Key Facts
- •Crescent Gas Corporation Limited (CGC) sought relief against National Iranian Oil Company (NIOC) and the Retirement, Saving and Welfare Fund of Oil Industry Workers (the Fund) concerning NIOC House, a London property.
- •NIOC was liable to CGC for USD 2.42997 billion plus interest following an arbitration award.
- •NIOC transferred NIOC House to the Fund in August 2022 (the August Transfer).
- •CGC argued the August Transfer was a transaction defrauding creditors under s.423 of the Insolvency Act 1986 and sought a transfer of ownership or a charging order.
- •The central issues were beneficial ownership of NIOC House at the time of the August Transfer and the purpose of the transfer.
Legal Principles
Transactions defrauding creditors: A transaction at an undervalue is voidable if entered into for the purpose of putting assets beyond the reach of a creditor.
Insolvency Act 1986, s.423
Charging orders: A charge may be imposed only on assets beneficially owned by the judgment debtor.
Charging Orders Act 1979, s.2
Recognition of Trusts Act 1987 and the Hague Convention on the Law Applicable to Trusts and their Recognition: English courts may recognize trusts under foreign law.
Case discussion
Trusts under English law: A trust can be created without using the word 'trust'; the court assesses objective intention.
Case discussion and precedent
Law of Property Act 1925, s.53(1)(b): A declaration of trust respecting land must be manifested and proved by writing signed by someone able to declare the trust.
Case discussion
Outcomes
NIOC was the beneficial owner of NIOC House at the time of the August Transfer.
Despite NIOC and the Fund's long-held belief to the contrary, the court found that NIOC purchased NIOC House with funds borrowed from the Fund and remained the owner under Iranian law. The attempted creation of a trust under English law failed due to insufficient written evidence signed by an appropriate person.
The August Transfer was a transaction at an undervalue entered into for the purpose of putting assets beyond the reach of CGC.
The court found the timing and circumstances of the transfer, coupled with the lack of evidence from key NIOC officials, strongly suggested an intention to avoid CGC's judgment.
The Fund was ordered to transfer NIOC House to CGC.
This order restored the position to what it would have been if the August Transfer hadn't occurred, protecting CGC's interests as the victim of the fraudulent transaction.