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The High Court (Mr Justice Michael Green) has allowed the Financial Conduct Authority’s appeal on an important point of statutory construction.

Section 130(2) of the Insolvency Act 1986 imposes a statutory stay on any “action or proceeding” against a company in compulsory liquidation. The High Court has ruled that the FCA’s enforcement action against Carillion plc (in liquidation) does not amount to an “action or proceeding” under s.130(2) and therefore is not subject to the statutory stay. In reaching this conclusion, the Court surveyed the legislative framework for stays in the context of liquidation and administration (as variously enacted and amended over the last two centuries) and accepted the FCA’s submissions as to the distinctive text and purposes of the liquidation stay. 

Javan Herberg QC and Ajay Ratan acted for the FCA.

The judgment is available here.

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