Wednesday, 18 November 2020

Guernsey: the scope of section 426 of the Companies (Guernsey) Law 2008

The Royal Court (Ordinary division) gave judgment last month in Re Canargo Ltd [2020] GRC064. A copy of the judgment is available here (registration required). The judgment is noteworthy because it provides guidance on the operation of section 426 of the Companies (Guernsey) Law 2008, which provides that "The liquidator of a company may seek the Court's directions in relation to any matter arising in relation to the winding up of the company and upon such an application the Court may make such order as it thinks fit".

The Lieutenant Bailiff, Her Hon. Hazel Marshall QC, set out certain principles with regard to section 426, the first of which was that the section was "...wide enough in its scope to include an application to the court to approve a liquidator’s intended course of action, either by persuasive analogy with the English decision on the equivalent English companies jurisdiction as exemplified in Re Nortel Networks UK Limited [2016] EWHC 2769 (Ch) or, if necessary, under the court’s inherent jurisdiction" (para. [138]).

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