Stanford International Bank

Sir Alan Stanford’s bank collapsed triggering international claims on any assets that were left over. In a complex action between liquidators, the SFO and the American authorities, Andrew Mitchell QC and Christopher Convey acted in restraint proceedings and the multi-party appeal.

The case was reported in the following way:

The centre of main interest of a company, for the purposes of recognition of a foreign main proceeding in cross-border insolvency proceedings, was to be identified by reference to factors which were both objective and ascertainable by third parties, not by applying the head office functions test.

In complex cross-border insolvency proceedings arising from alleged fraud where an application for a restraint order under the Proceeds of Crime Act 2002 was involved with issues arising in related civil litigation, it was important that in the jurisdiction committed to the Crown Court under the 2002 Act suitable judicial expertise was matched to the needs of the cases concerned and that restraint order applications and associated litigation were managed in a co-ordinated manner.

The Court of Appeal so held (1) dismissing the appeal from the order of Lewison J [2009] EWHC 1441 (Ch) made on 3 July 2009 whereby, on recognition applications made (i) by Ralph Steven Janvey, the United States receiver of Stanford International Bank Ltd (“SIB”) and (ii) by Peter Nicholas Wastell and Nigel John Hamilton-Smith, the Antiguan liquidators of SIB, he had granted recognition to the Antiguan liquidators as the foreign main proceeding as defined in art 2(g) of the UNCITRAL Model Law on Cross-Border Insolvency and dismissed the US receiver’s application, on the basis that the liquidators’ proceedings rather than the receiver’s were the foreign main proceedings; and (2) (Arden LJ dissenting) allowing the appeal of the US receiver (pursuant to permission granted on 31 July 2009 by Rix LJ) against the refusal of Judge Kramer QC on 29 July 2009 at the Central Criminal Court to discharge or vary a restraint order which he had made on 7 April 2009 against those named in a letter of request under art 8 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005, setting aside the restraint order on grounds of material misrepresentation and non-disclosure by the Serious Fraud Office (“SFO”) but re-granting a restraint order with effect from 29 July 2009.

The centre of main interest of a company, for the purposes of recognition of a foreign main proceeding in cross-border insolvency proceedings, was to be identified by reference to factors which were both objective and ascertainable by third parties, not by applying the head office functions test.

In complex cross-border insolvency proceedings arising from alleged fraud where an application for a restraint order under the Proceeds of Crime Act 2002 was involved with issues arising in related civil litigation, it was important that in the jurisdiction committed to the Crown Court under the 2002 Act suitable judicial expertise was matched to the needs of the cases concerned and that restraint order applications and associated litigation were managed in a co-ordinated manner.

The Court of Appeal so held (1) dismissing the appeal from the order of Lewison J [2009] EWHC 1441 (Ch) made on 3 July 2009 whereby, on recognition applications made (i) by Ralph Steven Janvey, the United States receiver of Stanford International Bank Ltd (“SIB”) and (ii) by Peter Nicholas Wastell and Nigel John Hamilton-Smith, the Antiguan liquidators of SIB, he had granted recognition to the Antiguan liquidators as the foreign main proceeding as defined in art 2(g) of the UNCITRAL Model Law on Cross-Border Insolvency and dismissed the US receiver’s application, on the basis that the liquidators’ proceedings rather than the receiver’s were the foreign main proceedings; and (2) (Arden LJ dissenting) allowing the appeal of the US receiver (pursuant to permission granted on 31 July 2009 by Rix LJ) against the refusal of Judge Kramer QC on 29 July 2009 at the Central Criminal Court to discharge or vary a restraint order which he had made on 7 April 2009 against those named in a letter of request under art 8 of the Proceeds of Crime Act 2002 (External Requests and Orders) Order 2005, setting aside the restraint order on grounds of material misrepresentation and non-disclosure by the Serious Fraud Office (“SFO”) but re-granting a restraint order with effect from 29 July 2009.

Download: Stanford International [2010] EWCA Civ 137.pdf