Isle of Man: Is Insolvency Different?

Last Updated: 18 March 2014
Article by Kevin O'Loughlin

This article considers the tension between the Privy Council decision in Cambridge Gas and the Supreme Court decision in Rubin both concerning the limits of the common law jurisdiction to assist foreign courts in insolvency proceedings.


The Isle of Man courts are internationalist in outlook. This is inevitable given the global nature of commercial activity that operates in and through the Island, and the movement of individuals to and from the Island. The Isle of Man courts endeavour to assist the courts of foreign friendly nations, provided the Isle of Man court has jurisdiction to do so. This article concerns assistance in relation to foreign corporate insolvency proceedings, and considers the limits of that assistance in the light of the Cambridge Gas1 and Rubin2 cases. In the former the Privy Council (as the final Manx appeal court) appeared to widen the scope for such assistance; however the Supreme Court in Rubin disagreed. The Isle of Man courts will need to decide in future cases whether to continue on the wide path mapped by the Privy Council, or narrow the effect of that decision and follow the Supreme Court.


The Isle of Man courts have a statutory jurisdiction to assist courts having bankruptcy jurisdiction in certain countries3, however this only applies to personal (not corporate) insolvencies. In re Impex Services Worldwide Limited 4 the Isle of Man High Court decided that at common law the court should recognise the appointment by foreign courts of insolvency officers in corporate insolvencies, that with such recognition comes a wide

and discretionary common law jurisdiction to assist other courts in relation to insolvency matters, though in exercising such discretion the Isle of Man court would in particular have regard to the rules of private international law.

This jurisdiction is linked to the general principle, endorsed by the Isle of Man courts, that bankruptcy (whether personal or corporate) should be unitary and universal; there should be a unitary bankruptcy proceeding in the court of the bankrupt's domicile which receives worldwide recognition and it should apply universally to all the bankrupt's assets5. A corollary of this principle is that the court with jurisdiction over the bankruptcy should be assisted by courts in other jurisdictions.

There are, however, well established rules of private international law in both the Isle of Man and England relating to the enforceability (or otherwise) of foreign judgments. A foreign judgment can be in personam or in rem and different enforceability rules apply to each; the question in the Cambridge Gas and Rubin cases is the extent to which these rules inhibit the domestic court from assisting the foreign insolvency court by enforcing judgments or orders made by the latter.

Cambridge Gas

Cambridge Gas concerned an Isle of Man company Navigator Holdings plc ("Navigator") which had filed for relief under Chapter 11 of the United States Bankruptcy Code in New York, thereby submitting to the jurisdiction of that court. Cambridge Gas Transport Corporation ("CGTC") was a company incorporated in the Cayman Islands and was the majority shareholder in Navigator but had not submitted to the jurisdiction of the New York court. The New York court confirmed a Chapter 11 plan which essentially involved the assets of Navigator being taken over by the creditors. The mechanism which the plan used to vest the assets in the creditors was to vest the shares in Navigator (which were worthless) in the creditors' representatives. The committee of creditors petitioned the Isle of Man High Court for an order vesting the Navigator shares in their representative. CGTC opposed this on the grounds that it had never submitted to the jurisdiction of the New York court and therefore on the basis of established private international law rules the order of that court was not enforceable against it in the Isle of Man.

The Privy Council decided that if bankruptcy proceedings fell into either category of judgments in rem or in personam, CGTC would have succeeded. However it decided that bankruptcy proceedings fell into neither category but existed to provide a collective mechanism of execution against the debtor's assets. It considered that the principle of universality underlay the common law principles of judicial assistance in international insolvency, and those principles were sufficient to confer jurisdiction on the Manx court to assist, by doing whatever it could have done in the case of a domestic insolvency.

The decision appeared to indicate that insolvency proceedings were different, and the normal private international law enforceability rules did not apply. However, six years later, in Rubin, the Supreme Court was to have its say.


Rubin concerned The Consumers Trust ("TCT") established in the UK by Eurofinance SA a BVI company. Eurofinance SA was the beneficiary in default under TCT and as such received payments from TCT. TCT became insolvent; its receivers caused it to apply to the US Bankruptcy Court for relief under Chapter 11; the receivers then obtained default judgment in the US Bankruptcy Court against Eurofinance SA for about US$10min relation to the avoidance of amounts paid by TCT to Eurofinance SA within one year prior to the commencement of the TCT bankruptcy.The receivers sought to enforce the default judgment at common law in England. Eurofinance SA opposed enforcement on the principle of private international law that a foreign judgment in personam is only enforceable in England if the judgment debtor was present in the foreign country when the proceedings were commenced or if the judgment debtor submitted or had agreed to submit to the jurisdiction (the "Dicey Rule").

The Court of Appeal decided on the basis of the decision of the Privy Council in Cambridge Gas that the Dicey Rule did not apply to foreign judgments in bankruptcy avoidance proceedings and that the judgment was enforceable in England. The Supreme Court disagreed. Lord Collins giving the majority judgment considered Cambridge Gas at length. He said the question was whether as a matter of policy, the court should, in the interests of universality of insolvency proceedings, devise a rule for the recognition and enforcement of judgments in foreign insolvency proceedings which is more expansive, and more favourable to liquidators and other office-holders, than the traditional common law rule embodied in the Diceyrule, or should it be left to legislation. He noted that prior to Cambridge Gas there had been no suggestion that there might be a different rule for judgments in personam in insolvency proceedings and other proceedings. He considered that to develop the law in this way would not be an incremental development of existing principles but a radical departure from substantially settled lawwhich had all the hallmarks of legislation; and that this should be a matter for the legislature and not for judicial innovation. It followed he said that Cambridge Gas had been wrongly decided.


The question, therefore, arises as to the limits, after Rubin, of the jurisdiction of the Isle of Man courts to assist in foreign insolvencies. In re Impex the High Court recognised that in deciding whether to provide assistance the court would in particular have regard to the rules of private international law. This is similar to the reference to the application of rules of private international law in section 426(5) of the UK Insolvency Act 1986, referred to by Lord Collins as difficult and obscure. The question is to what extent the rules of private international law will limit the assistance the court can give. In Cambridge Gas the Privy Council decided that judgments in bankruptcy proceedings fell into neither category of judgments in rem or in personam, and therefore the usual rules of private international law relating to their enforceability at common law did not apply. The Supreme Court decided that this was wrong, that judgments in bankruptcy proceedings are not sui generis, that the usual rules of private international law apply, and that the common law jurisdiction to assist foreign bankruptcy courts did not include enforcing judgements which are not enforceable under the applicable rules of private international law. There is therefore a real tension between Isle of Man and English law, a situation which does not often arise.

The Isle of Man courts up to the Privy Council are bound by the decision in Cambridge Gas and must therefore follow it. Courts in other common law jurisdictions (apart from England) will have a choice which to follow. Even in the Isle of Man, however, it remains unclear how Cambridge Gas will be applied. In a narrow sense Cambridge Gas could be regarded as only deciding that since the shares in Navigator were worthless CGTC had no interest of any value to protect and that registration of the shares in Navigator's creditors' name was no more than a mechanism for giving creditors access to Navigator's assets6, which the US court had jurisdiction to do. However, the Isle of Man courts have referred to Isle of Man law developing independently in accordance with the needs, requirements and interests of the inhabitants of the Isle of Man and the international community7. It would be open to them to apply Cambridge Gas in its widest sense, and give full rein to the Privy Council's view that bankruptcy proceedings fall into neither category of in rem or in personam and that insolvency is indeed different.


1. Cambridge Gas Transport Corporation v. Official Committee of Unsecured Creditors (of Navigator Holdings plc) unreported judgment October 14 2004 (High Court); 2003-05 MLR 459 (Staff of Government Division); 2005-06 MLR 297 (Privy Council). Simcocks acted for Cambridge Gas Transport Corporation in this case.

2. Rubin v Eurofinance SA; New Cap v A E Grant and others [2012] UKSC 46

3. Bankruptcy Act 1988. The countries are the United Kingdom, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Leichtenstein, Luxembourg, Malaysia, Netherlands, Norway, Portugal, South Africa, Spain and Sweden.

4. 2003-05 MLR 115.

5. For example, Interdevelco v Waste2Energy judgment of October 10 2012.

6. A view expressed by Lord Mance at paragraphs 186 and 187 of the Rubin judgement. Lord Mance at paragraph 26 of the opinion of the Privy Council (again on appeal from the Isle of Man courts) in Pattni v Ali 2005-06 MLR 586 (in which Simcocks acted) had previously seemed inclined to this view.

7. For example, Howell v DHSS judgment of October 6 2009.

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.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions