The court has refused an application by claimants to stay English proceedings pending the outcome of proceedings in the US.
The liquidators of a mobile phone company asserted that the company’s creditors were victims of fraud involving a refinancing that had taken place in 2006. They issued proceedings in the US, claiming a fraudulent transfer (under New York law) and unjust enrichment. The liquidators subsequently issued proceedings in England, seeking relief pursuant to sections 213 and 423 of the Insolvency Act 1986, and applied for a stay.
The court noted that such an application should be granted only in very rare circumstances and where the benefits clearly outweigh any disadvantage to the other party. It concluded that, in this case, the factors pointed overwhelmingly against the grant of a general stay. This is an unusual example of a stay of proceedings being sought by the claimant, and confirms that the court will consider the principles set out in Klockner Holdings GmbH v Klockner Beteiligungs GmbH  EWHC 1453 (Comm).
The court also refused to grant a limited stay to enable the liquidators to arrange funding. This decision emphasises that, on making such an application, it is important to submit evidence of the steps taken to secure funding and the type of funding being sought.
Case: Hosking and others v Apax Partners LLP and others  EWHC 1986 (Ch).