Vol 14 (2017) - Issue 3

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A Scottish Take on Modified Universalism and Charges over Foreign Assets?

Overview
In the recent decision of the Court of Session in Hooley Limited v The Victoria Jute Company Limited, the Samnuggar Jute Factory Limited and Titaghur PLC [2016] CSOH 141, Lord Tyre, at first instance in the Outer House, has set out a series of propositions for cross-border security and insolvency law in Scotland. These would appear to be:
(1) a floating charge need not be valid and enforceable under the law governing foreign assets charged in order to be considered valid and enforceable over such assets for the purposes of appointing an administrator out of court under the Insolvency Act 1986 (the 'IA');
(2) a pre-existing or pending liquidation in a jurisdiction outside the European Union in which the business and assets of a Scottish company are located (here being India) does not prevent administration in or out of court of that company taking place in Scotland under the IA; and
(3) such a Scottish administration should be considered by the Scottish courts to be primary and such a liquidation ancillary relative to each other by virtue of the incorporation in Scotland of the company in question.


In coming to his first conclusion above, Lord Tyre also appeared to call into question the apparently extraterritorial effectiveness of English equitable securities under the decision in Re The Anchor Line (Henderson Brothers) Limited [1937] Ch 483 ('Anchor Line') and following on from his third conclusion above Lord Tyre held off (at least initially) from seeking to enforce the primacy favoured in principle for the Scottish administrations over the relevant foreign liquidations.