1.4.1. Co-operation wider Common Law ami Ancillary Wimlm-Up

Some degree ofco-operation is available through the recognition of foreign insolvency

proceedings. English courts will generally recognise foreign proceedings taking place

in the state of the debtor's domicile."" Although it is more than a mere acknowledge

ment of the existence of the foreign insolvency and 'carries with it the active assistance

of" the c o u r t " 1 , recognition of proceedings involving corporate debtors will not affect

any property in England." Co-operation in cross-border insolvency seems therefore

generally to take place within the context of concurrent English insolvency proceediings. Such proceedings may vary in character depending on the circumstances of the

case.

The concurrent proceedings in the Maxwell insolvency proceedings illustrate one end

of the spectrum. The success of these proceedings equally depended on co-operation

by the English courts. Admittedly, the English court held the dominant jurisdiction

as home-state and the 'primary' burden o f c o - o p e r a t i o n lay with the United States

courts. Nevertheless, without the necessary degree of flexibility or relaxation of the

principle of universality by the English courts, the co-operation between the jurisdictions

would not have been possible.

A more specific mechanism of cross-border insolvency co-operation is the 'ancillary

winding-up'. According to section 221 1A 1986 English courts have jurisdiction to wind

up 'any unregistered company', which includes any company not incorporated under

English law.'" The grounds on which such a winding-up order may be granted are

provided by section 221 ( 5 ) 1A 1986. These include situations where a company has

been dissolved or ceased to conduct business; where it is unable to pay its debts; and

where the court considers it just and equitable that the company should be wound

up. As far as this latter ground is concerned, the exercise of jurisdiction requires a

sufficient connection between the debtor and the English court. Over time, courts have

adopted a low threshold for this requirement."' It would suffice for there to be some

asset(s) and one or more persons within the court's jurisdiction who have an interest

in the proper distribution of the assets."

Such companies may be or become subject to insolvency proceedings in other jurisdictions,

in particular those under the law of which they have been incorporated. The

fact that proceedings are pending outside the United Kingdom will not in itself bar

the exercise of jurisdiction by the English court under the Insolvency Act."" I lowever, where insolvency proceedings are pending in the state of incorporation of the

(corporate) debtor, an English winding up will as a rule be considered 'ancillary' to

the foreign proceedings.

Although it is not entirely clear what 'ancillary' entails' , the English type o f ' a n c i l l a ry

winding-up' should not in any event be contused with the United States' 'ancillary

proceedings'. 'Ancillary proceedings' in the sense intended by the United States Bankruptcy

Code do not involve insolvency proceedings as such. In contrast, an ancillary

winding-tip order does in principle concern separate insolvency proceedings in the

English courts. 'Ancillary' in this case indicates that in co-ordinating concurrent

insolvency proceedings the primacy of the debtor company's home-state is recognised."

N Consequently, courts see their 'ancillary' task as preventing 'conflict between

the two courts' and, bearing in mind the interests of all the creditors, to 'endeavour

to keep down the expenses of the winding-up as far as possible'.''1 In particular, this

means that ancillary winding-up procedures are 'carefully limited in effect'. " They

are generally considered to have territorial effect only and their objective should be

to remit the assets to the foreign liquidator, enabling the court of the main liquidation

to deal with all the assets and creditors. 1

The possibility of intensive co-operation in ancillary winding-up is limited. The

application ol English insolvency law in English winding-up procedures, be they

principal or ancillary, appears mandatory. In Re English, Scottish, & Australian

Chartered Bank the court observed that

it has always been held that the desire to assist in the main liquidation - the desire

to act as ancillary to the Court where the main liquidation is going on - will not

ever make the Court give up the forensic rules which govern the conduct of its own

liquidations.

More recently, in Felixstowe Dock & Railway Co. v U.S. Lines Ltd., the court held that

'the usual practice is to carry out an ancillary winding-up in England in accordance

with our own rules, while working in harmony with the foreign courts'. 1 Evidently,

the opportunity to assist or to work in harmony is limited when the application of

English insolvency law by the English courts is held to be mandatory. "