Vol 15 (2018) - Issue 4

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Using a Cross-Claim to Injunct a Winding-up Petition: The Position Considered and Restated in LDX International Group LLP v Misra Ventures Limited

Synopsis

LDX International Group LLP v Misra Ventures Limited is an excellent summary of when a debtor can use a cross-claim to restrain a winding-up petition. It follows In re Bayoil and holds that a debtor’s cross-claim must be genuine and serious, or, in other words, one of substance. Although the Companies Court is not the right court for a detailed examination of the counterclaim, the debtor has the burden of proof and there is a minimum evidential threshold. Equally, given the draconian nature of a winding up order and serious consequences if wrongly granted, the court will proceed cautiously before allowing a petition to proceed.

Introduction

Some cases are noteworthy as they break new ground, others because they are an excellent summary of the relevant law – the recent case of LDX International Group LLP v Misra Ventures Limited [2018] EWHC 275 (Ch) is the latter. In his judgment, David Stone (sitting as a Deputy High Court Judge) considered when an asserted cross-claim can justify an injunction to restrain a winding-up petition. David Stone considered the various relevant cases and provided a helpfully concise summary of the key principles.