In the matter of New Cap Reinsurance Corporation Limited (in liquidation) (subject to a Scheme of Arrangement)

The case before the court involved New Cap Reinsurance Corporation Limited, a company in liquidation, and the Scheme of Arrangement governing its liquidation. The central issue was whether a claim submitted by a creditor was non-compliant with the Scheme's requirements, and if such non-compliance constituted a procedural irregularity that would render the claim invalid. The Scheme Administrator had the task of determining the validity of the claim in question.

The court had to decide whether the non-compliance of the creditor's claim with the Scheme's requirements amounted to a procedural irregularity. This required an examination of the Scheme's provisions and whether they were mandatory or directory in nature. Additionally, the court needed to determine if the Scheme Administrator had the authority to treat the non-compliant claim as invalid and what the consequences of such a decision would be for the creditor.

The court found that the non-compliance of the creditor's claim with the Scheme's requirements did constitute a procedural irregularity. The Scheme's provisions were considered mandatory, and thus, any deviation from them was not permissible. The court also held that the Scheme Administrator had the authority to treat the non-compliant claim as invalid. The decision was based on the understanding that the Scheme Administrator's role was to ensure that the Scheme was properly implemented and that any claims submitted under it adhered to its requirements.

The final orders of the court confirmed that the creditor's non-compliant claim was invalid and that the Scheme Administrator's decision to treat it as such was justified. The court emphasised the importance of adhering to the Scheme's requirements and the consequences for any party that fails to do so. This decision reinforces the principle that Schemes of Arrangement must be followed strictly to ensure fairness and consistency in the liquidation process.