Re Esken Ltd [2026] EWHC 495 (Ch): the English High Court clarifies that a foreign entity operating in the UK can move from administration to CVL under Schedule B1 to the Insolvency Act 1986.
Background
Esken Limited (the "Company") was incorporated in Guernsey but carried on its main operations in infrastructure, aviation and energy, in England. On 21 March 2024, its directors appointed administrators in England under paragraph 22 of Schedule B1 to the Insolvency Act 1986 ("Schedule B1"), relying on the fact that the Company's COMI was in England. The appointed administrators subsequently realised almost all of the Company’s assets and concluded that the appropriate exit from administration was conversion into creditors voluntary liquidation (CVL), in part to enable the disclaimer of a leasehold interest with potential environmental liabilities.
On 17 March 2025, the administrators filed a notice under paragraph 83 of Schedule B1 to move the company from administration to CVL. The notice was registered on 21 March 2025.
When liquidators were appointed, they applied under rule 21.4 of the Insolvency (England and Wales) Rules 2016 (“IR 2016”) for an order confirming the CVL for the purposes of the retained EU Insolvency Regulation.
Issue
Section 221(4) of the Insolvency Act 1986 ("IA 1986") provides that "No unregistered company shall be wound up under this Act voluntarily, except in accordance with the European Union Regulation." In view of this provision, the court was required to opine on whether:
- the Company could move from administration to CVL in circumstances where it was incorporated outside of the UK;
- an overseas-registered company, whose COMI is in England, may validly move from administration to CVL under paragraph 83 of Schedule B1 in circumstances where s.221(4) of IA 1986 restricts voluntary winding up of unregistered (thus foreign) companies except in accordance with the EU Regulation; and
- the notice registered on 21 March 2025 commenced a valid CVL and whether the Court should issue the confirmation/certificate sought by the liquidator under rule 21.4 of the IR 2016.
Court's views
The court was satisfied to provide a certificate confirming the Company had validly entered into CVL. In arriving at her decision, ICC Judge Burton considered the following:
- The definition of a company under paragraph 111(1)(A)(c) of Schedule B1 as including a company, which is not incorporated in an EEA state, but has its COMI in a member state or in the UK. The court was satisfied with the evidence of one of the Joint Liquidators that the Company's main operations were in England, that it conducted the administration of its interests on a regular basis in England and that this was known to its key creditors and ascertainable by third parties. On this basis, paragraph 83 of Schedule B1 expressly permits a company of that description to move from administration to CVL.
Paragraph 111(1)(A)(c): Definition of "company" includes "a company not incorporated in an EEA State but having its centre of main interests in a member State (other than Denmark) or in the United Kingdom."
- The court held that there is no need for the route into administration to be reconciled with the provisions of section 221(4) of IA 1986. There is no provision for the winding up of an unregistered company as a means of exiting administration. The provisions of Part V of the IA 1986 do not overlap, interact with or duplicate the provisions of Schedule B1 (which is incorporated by section 8 into Part II of the Act). Part V simply does not apply when an entity (such as the Company) with its registered office overseas but its COMI in England moves from administration to voluntary liquidation.
- For the reasons set out above, and applying the statutory definition of "company" in paragraph 111 to paragraph 83 of Schedule B1, ICC Judge Burton concluded that the Company validly entered into CVL on 21 March 2025 when the notice filed by its former administrators was registered by the Registrar of Companies.
Commentary
ICC Judge Burton's judgment clarifies the apparently conflicting provisions between section 221(4) and Schedule B1 in respect of overseas entities with COMI in the UK, which will be welcomed by administrators appointed to such entities. Moving from administration to CVL (where appropriate) is a relatively swift and cost effective process. A point to note would be that ICC Judge Burton did not opine on how the Retained EU Regulation interacts with section 221(4) in other circumstances, so the scope of this decision is limited to entities which have been in a preceding administration only.
Part V of the IA 1986 pertains to "Winding Up of Unregistered Companies".
