East Riding of Yorkshire Council as adminisitrating authority of the East Riding Pension Fund v KMG SICAV-SIF-SA
[2024] EWHC 1069 (Ch)
East Riding of Yorkshire Council as Administrating Authority of the East Riding Pension Fund v KMG Sicav-SIF-GB Strategic Land Fund
8 November 2024
[2024] EWHC 2845 (Ch)
High Court
A company invested money in a foreign fund that went bankrupt. They tried to sue in the UK, claiming the foreign fund was a UK company. The judge said no, because the foreign fund wasn't really a separate company, it was just part of a bigger one, and the investor wasn't a creditor either.
Key Facts
- •East Riding of Yorkshire Council (Appellant) sought compulsory winding-up of KMG SICAV-GB Strategic Land Fund (Respondent) as an unregistered company under the Insolvency Act 1986.
- •Respondent is a Luxembourg-based "Dedicated Fund" within a larger investment company.
- •Appellant invested £20 million in the Sub-Fund, which later became worthless.
- •The Sub-Fund's liquidation under Luxembourg law resulted in a zero net asset value.
- •Appellant argued that the Sub-Fund was an unregistered company under s.220(1) of the Insolvency Act 1986.
Legal Principles
Meaning of "unregistered company" under s.220 Insolvency Act 1986 includes any association and any company, except those registered under the Companies Act 2006 in the UK.
Insolvency Act 1986, s.220
The court must give a reasonable construction to statutes, considering the context and whether Parliament could reasonably have intended the entity to be subject to the winding-up process (In re St James Club, In re International Tin Council).
In re St James Club (1852), In re International Tin Council [1989]
Not every unincorporated association falls within the meaning of s.220 Insolvency Act 1986 (In re International Tin Council, In the Construction Confederation).
In re International Tin Council [1989], In the Construction Confederation [2009]
In determining jurisdiction, relevant factors include whether the entity has contributories, capacity to enter contracts and incur liabilities, and whether there is a risk of conflict between the entity's management and a liquidator.
Case law analysis
Outcomes
Appeal dismissed.
The Sub-Fund was not an unregistered company within the meaning of s.220(1) Insolvency Act 1986. It lacked the characteristics of a company or association intended by Parliament to be subject to the winding-up process. The appellant was not a contingent creditor of the Sub-Fund.