Case details

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 of the Commonwealth of the Bahamas

Case summary

Issue(s)

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.

Facts

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:

  1. The Court lacked jurisdiction to order service out of the interlocutory Summons.
  2. 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.
  3. No cause of action existed against ZCM as it was an agent of Amex.

Parties

Appellant(s)

ZCM Asset Holding Company (Bermuda) Ltd

Respondent(s)

AWH Fund Ltd (In Compulsory Liquidation)

Appeal

Justices

Lord Reed, Lord Carnwath, Lord Briggs, Lady Arden, Lord Sales

Hearing start date

04 Feb 2019

Hearing finish date

04 Feb 2019

Watch hearing
04 Feb 2019 Morning session Afternoon session