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On 16 June 2011, the Supreme Court of Mauritius, acting through
its jurisdiction of Judge in Chambers, delivered an Interlocutory
Judgment on the appointment of an administrator under the
Insolvency Act 2009. This recent piece of
legislation has replaced existing legislation, and now governs
matters touching on insolvency and winding-up in Mauritius.
In Alridge v. Mordaunt Estates Ltd 2011 SCJ
186, a shareholder challenged both a decision taken by the board of
directors of a Mauritian company to place the company into
voluntary administration and the appointment of an
administrator.
The shareholder applied to the Judge in Chambers for an Interim
Writ of Injunction:
to prohibit forthwith the administrator from continuing to act
as administrator of the Mauritian company; and
to prohibit the Mauritian company from passing any resolution
that would appoint any administrator. The Judge sitting in Chambers
declined to grant the injunction as he took the view that the
applicant shareholder had failed to establish a prima
facie case for the prayers that he sought.
From a legal perspective, even though this is a Judgment given
in Chambers and remains open to challenge, it is noteworthy as this
is the first decision of the Supreme Court, through its
jurisdiction of the Judge in Chambers, regarding the appointment of
administrators under the Insolvency Act 2009. This
Judgment provides a precedent as to the approach that the Supreme
Court is likely to adopt in the future in similar matters.
The interesting points to note are:
as a matter of law, a shareholder has the sufficient
locus to challenge the appointment of an administrator.
Accordingly, there is not need for the shareholder to invoke any of
the provisions of the Insolvency Act 2009 in order
to justify his application;
under the Insolvency Act 2009, the decision of
the company to be placed in voluntary administration means the
decision of the board of directors of that company not the decision
of the shareholders of the company. If it was the intention of the
legislator that the aforesaid decision should be one of the
shareholders, then this would have been provided for expressly in
the Insolvency Act 2009. The Judge found support
for this approach in the terms of section 105(1)(e) of the
Companies Act 2001 that provides that
"notwithstanding the constitution of the company, where
the shareholders exercise a power to put the company into
liquidation, the power shall be exercised by special
resolution". He also relied on the terms of Section 162
of the Companies Act 2001 that casts a positive
duty on any director of a company who takes the view that the
company is unable to pay its debts as they fall due to call a
meeting of the board of directors forthwith, failing which a
director faces the risk of being personally liable for failing to
discharge this duty. Insofar as the Insolvency Act
2009 was concerned, the Judge observed that it was silent
on the question and took the view that it had to be the decision of
the board;
once the board of directors of a company has resolved to place
the company into voluntary administration, the board is perfectly
entitled to appoint a sub-committee, thereby delegating to that
sub-committee the power to appoint an administrator. This is in
line with the terms of Section 131 of the Companies Act
2001.
Appleby appeared for the Co-Respondent No. 3, another Mauritian
company, and moved that the Co- Respondent No. 3 be put out of
cause in view of the absence of any prayer against it in its
application and were successful.
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