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Was the liquidator of a Bahamian mutual fund, in compulsory liquidation, entitled to serve a fraudulent preference claim outside the jurisdiction? Representatives of the appellant, Brian Simms QC and Sophia Rolle-Kapousouzoglou, senior partner and partner respectively at Lennox Paton, discuss the outcome of the case which has far-reaching implications for the insolvency law of The Bahamas.
AWH Fund Ltd (in compulsory liquidation) v ZCM Asset Holding Co (Bermuda) Ltd (Bahamas)  UKPC 37
Applications to set aside clawback claims or fraudulent preference claims concerning payments made to investors in international business companies within the statutory period preceding winding up are to have extra-territorial effect.
The judgment of the Judicial Committee of the Privy Council (JCPC) was delivered on 29 July 2019 following an appeal from a decision of the Court of Appeal of The Bahamas. The JCPC held that the liquidator of a Bahamian mutual fund, AWH Fund (AWH) was entitled to serve a fraudulent preference claim outside the jurisdiction. The liquidator brought proceedings in an attempt to restore to the insolvent mutual fund (which had been in liquidation for over 17 years) funds paid away to a third party within the period of three months commencing with the date when AWH entered liquidation.
The judgment raises important issues of international cross-border jurisprudence as well as issues for the Bahamian legislature concerning the jurisdictional reach of clawback claims in winding up proceedings. The effect of the judgment is that although The Bahamas does not have express statutory provisions governing the jurisdictional scope
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