Court exercises discretion to annul bankruptcy despite statutory requirements for order being met (Nilsson and Carter v Jones)
Restructuring & Insolvency analysis: The High Court has annulled a bankruptcy order made in England against a debtor who had applied for his own bankruptcy, claiming UK domicile while residing in Austria. The joint trustees in bankruptcy sought annulment on the grounds that the debtor was domiciled in Austria (and so the English court lacked jurisdiction to make the bankruptcy order), and that the bankruptcy order served no practical purpose as the bankrupt’s assets were in Austria and could not be realised for UK creditors due to a lack of recognition by the Austrian courts. The High Court found that the debtor had not abandoned his UK domicile of origin, so jurisdiction to make the bankruptcy order was established. However, the court exercised its discretion to annul the bankruptcy order, concluding it ought not to have been made: the main assets were in Austria, Austrian law would not recognise the English bankruptcy, and UK creditors would be unfairly prejudiced by being unable to enforce their claims while non-UK creditors could. Written by Laura Newbery, legal director at Addleshaw Goddard LLP.