Anonymised summary of the Court of Appeal judgment

Factual and Procedural Background

(All parties and entity names have been anonymised. Citations retained only where they are legal authorities.)

The central question addressed on this second appeal was whether a segregated investment portfolio ("Dedicated Fund A") within a Luxembourg specialised investment company ("Company A") falls within the definition of an "unregistered company" in section 220 of the Insolvency Act 1986 and therefore can be wound up by the English court under section 221 of that Act.

Company A is a Luxembourg public limited specialised investment company regulated by a Luxembourg regulator ("Regulator A"). Company A is structured as an "umbrella fund": it maintains a number of Dedicated Funds that are separate portfolios of assets owned and managed by Company A. Investors in a Dedicated Fund receive class-specific shares in Company A; their rights in respect of a class are limited to the assets attributed to the corresponding Dedicated Fund, and inter-shareholder relations are governed by the company's articles of association ("Articles") and an Offering Document.

Dedicated Fund A was launched in 2010 with an objective of investing in strategic land assets in a specified jurisdiction. The Appellant (a pension-fund investor, "Pension Fund A") subscribed £20,000,000 on 1 August 2014 in return for Class C Sterling shares. In total about £82 million was subscribed into shares attributable to Dedicated Fund A, with about £27 million subsequently redeemed. The invested monies were used by Company A (through Luxembourg subsidiaries) to finance several development projects (described in the judgment as the main projects and other partnership investments).

Events leading to the contested petition: financial statements showed net assets of approximately £68 million (year ended 31 December 2015). On 29 June 2016 Company A suspended the calculation of the net asset value (NAV) and the issue and redemption of shares in Dedicated Fund A due to valuation uncertainty arising from significant exposure on an option to acquire land. The NAV fell (audited position for 2016 disclosed net assets of c. £36.4 million and auditors reported insufficient audit evidence in respect of inter-company loans). In February 2019 Company A's board resolved to conduct a liquidation of Dedicated Fund A and appointed a liquidator to act under board supervision. A final notice in December 2020 stated that the liquidation NAV of Dedicated Fund A was zero, and that no distribution to shareholders would occur.

On 3 May 2021 the Appellant presented a compulsory winding-up petition in the Companies Court seeking an order that Dedicated Fund A be wound up under the Insolvency Act 1986. The Appellant alleged it was a contingent creditor of Dedicated Fund A (or in any event had sufficient interest) and relied on section 221(5)(a) (that the company had ceased to carry on business). Permission to serve the petition out of the jurisdiction was granted and later sustained on an interlocutory appeal.

At first instance Judge Kyriakides (Deputy Judge) dismissed the petition: see the reserved judgment at [2024] EWHC 1069 (Ch). On appeal that dismissal was upheld by Judge Smith: see [2024] EWHC 2845 (Ch). On the present appeal to the Court of Appeal, the lead judgment was given by Judge Snowden, with Judges Davies and King agreeing. The Court of Appeal dismissed the appeal.

Legal Issues Presented

1. Whether a Dedicated Fund of a Luxembourg specialised investment company (here, Dedicated Fund A) is an "unregistered company" within the meaning of section 220 of the Insolvency Act 1986 and therefore capable of being wound up under section 221.
2. Whether the Appellant is a contingent creditor of Dedicated Fund A with standing to present a winding‑up petition in England (i.e. whether the Appellant has a sufficient interest under the relevant statutory provisions and under the governing Luxembourg law).
3. Whether, exceptionally, the English court should exercise its discretionary winding‑up jurisdiction (on the authority of Re Russian & English Bank) in circumstances where the Appellant contends it would otherwise be without an adequate remedy.

Arguments of the Parties

Appellant's Arguments

• The Appellant contended that Dedicated Fund A fell within section 220(1) of the Insolvency Act 1986 — either as an association or as a company — and therefore could be wound up pursuant to section 221.
• In submissions before the Court of Appeal the Appellant advanced that Dedicated Fund A was an "association" and met the tests (derived from authorities such as St. James' Club and ITC) that an association carried on with a view to profit and having the relevant characteristics should be subject to winding up.
• The Appellant asserted it was a contingent creditor because, under Luxembourg law, a shareholder can convert into a creditor in the event of a recovery for distribution following a Dedicated Fund liquidation; accordingly the Appellant sought the appointment of an English liquidator to investigate and pursue recoveries.
• The Appellant further relied on the proposition that the availability of a form of judicial liquidation in Luxembourg indicated that Dedicated Fund A was the sort of body that ought to be capable of being wound up under English law.
• Finally, the Appellant argued that, exceptionally and relying on Re Russian & English Bank, the English court should make a winding‑up order to provide an effective remedy where other remedies appeared inadequate.
• At the hearing the Appellant's advocate (Attorney Lewis) accepted that unless the Appellant succeeded on Ground 1 (i.e. that Dedicated Fund A fell within section 220(1)) the petition could not be maintained.

Company A's Arguments (Respondent)

• Company A contended that Dedicated Fund A is not a company or an association for the purposes of section 220(1) and is therefore outside the scope of the winding‑up jurisdiction under section 221.
• Company A relied on expert evidence of Luxembourg law to the effect that a Dedicated Fund is merely a segregated pool of assets within the umbrella company, has no separate legal personality, cannot own assets or incur liabilities in its own name, and cannot enter into legal relations independently.
• Company A submitted that investors' rights are rights as shareholders of Company A (governed by the Articles and Offering Document) and any surplus recoveries following a liquidation process would be matters for Company A to distribute to shareholders; accordingly the Appellant would, at best, be a contingent creditor or shareholder of Company A rather than of Dedicated Fund A.
• Company A also argued that there was insufficient evidence about the adequacy (or inadequacy) of remedies available in Luxembourg to support any exceptional exercise of the English winding‑up jurisdiction; the Re Russian & English Bank argument therefore failed on the available evidence.
• By way of procedural reply, Company A relied upon a respondent's notice that the petitioner must establish, on the balance of probabilities, that it is a creditor of the body subject to the petition.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
In Re The St. James' Club (1852) 2 De G.M.&G. 383	Authority for a limited construction of "association" in winding‑up statutes: social or purely recreational clubs and similar bodies are not necessarily within the scope of winding‑up legislation.	The court relied on St. James' Club to explain that "association" must be read in the context of winding‑up legislation and that Parliament cannot reasonably have intended the statutory machinery to apply to all associations without regard to their substantive character.
In Re International Tin Council [1989] Ch 309 (ITC)	Confirms that "association" in the statutory context excludes bodies which Parliament could not reasonably have intended to make subject to domestic winding‑up, for example certain international organisations.	The court used ITC to reinforce the test that an association must be the kind of body Parliament intended to be subject to the winding‑up process; ITC supported a contextual, purposive approach to the word "association".
Re Caledonian Employees Benevolent Society [1928] SC 633	States that the essential characteristic of bodies described as companies, associations or partnerships is that they are founded on some contractual obligations between their members (a consensual society).	The court cited Caledonian to emphasise that an association for these purposes requires a contractual or consensual basis between constituent members — a feature absent in Dedicated Fund A.
Re Russian & English Bank [1932] 1 Ch 663	Historical authority relied upon as a basis for exceptional exercise of the court's winding‑up jurisdiction in circumstances where alternative remedies were inadequate.	The Appellant invoked this authority to seek an exceptional winding‑up order; the court held there was "scant evidence" to establish the necessary factual basis to invoke that exceptional jurisdiction and declined to make such an order.
Cambridge Gas Transportation v Navigator [2006] UKPC 26	Describes compulsory winding up as a process of collective enforcement of debts and pari passu distribution to creditors.	The court relied on this authority to explain the nature and purpose of winding up under the Insolvency Act — a collective remedy for creditors — and to test whether that machinery could sensibly be applied to a Dedicated Fund which lacks separate legal personality.
Parmalat Capital Finance v Food Holdings [2008] UKPC 23	Reinforces the collective‑enforcement character of winding‑up and the role of the liquidator under section 143(1) of the Insolvency Act.	The court cited the case in support of the proposition that winding‑up is carried on by a court‑appointed liquidator for the benefit of creditors and that this requires identifiable debtor status and assets available to satisfy creditors' claims.
Re Witney Town FC [1994] 2 BCLC 487	Example of the court using inherent jurisdiction or other processes to deal with the winding up/distribution of clubs and funds without invoking the Insolvency Act.	The court referred to Witney Town FC to show that some liquidation or distribution processes exist outside the statutory winding‑up regime and that the availability of a foreign statutory liquidation does not automatically import the English statutory regime.
Re William Denby & Sons Sick and Benevolent Fund [1971] 1 WLR 973	Illustrates non‑statutory routes available to the English court for dealing with funds or clubs.	The court cited this authority alongside Re Witney Town FC to underline that not every collective realisation or distribution must be via the Insolvency Act.

Court's Reasoning and Analysis

Statutory starting point. Section 220(1) defines "unregistered company" and expressly includes "any association and any company", subject to express exceptions. Section 221 provides that an "unregistered company" may be wound up under the Insolvency Act, and section 221(5)(a) lists among the circumstances in which an unregistered company may be wound up where the company "is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs." The analytical inquiry was whether Dedicated Fund A falls within that statutory construct.

Lower courts' findings accepted as factual foundation. The Court of Appeal proceeded on the factual findings made at first instance by Judge Kyriakides and upheld by Judge Smith. Those findings, supported by expert evidence, were that under Luxembourg law a Dedicated Fund is a compartment or segregated pool of assets within an umbrella specialised investment company which (i) does not have separate legal personality, (ii) cannot itself enter into legal relations or incur liabilities, (iii) cannot itself hold property in its own name, and (iv) lacks any board or managers who exercise powers separable from the umbrella company.

Meaning of "association" and the test to be applied. The court analysed the meaning of "association" in the statutory context by reference to authorities such as St. James' Club and ITC and to Re Caledonian. Those authorities require the court to assess not simply the linguistic breadth of the word "association" but whether Parliament could reasonably have intended that the particular type of body should be subject to the court's winding‑up jurisdiction. The court emphasised two linked considerations:

• Winding up under the Insolvency Act is a collective process of enforcement of debts against the property of a debtor to be conducted by a court‑appointed liquidator for the benefit of creditors; and
• Accordingly an association, to be within section 220(1), must be a body whose constitution and legal relations are such that the statutory winding‑up machinery — including collection and realisation of assets, admission and distribution to creditors, and potential calls on contributories — can sensibly be applied to it.

Application to Dedicated Fund A. Applying that framework, the court concluded that Dedicated Fund A is not an association which Parliament could reasonably have intended should be wound up under the Insolvency Act for the following principal reasons (each reflecting findings of fact or legal characterisations contained in the judgment):

• Dedicated Fund A is not founded on contractual obligations between constituent members; it is a pool of assets owned by Company A and managed by Company A under the Articles and Offering Document. There is no separate contractual "association" among investors that would be enforceable against a separate entity called the Dedicated Fund.
• Investors do not acquire a proprietary interest in the assets of Dedicated Fund A; they acquire shares in Company A and their rights derive from the Articles and the Offering Document. The Articles specify that rights of shareholders in relation to a Dedicated Fund are rights against Company A, and assets attributed to a Dedicated Fund remain assets of Company A for legal purposes.
• Dedicated Fund A lacks the attributes necessary for the English statutory winding‑up machinery to operate: it has no legal personality, cannot incur liabilities in its own name, has no board or management separable from Company A, and therefore a liquidator appointed by the English court would have no independent powers to realise assets or exercise management functions which are vested in Company A.
• Because the statutory winding‑up process is a collective enforcement remedy for creditors of the debtor entity, and because Dedicated Fund A is not itself a debtor and does not have creditors in the legal sense separate from the creditors of Company A, the statutory machinery does not sensibly apply to Dedicated Fund A itself.

Standing / contingent creditor point. The deputy judge required the Appellant to demonstrate that it was a contingent creditor of the body subject to the petition with sufficiently high probability of success in potential claims so as to justify presentation of the petition under the relevant statutory standing provisions. The Appellant was not in a position to identify claims with such a probability to show a realistic prospect of a surplus arising on a liquidation of Dedicated Fund A. Moreover, the expert evidence indicated that any claims that might generate recoveries would need to be pursued in the name of Company A and any entitlement to a distribution would arise by reference to the Appellant's rights as a shareholder of Company A rather than as a creditor of Dedicated Fund A. Accordingly, the Appellant could at best be a contingent creditor of Company A and not of Dedicated Fund A.

Argument based on Luxembourg judicial liquidation. The Appellant relied on the existence of a Luxembourg statutory procedure under which a District Court may pronounce dissolution and liquidation of a Dedicated Fund in specified circumstances. The Court of Appeal rejected any inference that the mere existence of a Luxembourg judicial liquidation mechanism demonstrates that the UK Parliament intended the English winding‑up regime to apply to Dedicated Funds. There was insufficient evidence about the nature and operation of the Luxembourg procedure to equate it with the English statutory winding‑up process; nor did the existence of a foreign procedure alter the domestic statutory construction required under the Insolvency Act.

Exceptional jurisdiction argument (Re Russian & English Bank). The Appellant also asked the court to exercise an exceptional discretion to wind up Dedicated Fund A on the English court's authority. The Court of Appeal observed that there was scant evidence about the adequacy of remedies available in Luxembourg; in the absence of such evidence the threshold for invoking any exceptional equitable jurisdiction to make a winding‑up order was not satisfied.

Conclusion of analysis. For these reasons the Court of Appeal concluded that Dedicated Fund A is not an "unregistered company" for the purposes of section 220(1) which Parliament could reasonably have intended to be subject to winding up under section 221, and that the Appellant did not establish that it was a contingent creditor of Dedicated Fund A amenable to presenting the petition. The court therefore dismissed the appeal. Because the appeal failed on this fundamental ground, the court did not need to decide other points formally put forward as separate grounds.

Holding and Implications

Holding: APPEAL DISMISSED. The Court of Appeal upheld the decisions below and determined that Dedicated Fund A is not an "unregistered company" within the meaning of section 220 of the Insolvency Act 1986 and therefore is not capable of being wound up under section 221 by the English court.

Immediate consequences for the parties:

• The Appellant's compulsory winding‑up petition in respect of Dedicated Fund A fails and remains dismissed.
• The court recorded that, on the evidence before it, the Appellant was not a contingent creditor of Dedicated Fund A; at best any contingent creditor claim would be against Company A and any distribution rights would derive from shareholder rights in Company A under the Articles and the Offering Document.
• The Court did not exercise any exceptional discretion to make a winding‑up order (the Re Russian & English Bank argument was not made out on the evidence).

Wider implications: The decision applies established principles about the limited statutory meaning of "association" in the winding‑up context and about the essential character of winding‑up as a collective enforcement process for creditors. The court did not purport to establish a novel or broader rule extending the Insolvency Act's winding‑up machinery to bodies which lack the attributes necessary for the statutory process to operate. The Court of Appeal therefore did not set new, expansive precedent on the limits of section 220 beyond applying the reasoning summarised above.

Judgment delivered by Judge Snowden; Judges Davies and King agreed.