When a reasonably substantial connection just isn't enough

When a reasonably substantial connection just isn't enough

What does the recent Buccament Bay Resort case tell us about when an English court will have jurisdiction to wind up a foreign company and what factors it will take into account when exercising its discretion?

Original news

Re Buccament Bay Resort; Re Harlequin Property (SVG) [2014] EWHC 3130 (Ch), [2014] All ER (D) 32 (Oct)

The Chancery Division dismissed the petitioners' application to have a winding up petition heard in England in respect of two foreign companies (BBL and Harlequin), which were part of a group that developed and operated luxury Caribbean resorts. The court ruled that, notwithstanding that a reasonably substantial connection with England had been satisfied, the English court had no jurisdiction for a winding up order in circumstances where, among other things, most of the companies' assets were mainly in a foreign jurisdiction, and where the order sought would prove ineffective.

How did the issue arise and what were the jurisdictional factors?

BBL and Harlequin were both companies incorporated in Saint Vincent and the Grenadines (SVG). The petitioners (investors in the Buccament Bay resort development) sought to wind up the companies in England based on largely undisputed debts.

The arguments on jurisdictional connections included:

England Saint Vincent and the Grenadines
all contracts signed in England by their sole director the governing law of the underlying contracts (for the sale of freehold land in Buccament Bay Resort, SVG) was the law of SVG
all monies payable under the investor contracts routed via another group company in England both companies were incorporated in SVG
SVG operated under the Commonwealth structure of law with the Privy Council as the last resort of appeal, therefore, the system and judicial approach would be the same key management

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