Lloyd's Maritime and Commercial Law Quarterly
OF DEBTORS AND PROPERTY
Anthony Kennedy*
Helen Morton†
El-Husseiny v Invest Bank
Introduction
Two questions may be asked regarding the correct interpretation of s.423 of the Insolvency Act 1986 (“IA 1986”), concerning transactions defrauding creditors. Most importantly for present purposes: does s.423 apply to a transaction whereby a debtor agrees to procure a company which he owns to transfer a valuable asset for no consideration or at an undervalue, thereby reducing the value of his shares in the company to the prejudice of his creditors; or does it not, because the debtor does not personally own the asset (“the beneficial interest question”)? Second, where an asset transferred at an undervalue is held by a company, and an individual by whom it acts in respect of the transfer does so by virtue of his sole ownership or control of the company, is there, without more, a transaction entered into by the individual, either with his company or the transferee or both (“the capacity question”)? While the Court of Appeal1 asked and answered both questions, the Supreme Court in El-Husseiny and Another v Invest Bank PSC,2 as it had been asked to do, considered just the beneficial interest question. It is regrettable that the Justices were not asked to answer the capacity question too.
The respondent bank had obtained judgments in Abu Dhabi against Mr El-Husseini, a Lebanese businessman, for sums which converted approximately to £20 million.3 In 2021, the bank sought to enforce those judgments against various assets of Mr El-Husseini in England, which assets included properties in central London or companies owning such properties, which, as the bank argued, ought to be made available for this purpose.
The bank alleged that Mr El-Husseini had arranged for these assets to be transferred to other people in order to put them beyond its reach and its judgment debt or to reduce the value of the companies which owned them.4 To take a representative example,5 a company, the shares in which Mr El-Husseini beneficially owned, itself legally and beneficially owned a property in central London worth about £4.5 million. Mr El-Husseini caused the
* Lecturer in Commercial Dispute Resolution at BPP Law School; Barrister.
† Barrister, Essex Court Chambers.
1. Invest Bank PSC v El-Husseini [2023] EWCA Civ 555; [2024] KB 49 (hereafter, “El-Husseini CA”).
2. [2025] UKSC 4; [2025] 2 WLR 320 (hereafter, “El-Husseiny”).
3. El-Husseiny, [2].
4. Ibid, [3].
5. Ibid, [5], sets out the facts of the representative example.
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