Ackers v Saad Investments Company Ltd (in official liquidation)

The case of Ackers v Saad Investments Company Ltd (in official liquidation) involved the recognition of a foreign proceeding under the Model Law for the purposes of cross-border insolvency. Saad Investments, a Cayman Islands-incorporated company, was in the process of liquidation, and the court was asked to determine whether the proceedings in the Grand Court of the Cayman Islands should be recognised as a foreign main proceeding. This recognition would impact the jurisdiction's ability to stay individual actions and proceedings concerning the debtor’s assets, rights, obligations, and liabilities, as well as to suspend the right to transfer, encumber, or dispose of the debtor’s assets.

The primary legal issues before the court involved the interpretation of Article 16(3) of the Model Law, which provides a presumption that the debtor's centre of main interests (COMI) is located in the jurisdiction where the debtor has its registered office. The court had to decide whether this presumption applied to Saad Investments and, if not, whether sufficient evidence had been provided to displace the presumption. Additionally, the court needed to determine whether the liquidators should be recognised as foreign representatives and if protective measures under Article 21 of the Model Law should be granted.

The court found that the presumption in Article 16(3) applied to Saad Investments, as the company's registered office was in the Cayman Islands. Despite the complexity of Saad Investments' transnational dealings, the court concluded that there was insufficient evidence to displace the presumption that the company's COMI was in the Cayman Islands. The court recognised the importance of a predictable and orderly international outcome in cross-border insolvencies and thus followed the approach of Eurofood and Stanford Bank, which supported a more definitive application of the presumption. Consequently, the court granted the recognition of the Cayman Islands proceeding as a foreign main proceeding and recognised the liquidators as foreign representatives. Orders were also made to protect the debtor’s assets within Australia, granting the liquidators similar powers to those of a domestic liquidator.