Lloyd's Maritime and Commercial Law Quarterly

Ancillary liquidations and pari passu distribution in a winding-up by the court

Chee Ho Tham *

The doctrine of ancillary liquidations stands at a crossroads. In Re HIH Casualty and General Insurance, the House of Lords stood evenly divided over whether that doctrine might be applied to permit the court to direct English liquidators in an ancillary liquidation to remit assets to foreign liquidators conducting the principal liquidation, even where such remission would result in an ultimate distribution of assets to unsecured creditors at variance with what such creditors would have received had the distribution been conducted by an English liquidator pursuant to English conceptions of pari passu distribution. This paper suggests that the insolvency legislation, closely read, reveals more support for application of ancillary liquidation doctrine in these circumstances so as to permit remission of assets than might initially be assumed.


The multi-national corporation, one of the most significant developments in commercial life of the last century and a half, continues to play an increasingly important role in this. Any reasonably well-developed system of law must cater for the multi-jurisdictional disputes in which a multi-national corporation is liable to be entangled so as to address questions of presence, domicile, recognition of the corporation’s separate personality and the operation of the corporate veil, and so forth. One area of particular complexity is where a multi-national corporation is subjected to insolvency proceedings1 in concurrent jurisdictions. This complexity is not new, as English courts have been empowered to wind up foreign companies since 1862.2 But, even if some improvements have been made through statute, age has not brought with it clarity.

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