UK: Supreme Court hears argument in Petrodel case

In the Supreme Court today and tomorrow a panel of seven judges will hear argument in what looks set to be one of the most important company law cases of recent years. The proceedings will be broadcast live: see here. The issue for the court, as outlined in its summary of the case, is as follows: is it open to the court in ancillary relief proceedings to treat the assets of a company of which a spouse is the sole controller as being assets to which that spouse is ‘entitled’ for the purposes of section 24(1)(a) of the Matrimonial Causes Act 1973.

In the Court of Appeal the majority (Rimer and Patten LJJ; Thorpe LJ dissenting) provided a strong endorsement of the company's separate legal personality: see [2012] EWCA Civ 1395. Rimer LJ stated: "... the separate corporate identity of a company is a fact of legal life that all courts are required to recognise and respect, whatever jurisdiction they are exercising" (para. [155]). Patten LJ stated that section 24(1)(a) did not give the court the power to disapply the established principles of legal and beneficial ownership or of company law (para. [160]).