UK: After MF Global: Is S 236 Insolvency Act 1986 Extra-territorial?

Last Updated: 21 December 2015
Article by Kit Jarvis and Freya Law


  • The court in MF Global did not expressly refer to the earlier decision of Re Casterbridge Properties Limited (in Liquidation) [2002] BCC 453 in which the High Court considered that there was "no doubt" about the partial extra-territoriality of s 236, and that the question of the full extra-territoriality of s 236 remained open.
  • The subsequent decision in Omni disagreed with the conclusion reached in MF Global. The Sahaviriya Steel decision highlighted these inconsistent first instance judgments.
  • Whether or not s 236 can be said to be fully extra-territorial needs to be looked at in detail by the Court of Appeal.

After MF Global: is S 236 Insolvency Act 1986 extra-territorial?

In this article, Kit Jarvis and Freya Law extract the principles of s 133 (public examination of officers on a winding up) and s 236 Insolvency Act 1986 (private examination of persons when a company enters administration and liquidation or production of documents) in light of recent case law.

The English High Court has recently denied the application under s 236 Insolvency Act 1986 (IA) of the administrators of MF Global against LCH Clearnet SA (LCH France) seeking production of documents and a witness statement describing the sales of auction processes by which the respondents closed out MF Global's positions with LCH very shortly after the appointment of administrators (Re MF Global UK Ltd (In Special Administration), aka: Fleming v LCH Clearnet Ltd [2015] EWHC 2319 (Ch); 31 July 2015, David Richards J). In doing so, the High Court held that s 236 was not extra-territorial and therefore no order could be made against LCH France.

The court in MF Global did not expressly refer to the earlier decision of Re Casterbridge Properties Limited (in Liquidation) [2002] BCC 453 in which the High Court considered that there was "no doubt" about the partial extraterritoriality of s 236, and that the question of the full extra-territoriality of s 236 remained open. Moreover, the MF Global judgment did not expressly refer to the Court of Appeal case of Re Mid East Trading Ltd [1998] 1 BCLC 240, CA, which, like MF Global, concerned the production of documents situated in a foreign jurisdiction and so was pertinent to the question of extra-territoriality. Indeed, David Richards J himself considered that there was a "good deal to be said for concluding that s 236 was intended to have extra-territorial effect", although he considered himself bound by the Court of Appeal in Re Tucker [1990] Ch 148. Since MF Global, a first instance court has expressly disagreed with the MF Global decision (see Omni below). It would be understandable if insolvency practitioners found themselves a little confused right now.

The reason why this is a fundamental issue is, of course, because s 236 entitles an insolvency practitioner to apply for an order that "any person whom the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property" of the insolvent company appear before the Court, or requiring such a person to give an account of his dealings with the company, or to produce documents in his possession or under his control relating to the company. There is, therefore, a very wide list of potential respondents to a s 236 application. Further, whilst the Court can and does balance the oppression involved in a s 236 application, ultimately it is one of the very few provisions under English law in respect of which a respondent cannot refuse to answer questions on the ground of privilege against self-incrimination.


MF Global had large open positions with LCH France involving European sovereign debt. LCH France closed out those positions on MF Global's entry into administration in 2011. The losses arising were quantified at approximately €422m. The administrators accepted that LCH France were contractually entitled to close out, but were concerned that the losses were exceptionally large when compared with contemporary prices: for example €2.2bn of Italian Government bonds were sold at 5.83 points below the corresponding Bloomberg price and significantly below the price obtained by LCH France the very next day. Not surprisingly, the administrators asked LCH France to disclose its documents relating to its closing out of those transactions so that the administrators could satisfy themselves that LCH France had acted in accordance with their duties under appropriate laws and regulations when exercising that right of close out.

In the week prior to the hearing, the administrators suggested an alternative order to the effect that the English Court request the French Court to examine a responsible officer of LCH France in France under ss 236 and 237(3) IA in accordance with the EU Regulation on Co-Operation Between the Courts of the Member States in the taking of Evidence in Civil or Commercial Matters (1206/2001) (the "Evidence Regulation").

LCH submitted that s 236 had no extraterritorial effect, relying on Re Tucker. This was a decision under s 25 Bankruptcy Act 1914 (BA) which, as applied to bankruptcy, was in substantially the same terms as s 236/237. The lead judgment of Dillon LJ referred to the general rule of English law that unless the contrary is expressly enacted or plainly implied, UK legislation is applicable only to English subjects or to others who by coming into the UK had made themselves subject to English jurisdiction. David Richards J dismissed the "bold" submission of the administrators that Re Tucker was either illogical or made without sufficient analysis of preceding bankruptcy law.

He also dismissed as "plainly wrong" the submission that the reference in s 237(3) to "any person who if within the jurisdiction of the court would be liable to be summoned to appear before it under section 236" meant not just the physical location of the person but also whether the person fell within the meaning of s 236. That phrase was, to David Richards J, 1 simply "an elaborate way" of saying "in England (and Wales)". The court considered other IA provisions which have been held to have extraterritorial effect, namely:

  • Section 133 relating to public examination of directors and others: Re Seagull Manufacturing [1992] Ch 128.
  • Section 213 relating to fraudulent trading: Jetivia SA v Bilta [2015] UKSC 23.
  • Section 238 relating to transactions at an undervalue: Re Paramount Airways Ltd [1993] Ch 223.

The court also considered:

  • Masri v Consolidated Contractors International Co SAL [2009] UKHL 43 which concerned the territorial effect of CPR 71 under which a judgment debtor can be ordered to be examined. That case reviewed Re Tucker in some detail without any suggestion that it was wrongly decided.
  • McIsaac and Wilson, Petitioners [1994] BCC 410, a Scottish case which gave extra-territorial effect to s 236 but upon which neither the administrators nor LCH France put any weight, because it appears to have proceeded on a mistaken belief.

Ultimately, David Richards J concluded that it was "impossible to overlook" Re Tucker as a binding precedent on a first instance court, the re-enactment of earlier private examination provisions in s 25 BA in substantially the same terms as s 236(2) and the presence of s 237(3). Accordingly, s 236 did not have extra-territorial effect and no order could be made under it against LCH France.

However, this is not the end of the matter, because LCH France accepted (as had been held in Re Tucker as regards s 25(6) BA) that the court could make an order against it "in an appropriate case" under s 237(3). Before making any such order, the court would have to be convinced that the case is covered by available procedural machinery by which the respondent could be compelled to comply with the order to produce documents or be examined. The problem in this particular case was that the Evidence Regulation did not apply because the administrators were seeking the order to enable them to consider whether it would be appropriate to bring proceedings - if they had reached a firm decision to bring proceedings s 236 is unlikely to have been available in any case: Re Castle New Homes Limited [1979] 1 WLR 1075.


Re Casterbridge considered s 133 IA and Burton J examined in detail the issue of whether s 236 has extra-territorial effect. He considered Dillon LJ's judgment in Re Tucker and noted that in Re Seagull the Court of Appeal held that s 133 IA had extra-territorial effect, though Burton J thought that the Court of Appeal in Re Seagull had clearly left the extra-territoriality of s 236 open. He went on to say:

"there is a potential issue about the full extra-territoriality of a s.236 order...I do not need to resolve that issue. [The Official Receiver's]...arguments seem to be more logical, but the [applicant seeking to set aside the order under section 133]...may be said to have the greater backing of authority, albeit not binding. It remains...the position that a s.236 order may not have full extra-territorial effect. There is no doubt about (a) the partial extra-territorial effect of s.236, or (b) the undoubted full extra-territorial effect of s. 133." (para 48(i))

The debate in this case between "partial extra-territoriality" and "full extra-territoriality" occurred because of a concession by the applicant that s 236 had extra-territorial effect, but that this was limited, where there was an application for private examination of someone abroad, to ordering such examination to take place in the foreign country in which he or she was situated ("partial extra-territoriality"), such that there could not be jurisdiction under s 236 to require such a person to attend private examination in England ("full extra-territoriality"). Burton J clearly considered that this concession was correctly made because of the words of s 237(3). This appears to be essentially the same concession that LCH France made in MF Global that the court could make an order against it "in an appropriate case" where a foreign court would compel the respondent to comply with the order. Whilst Burton J deliberately did not resolve the issue of "full extra-territoriality" of s 236, he certainly did not consider that Re Tucker made the position as clear as David Richards J did in MF Global.

David Richards J in MF Global noted that the Court of Appeal in Re Seagull had considered Re Tucker without any suggestion that Re Tucker was wrong. The conclusion that the provisions for private examination under s 25 BA did not have extra-territorial effect was distinguished on the grounds that:

  • the persons who could be the subject of public examination under s 133 were more narrowly confined; and
  • section 25(6) (which was "re-enacted" in s 237(3)) was considered conclusive by Dillon LJ in Re Tucker, but no similar provision applied in relation to s 133.


On 14 September 2015, HHJ Hodge QC (sitting as a Judge of the High Court) handed down the judgment in Re Omni Trustees Ltd (In Liquidation) (The Official Receiver v Tristram Norriss) [2015] EWHC 2697 (Ch). In this case, the Official Receiver applied for the production of a witness statement, with supporting documents, detailing and exhibiting various matters identified in the Application Notice from the Respondent, Mr Norriss, who resides in Hong Kong. The Official Receiver did not seek an examination of Mr Norriss either in the UK or in Hong Kong. Mr Norriss fell within the scope of s 236(2) IA as a person who was capable of giving information concerning the business, dealings, affairs and property of Omni.

Counsel for the Official Receiver took HHJ Hodge QC at length through the decisions in MF Global (up to para 33) and Tucker (particularly p 155C to p 159 G, including what is said at p 158 D-E namely that the court will not compel someone to come to this jurisdiction to be examined on oath and to produce documents).

Counsel submitted that a crucial distinction is to be drawn between:

  • compelling a respondent to a s 236 application to attend court for examination; and

requiring the production of documents or an account of dealings – had that distinction been identified before David Richards J in MF Global, he would have been entitled to regard the latter as falling outside the scope of the decision in Tucker.

Had the case been presented in that way, Counsel submitted, David Richards J might well have felt able to conclude that s 236(3) is intended to have extra-territorial effect, leaving it to the court's discretion to keep the use of s 236 within reasonable bounds.

Counsel also submitted that David Richards J's judgment failed properly to distinguish between the requirements of a respondent to:

  • be examined on oath; and
  • give an account of dealings or produce documents.

He did so because his attention had not been drawn to the structural difference between the statutory provision of s 25 BA (which the Court of Appeal considered in Tucker) and ss 236(2)(3) IA considered in MF Global. Crucially, the Court of Appeal's decision in Re Mid East appears not to have been cited to David Richards J either which might have assisted him in his deliberations.

HHJ Hodge QC agreed with Counsel. He stated at para 21 of his judgment:

"I accept those submissions, which I am satisfied are well-founded, with considerable reluctance and some hesitation. I decline to follow the decision of Mr Justice David Richards in the MF Global (UK) Ltd case. In my judgment, [s 236(3) IA] ... does have extra-territorial effect; ... the court does indeed have jurisdiction to require a person resident outside the jurisdiction to submit to the court an account of his dealings with the company, or to produce any books, papers or other records in his possession or under his control relating to the company."


  • Insolvency practitioners would be forgiven for being confused about all of this learned debate. The principles appear to be:
  • Under s 133 a liquidator (either in an involuntary or a voluntary (using s 112IA) winding up) can apply for the public examination of officers and others who have been concerned or taken part in the promotion, formation or management of the company.
  • Section 133 orders have extra-territorial effect: Re Seagull; Re Casterbridge.
  • Section 236 applies when a company enters administration, administrative receivership, liquidation or provisional liquidation: s 236(1).
  • Section 236 examinations are made in private, unlike public examinations under s 133.
  • Section 236 applications can be made against any person whom the court thinks capable of giving information concerning the promotion, formation, business, dealings, affairs or property: s 236(2) (c). The purpose of s 236 applications is to enable a court to assist a liquidator to get to the truth of the company's affairs, trading and dealings, quickly and with minimal expense, so that the liquidator can complete his functions as a liquidator (including where appropriate, ascertaining the facts about potential claims): British and Commonwealth Holdings plc v Spicer & Oppenheim [1993] AC 426 at 438, HL.
  • Section 236 orders take "partial extra-territorial" effect: s 237(3) – meaning the court may order the private examination of those persons who are either:
  • in the UK or submitting to UK jurisdiction; or
  • based in a foreign country in that location. It also appears to mean that if a foreign court can compel the respondent of a s 236 application to comply with the order to produce documents or give evidence, then the English court can make an order under s 236.
  • Section 236 orders may not take "full extra-territorial" effect: Re Tucker, Re Casterbridge and MF Global. If a foreign court will not enforce a s 236 order in its own jurisdiction, a s 236 order will not be made by the English court against a foreign person or entity. An IP could also consider other avenues for cross border enforcement of a s 236 order via sub-ss 426(4) and (5) IA where the courts have discretion to assist requests between the English court and the courts of other parts of the UK or other "relevant countries".

Section 236 is undergoing active judicial consideration. The High Court has produced conflicting judgments as to the extra-territoriality of s 236 and the area requires review by the Court of Appeal. As recently as 13 October 2015, the High Court permitted a s 236 application to be served outside of the jurisdiction in Official Receiver v Sahaviriya Steel Industries Public Co Ltd [2015] EWHC 2877 (Ch). The judge in this case noted the unresolved status of the question of the extra-territoriality of s 236. He said (at para 12, emphasis added):

"the extraterritorial effect of [s. 236] ... is much less straightforward because there are two conflicting High Court decisions concerning that issue ... I am satisfied that it is appropriate to give permission for the application under s. 236 to be served out of the jurisdiction [though not] without notice."

One is left with the distinct impression that the case law as it stands is unsatisfactory. Whether or not s 236 can be said to be fully extra-territorial and, if not , how far partial extra-territoriality extends, needs to be looked at in detail by the Court of Appeal – particularly if the powerful tool that is s 236 is not to lose a great deal of its utility. Moreover, the distinction between s 133 and s 236 looks increasingly out-dated in the modern financial world where, more often than not, commercial and, particularly, finance entities have deliberately set up multi-jurisdictional structures.

This article was first published in Butterworths Journal of International Banking and Financial Law.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.