A Petition by RBG Resources Plc ((in Liquidation)) v RBG Global SA

• Jurisdiction: British Virgin Islands
• Judge: d'Auvergne J
• Judgment Date: 13 February 2003
• Neutral Citation: VG 2003 HC 4
• Docket Number: SUIT NO. 152/2002
• Court: High Court (British Virgin Islands)
• Date: 13 February 2003

IN THE HIGH COURT OF JUSTICE

SUIT NO. 152/2002

IN THE MATTER OF THE COMPANIES ACT CAP 285

AND

IN THE MATTER OF INTERNATIONAL BUSINESS COMPANIES ACT CAP 291

AND

In the Matter of a Petition by RBG Resources plc (In Liquidation)

Petitioner/Applicant

and

In the Matter of RBG Global S.A

Respondent

Appearances:

Mr. Paul Webster with Miss Nicole Mc David and Miss Hilary Reid for RBG Resources

Mr. Gerard St.C Farara Q.C with Mrs. Lorna Shelly-Williams for RGB Global S.A

d'Auvergne J

1 On the 29 ^th day of July, 2002, the Applicant, RBG RESOURCES p.l.c (in Liquidation) hereinafter referred to as RBG, a public Company limited by shares incorporated under the laws of England and Wales with its registered office in London England applied to the Court for an ex parte order that Malcolm Shierson and Andrew Bickerton be appointed Provisional Liquidators of RBG Global S.A., hereinafter referred to as Global, a Company incorporated in the British Virgin Islands under the International Business Companies Act Cap 291 with its registered office in Road Town, Tortola, British Virgin Islands.

2 The grounds upon which the application was sought were that since the appointment of official Liquidators, hereinafter referred to as Liquidators in the persons of Malcolm Shierson and Kevin Mawer for the compulsory winding up of RBG, the Liquidators commenced investigations and discovered evidence indicating that Global is indebted to RBG in the sum of approximately one hundred and twenty one thousand, seven hundred and seventy three United States dollars and sixty five cents (US$121,773.65) as at May 03, 2002, which sum remained outstanding.

3 It was further submitted that the Liquidators have cause to believe that Global is a part of a major international fraud perpetrated against RBG and third party financial institutions throughout the world and that there had been a deliberate destruction and concealment of documents at RBG's London offices and that the Liquidators believed that such activity had been and will continue to be carried out in respect of Global as well.

4 Counsel for RBG told the Court that the Liquidators believed that there was a serious risk that Global's assets would be disposed of or dissipated by the directors and management of Global if they had not yet been already dissipated and that RBG's records may be destroyed in order to frustrate the attempts by the Liquidator to gain a proper understanding of the fraud and to recover RBG's assets. That in order to investigate the fraud and the destination of the dissipated assets, there was an urgent need to investigate Global, its directors and its management and to take control of any remaining assets and or documentation.

5 The application was supported by the affidavit of Malcolm Shierson, sworn on the 29 ^th July, 2002, who reiterated the facts in the application. At the hearing, an undertaking as to damages was given by Counsel on behalf of RBG. The draft order tendered (to be noted later) was granted and an inter partes hearing was set for the 17 ^th of September, 2002.

6 The order appointing the Liquidators was granted on the 30 ^th of July and entered on the 31 ^st of July, 2002.

7 On the 31 ^st July, 2002, RBG amended its winding up petition filed on the 29 ^th of July 2002 and also filed a Notice of Application to continue the order appointing the provisional Liquidators.

8 On the 20 ^th August, 2002, the Respondent, Global filed an affidavit and four (4) exhibits by Pradeep Sancheti in support of an application to set aside the Liquidators and on the following day, namely 21 ^st August, 2002, filed the said application.

9 On the 16 ^th September, 2002, RBG filed the second affidavit of Malcolm Shierson in response to Mr. Sancheti's affidavit (Re: application to set aside the Liquidators). Mr. Sancheti then filed his second and third affidavits on the 16 ^th and 19 ^th September respectively.

10 I pause here to note, verbatim, the order granted by the Court appointing the Provisional Liquidators since Learned Counsel, on behalf of Global, argued most vociferously that those powers granted were much too wide and contrary to law. That they were wider than the powers set out in Section 129 of the Companies Act Chapter 285 of the British Virgin Islands. A perusal of Section 129 will show that this is indeed so.

11 The order reads as follows:

1

The powers of the Provisional Liquidators be limited and restricted to the following acts, that is to say: (a) to do everything necessary to identify, locate, take possession and/or preserve all assets of the Company, including but not limited to books, records and other papers; (b) to do all things reasonably necessary to preserve the value of the Company's business (if possible) pending the determination of the Petition herein; (c) to act singly on behalf of both of them and exercise all powers conferred upon provisional liquidators and liquidators under the Companies Act, Cap 285; (c) without limiting the generality of the foregoing: (i) to take control of all sums of money had and received by (ii) to cooperate and coordinate the winding up proceedings before this Court and any other jurisdiction in which the Company is being wound up; (iii) to identify the nature and location of all property and assets which appear to belong to the Company; (iv) to get in or otherwise secure all such property and assets; (v) to identify the creditors of the Company and the amounts of their claims; (vi) to investigate the promotion, formation, business, dealings and affairs of the Company; (vii) to investigate whether the Company or a liquidator of the Company may have any claims (either in this jurisdiction or elsewhere) against any officer or employee or former officer or employee of the Company, or against any other person or persons; (viii) to bring or defend any action or other legal proceedings in the name and on behalf of the Company; (ix) to commence and/or pursue any such claims, if the Provisional Liquidators are advised that that is necessary or desirable in order to protect the ability of the Company or any liquidator of the Company to pursue any such claims or otherwise to preserve the value of any such claims; and (x) to take possession and control of, collect in, give valid receipts for and protect any money, property, books, papers or other movable or immovable property of every nature and kind in the British Virgin Islands or elsewhere to which the Company is or appears to be entitled; (xi) to require any trustee, receiver, banker, agent or officer of the Company to pay, deliver, convey, surrender, or transfer forthwith any money, property, or books and papers in his hands to which the Company is prima facie entitled; (xii) to carry on the business or businesses of the Company so far as may be necessary for the beneficial winding up of the Company; (xiii) to transfer, assign or sell all or any of the assets of the Company without being responsible for any loss or damage occasioned thereby or arising therefrom; (xiv) to exercise all rights which the Company may have in relation to any company, joint venture, investment, subsidiary, associated companies, business or other entity in which the Company is the ultimate beneficial owner of such part of its issued share capital or registered capital as would enable the Company to obtain control or management of any such entity; (xv) to exercise all rights which the Company may have in relation to any company, joint venture, investment, subsidiary, associated companies, business or other entity in which the Company holds any interest; (xvi) to assume the Company's right in and o the extent that the Company would have been entitled to do so, to take control of any company, joint venture, investment, subsidiary, associated company, business or other entity; (xvii) to exercise voting rights in respect of any shares held by the Company; (xviii) to employ and dismiss any employees of the Company, and employees and directors of its wholly-owned subsidiary companies, and any of their wholly-owned subsidiary companies; (xix) to take possession of share certificates for any shares or other interests held by the Company; (xx) to make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging themselves to have any claim, of whatsoever nature without limit in point of time against the Company, whereby the Company may be rendered liable; (xxi) to compromise claims, of whatsoever nature and without limit in point of time, between the Company and any other person, company or entity; (xxii) to prove, rank and claim in the bankruptcy, liquidation or other insolvency procedure or any person, company or entity for any balance against his or its estate, and to receive dividends in the bankruptcy, liquidation or other insolvency procedure in respect of that balance, as a separate debt due from the bankrupt or insolvent company, and ratably with the other creditors; (xxiii) to represent and act for the Company in all such matters, to vote and take part in the election of trustees or liquidators, the making of any composition or scheme, and any other matters in connection therewith; (xxiv) to adjudicate and to admit to proof all claims of every...