Re Baku Consolidated Oilfields Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 02 July 1993 |
| Date | 02 July 1993 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Chadwick
Company - defunct company - allocation of foreign compensation - collectors of share certificates
Collectors of share certificates of defunct companies could not benefit financially when foreign compensation was belatedly paid for the seizure of the companies' assets.
The correct approach in directing distribution of surplus assets in the winding-up of a company was to treat as members all those who would be entitled to have their names placed on the register. It was unnecessary to insist on the formality of applications to rectify the register.
Mr Justice Chadwick so held in the Chancery Division, on an application under section 112 of the Insolvency Act 1986, by the liquidator of Baku Consolidated Oilfields Ltd for directions as to the manner in which a fund of £3,026,056 received by him in 1990 from the Foreign Compensation Commission should be distributed.
Miss Catherine Roberts for the liquidator.
MR JUSTICE CHADWICK said that Baku had been incorporated under the Companies Acts 1908 to 1917 for the purpose of acquiring and exploiting oil concessions in Azerbaijan but had never commenced trading.
In 1920 the Soviet government had seized its assets and a claim at that time for compensation had borne no fruit. In 1929 it was ordered to be wound up, the creditors were paid out of available assets and a modest distribution was made to the contributories.
In 1986, however, agreement had been reached with the Soviet government for the payment of those claims and the secretary of state had appointed a fresh liquidator under the provisions of the Insolvency Act 1986.
Prima facie, the members of a company were those whose names were entered in its register, see, now, sections 22 and 361 of the Companies Act 1985, but the register was not conclusive, see Reese River Silver Mining Co v SmithELR ((1869) LR 4 HL 64, 77, 80), and the court could order rectification of the register as well after as before winding-up.
His Lordship would accordingly direct:
1 The liquidator to distribute their appropriate entitlements to the fund to (a) such registered members as had been traced, and (b) the executors and administrators, under an English grant of probate...
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