Polly Peck International Plc, Re (Nos. 1, 2, 3, 4, 5)

JurisdictionEngland & Wales
Judgment Date07 May 1998
Date07 May 1998
CourtCourt of Appeal (Civil Division)

Court of Appeal

Before Lord Justice Nourse, Lord Justice Potter and Lord Justice Mummery

In re Polly Peck International plc (No 4)

Insolvency - remedial constructive trust could not be imposed on assets

Remedial constructive trust cannot be imposed on assets

Proceedings against an insolvent company based on allegations of wrongful occupation of property in the Turkish-occupied part of Cyprus did not disclose any seriously arguable case on the merits and leave to commence the action in accordance with section 11(3) of the Insolvency Act 1986 was not to be granted.

There was no prospect of the court imposing on the assets of the insolvent company, in administration in England, a "remedial constructive trust" so as to give applicants a proprietary interest.

The Court of Appeal so held in a reserved judgment allowing an appeal by the administrators of Polly Peck International plc, Mr R A Stone, Mr M A Jordan, Mr C Morris, Mr C J Barlow, and by Polly Peck International plc and Mr Ian Bond from the judgment of Mr Justice Rattee (The Times December 27, 1996; [1997] 2 BCLC 630) whereby he had granted the applicants, Marangos Hotel Co Ltd, Phasos Estates Ltd, Agricultural Products Co-operative Marketing Union (Sedigep) Ltd and Cyprus Ports Authority, leave to commence proceedings.

Mr Michael Crystal, QC, Mr William Trower and Mr Philippe Sands for the administrators; Miss Barbara Dohmann, QC, Mr Lawrence Collins, QC, solicitor, and Mr Thomas Beazley for the applicants.

LORD JUSTICE MUMMERY said that the applicants wished to commence proceedings against Polly Peck International plc, a holding company that

had been controlled by Mr Asil Nadir, a Turkish Cypriot, but which was massively insolvent and had been in administration since 1990.

PPI's administrators had refused to consent to the commencement of proceedings, contending that the draft statement of claim failed to disclose a seriously arguable case justiciable in the English courts.

It was common ground that leave to proceed should only be granted by the court under section 11(3) if it was satisfied that the claim disclosed a seriously arguable case on the merits as well as on the jurisdiction.

The proposed claims arose out of alleged wrongful occupation of the applicants' property in the Turkish-occupied part of Cyprus. It had not been disputed that the property had been expropriated.

The applicants contended that the property had been occupied and exploited without their authority by...

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48 cases
  • Algosaibi Bros v Saad Invs
    • Cayman Islands
    • Grand Court (Cayman Islands)
    • 22 February 2013
    ...[2008] EWHC 2613 (Comm), applied. (29) Philipps v. PhilippsELR(1878), 4 Q.B.D. 127, referred to. (30) Polly Peck Intl.PLC, No.2, Re, [1998] 3 All E.R. 812; [1998] 2 BCLC 185, distinguished. (31) Powell v. Thompson, [1991] 1 N.Z.L.R. 579, referred to. (32) Practice Direction (C.A.: Leave to ......
  • Safe Business Solutions Ltd ((in Liquidation)) v Malcolm Cohen and Another
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    • Chancery Division
    • 13 January 2017
    ...the one before the court today. The last observation regarding a seriously arguable case comes from the decision in Re Polly Peck International Plc (in Administration) (no 5) [1998] 3 All ER 812. In that case the Court of Appeal found that a claim based on a remedial constructive trust was ......
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    • House of Lords
    • 31 July 2003
    ... ... As Vinelott J observed in Re Polly Peck International plc [1994] BCC 15 , 16A-B, the ... ' House in In re British & Commonwealth Holdings plc (Nos 1 & 2) [1993] AC 426 ... It will be rare for any ... ...
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9 books & journal articles
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    • United Kingdom
    • Wildy Simmonds & Hill Law of Insolvent Partnerships and Limited Liability Partnerships Contents
    • 29 August 2015
    ...hand in Re Carter Commercial Developments Ltd [2002] BCC 803. 215 See e.g. Re Polly Peck International Plc (In Administration) (No 5) [1998] 3 All ER 812; Joinery Plus Ltd v Laing Ltd [2003] EWHC 3513 (TCC), [2003] BPIR 890 (a claim for repayment); and AES Barry Ltd v TXU Europe Energy Trad......
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    • Wildy Simmonds & Hill Law of Insolvent Partnerships and Limited Liability Partnerships Contents
    • 29 August 2015
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    ...(2013). (165) SeeFHR Eur. Ventures LLP v. Cedar Cap. Partners LLC [2014] UKSC 45, [43]; In re Polly Peck Int'l pic (No. 2) v. Stone [1998] 3 All ER 812 (AC) at 827; In reGoldcorp Exch. Ltd. [1994] 2 All ER 806 (PC) at 828; F[sigma]rtex Grp Ltd v Macintosh [1998] 3 NZLR 171 (CA) at 178-79 (N......
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    • Singapore Academy of Law Journal No. 2016, December 2016
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