth Holdings Plc v Spicer & Oppenheim [1993] AC 426 that the exercise of the court’s discretion on an application under s 236 Insolvency Act 1986 involved balancing the reasonable requirement of the office-holder to obtain information against possible oppression to the respondent. She also considered the judgments in Re Sasea Finance Ltd [1998] BCC 216 and Re RBG Resources plc [2002] EWCA Civ 1624. Whilst the legal principles in those cases were not in issue, the parties were at odds regarding the test which the court should apply in considering an application under art 21(1)(d) when, as in this case, it was not accompanied by an application under art 21(1)(g) (pursuant to which the applicant could have sought any relief available to a domestic insolvency office-holder, including relief under s 236). Counsel for the respondent drew the court’s attention to the fact that the relief available under art 21(1)(d) was prefaced by the wording at the start of art 21(1) which provided that the court may grant any appropriate relief “where necessary to protect the assets of the debtor or the interests of the creditors.” That, he submitted, meant that more was demanded than under the “reasonable requirement” test generally applicable when considering a s 236 application. It was further submitted that the case law showed that there was a distinction between the two tests: see Re Chesterfield United Inc. [2012] EWHC 244 (Ch) in which Newey J, as he then was, appeared (in paragraph 13) to contrast the British Commonwealth Holdings test with that in the CBIR connecting the requirement for relief to be “necessary to protect the assets of the debtor or the interests of the creditors.” In the same judgment, however, Newey J expressed the view that art 21(1)(d) was intended to set “a common minimum standard:”
“A foreign representative is to be able to seek relief under art 21(1)(d) regardless of whether an office-holder would be entitled to such relief under the local law. If the local law in fact provides for ‘additional’ relief, a foreign representative can seek that under art 21(1)(g).”
ICC Judge Burton took the view that Newey J’s statement in paragraph 13 of his judgment in Re Chesterfield United, to the effect that in most cases both tests were likely to be met, should not be interpreted as meaning that the same test should invariably apply to all applications under arts 21(1)(d) and 21(1)(g). His reference to that being “likely” to be so, she said, suggested a fact-specific approach: whilst in most cases the facts were likely to give rise to little discernible difference between the two tests, the judge appeared to have left open the possibility for circumstances to arise where the distinction could be important. Judge Burton said, “If, and to the extent that that was his intention, I respectfully concur with his approach.”
She went on, however, to say that in spite of the parties’ submissions on the point, the respondent’s case was that ultimately the issue was academic because the applicant had not established even a reasonable requirement for the documents sought. In those circumstances, she expressed the view that it seemed unlikely that there would be a difference in the outcome. She went on to say:
“I consider the prudent approach is to apply the s 236 test familiar to this court and contended for by the Applicant. It falls to me, therefore, to determine whether the Applicant has established that he reasonably requires the documents and information which he continues to seek by the Application.”
Reminding herself of the purposive approach to be employed when interpreting the provisions of the Model Law urged by the Supreme Court in Rubin v Eurofinance S.A. [2013] 1 AC 236, she held that, having regard to the fact that the court had already made an asset protection order in respect of the English properties, “the Application clearly concerns the Debtors’ ‘affairs’ and should, in any event, be interpreted also to concern their ‘assets.’”
She went on to say that, when undertaking the requisite balancing exercise with a view to determining how to exercise its discretion under art 21(1)(d) and s 236, the court had to consider the purpose for which exceptional powers of the kind in issue were given to insolvency office-holders. Having carried out that exercise, she concluded that, in the case before her, the totality of the applicant’s evidence in support of his application for the documents he was seeking amounted to “no more than a desire to obtain them and to do so earlier than would otherwise be possible, in order to improve his chances in the Recovery Proceedings. He fails to establish any reasonable requirement to see them.” That resulted in the scales tipping in favour of the respondent. In reaching that conclusion the judge also had regard to the very wide description of documents sought, which, in her view, would require searches to be undertaken and costs being incurred.
“In summary,” she said, “whilst I am content that, interpreting the terms purposively, the Documents concern the Debtors’ affairs and obtaining them could be said to be in pursuit of the Applicant’s duty to protect the interests of the Debtors’ creditors, I am not persuaded that the Applicant’s stated purpose, in the circumstances of this case where litigation is already ongoing, comprises a reasonable requirement for him to be entitled to an order compelling their production. If he wishes to obtain them for use in the context of the Recovery Proceedings, the same procedural remedies are available to him as are at the disposal of all other litigants. The English Properties have been secured by the APO and the evidence does not assert any urgent reason for the Documents to be provided any earlier than they might otherwise become available in the Recovery Proceedings. I decline to make an order in the terms sought by paragraphs 1(c) and (d) of the draft order.”
In fact the judge did grant limited relief in respect of certain well defined categories of information, but the bulk of the application was unsuccessful.
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