AWH Fund Ltd (In Compulsory Liquidation) (Respondent) v ZCM Asset Holding Company (Bermuda) Ltd (Appellant) (Bahamas)
Case ID: JCPC 2018/0033
Jurisdiction: The Court of Appeal, Commonwealth of Bahamas
Whether, in the winding up of an International Business Company, the Court has jurisdiction to order service out of the jurisdiction of an interlocutory Summons seeking a declaration that a redemption payment for redeemable shares was an undue and/or fraudulent preference.
ZCM held redeemable shares in AWH as custodian for the benefit of an alternative investment fund, Amex. On 24 July 2002, following ZCM’s redemption request, AWH paid ZCM approximately US$13 million. On 17 October 2002 a petition to wind up AWH was presented. A compulsory winding up order was made on 18 May 2004. On 27 June 2008 the liquidator obtained leave to serve an interlocutory Summons out of the jurisdiction on ZCM in Bermuda, seeking a declaration that the payment constituted an undue and/or fraudulent preference and an order for repayment. It served the interlocutory Summons in Bermuda on 30 September 2008. ZCM obtained leave to enter a conditional appearance to the interlocutory Summons and applied to have the service set aside on the following grounds:
- The Court lacked jurisdiction to order service out of the interlocutory Summons.
- The liquidator failed to disclose a good and arguable cause of action such as to enable the grant of leave / make a valid fraudulent preference claim.
- No cause of action existed against ZCM as it was an agent of Amex.
ZCM Asset Holding Company (Bermuda) Ltd
AWH Fund Ltd (In Compulsory Liquidation)
Lord Reed, Lord Carnwath, Lord Briggs, Lady Arden, Lord Sales
Hearing start date
04 Feb 2019
Hearing finish date
04 Feb 2019