Cross-border insolvency has become a defining feature of modern commercial practice. As assets move more freely across borders, liquidators and creditors increasingly find that funds have been diverted offshore – often deliberately – and regularly through corporate structures specifically designed to frustrate recovery. This article examines the powerful set of tools available under English law and explains why English courts remain one of the most effective forums from which to mount a cross-border asset recovery.
Engaging English courts: the cross-border framework
English courts engage with cross-border insolvencies through three main mechanisms. First, section 426(4) of the Insolvency Act 1986 provides a bilateral statutory assistance mechanism between English insolvency courts and courts in designated countries, including Australia, Canada, Hong Kong and the Cayman Islands, among others. Under section 426(5), the English court may apply either English insolvency law or the insolvency law of the requesting jurisdiction, and may make orders including injunctions and declarations to support foreign proceedings.
Second, the Cross-Border Insolvency Regulations 2006 (CBIR), which implement the UNCITRAL Model Law, provide a wider recognition route with no requirement for reciprocity, enabling foreign insolvency proceedings from a broad range of jurisdictions to be formally recognised in England and giving overseas officeholders standing to apply for English court assistance.
Third, at common law, English courts can recognise and assist foreign insolvency proceedings under the principles of modified universalism and comity. As the Supreme Court confirmed in Rubin v Eurofinance SA; New Cap Reinsurance Corp v Grant [2012], courts will aim under comity to assist foreign officeholders as far as possible, subject to the limits of established UK law.
Where the debtor is itself incorporated abroad, section 221 of the Insolvency Act 1986 provides a further route. English courts have jurisdiction to wind up any ‘unregistered company’ (a term that includes foreign companies not registered under the Companies Act 2006), provided there is a sufficient connection with England. A winding-up order brings the full suite of English insolvency tools, including examination of directors and third parties and pursuit of claw-back claims – even against entities incorporated in jurisdictions with weaker insolvency regimes. Also, providing there is sufficient nexus to the UK, the jurisdiction extends under section 225 to companies that have already been dissolved or ceased to exist in their home jurisdiction.
Challenges of cross-border recovery
The first challenge in any cross-border insolvency is a practical one: tracing where assets have gone and through whose hands they have passed. Different jurisdictions apply different insolvency laws, priority rules and procedural requirements. Assets can be placed behind layers of offshore vehicles deliberately designed to defeat enforcement and the risk of further dissipation is acute.
Preserving assets quickly: freezing orders and disclosure
Where there is reason to believe that assets have been or may be moved in anticipation of insolvency, the English courts have well-established powers to act quickly. A worldwide freezing injunction can be obtained, often without notice, preserving a defendant’s assets across multiple jurisdictions pending judgment and preventing further dissipation.
The courts can make disclosure orders compelling the identification of hidden asset structures internationally, including Norwich Pharmacal orders and Bankers Trust orders, for use in UK proceedings.
Section 423: recovery outside formal insolvency
Perhaps the most powerful recovery tool is section 423 of the Insolvency Act 1986, which allows the court to set aside transactions entered into at an undervalue where a purpose of the debtor was to put assets beyond the reach of creditors. Importantly, it operates independently of formal insolvency proceedings and under section 424(1)(c), individual victims can apply directly, without the need for a winding-up or bankruptcy order. This makes section 423 available to a wider class of claimant than most comparable foreign provisions.
In Orexim Trading Ltd v Mahavir Port and Terminal Private Ltd [2008], the Court of Appeal confirmed that section 423 allows proceedings against persons outside England and Wales, provided that there is a sufficient connection with this jurisdiction – therefore enabling victims to challenge offshore transfers from an English base.
The court has wide discretion to restore the position entirely, including ordering the direct transfer of property to the victim. In National Iranian Oil Company v Crescent Gas Corporation Ltd [2025], property was ordered to be transferred directly to a creditor after the court found the transfer had been made for the purpose of putting it beyond reach.
Limitation: a growing advantage
Recent case law has also made section 423 claims more attractive from a limitation perspective. The Limitation Act 1980 contains two potentially applicable provisions. Section 8(1) imposes a 12-year period on ‘an action upon a specialty’, while section 9(1) imposes a six-year period on ‘an action to recover any sum recoverable by virtue of any enactment’.
In Riley v Aidiniantz [2025], Master Bowles held that section 423 carries a 12-year limitation period as a claim on a ‘specialty’ under section 8(1), running from when the claimant became a victim of the transaction. In THG plc v Zedra Trust Company (Jersey) Ltd [2026], the Supreme Court then suggested (obiter) that section 9 applies only to claims for ascertained statutory debts and not to claims under statutory provisions conferring a wide discretion as to remedy – specifically identifying sections 423(2) and 425(1) of the Insolvency Act 1986 as conferring precisely that kind of discretion.
The section 8 position was not expressly determined in THG, and Riley’s 12-year analysis under section 8(1), therefore, remains the most recent direct authority on that point. However, the Supreme Court’s reasoning – that section 8 requires enforcement of an obligation created by deed or statute – creates some tension with Riley, potentially pointing towards the conclusion that no fixed statutory limitation period applies at all.
The practical consequence is significant either way. If section 8(1) applies, victims have at least 12 years; if neither section 8 nor 9 applies, there is no statutory time bar and delay goes only to the court’s discretion. In multi-jurisdictional insolvency cases where relevant transactions may have occurred many years before formal proceedings began, the extended lookback period is another key advantage.
Restoring dissolved companies
This limitation advantage could be particularly potent when read alongside sections 1029–1031 of the Companies Act 2006, which empower English courts to restore a dissolved company to the register. The threshold is broad: the court may order restoration wherever it considers it just to do so. On restoration, the company is treated as if it had never been dissolved – all claims against it revive – and the court has power under section 1032(3) to direct that the period of dissolution does not count for limitation purposes, effectively winding back the limitation clock. Applications must generally be made within six years of dissolution under section 1030(4). Many jurisdictions provide far narrower restoration windows by comparison. This accessible regime gives creditors another route against entities deliberately dissolved to obstruct recovery.
Conclusion
English law offers creditors and victims in cross-border insolvency cases a broad and flexible toolkit. The combination of early protective measures (worldwide freezing injunctions and disclosure orders obtainable at short notice) with powerful substantive recovery tools under section 423, company restoration under the Companies Act 2006, and an increasingly favourable limitation position, means that English proceedings can capture assets and transactions going back many years across multiple jurisdictions. The three-pillar cooperation framework – section 426, CBIR, and the common law – further extends the reach across designated and model law jurisdictions alike.
As assets and corporate structures become ever more international, the question for practitioners is not simply whether a claim exists but where it can most effectively be brought. For creditors and victims with a connection to England and Wales, the English courts will often be the answer.
Natalie Todd is a partner and William Rowell an associate at Cooke, Young & Keidan, London
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