Judgment Hand Down: Shetty v NMC Healthcare [2024] ADGMCA 0001

Upholding the decision of the first instance judge, the Court of Appeal has held that the jurisdiction to impose liability for fraudulent trading applied in relation to conduct which took place prior the NMC companies being continued into the ADGM (i.e. reincorporated into the ADGM).  The Court of Appeal also held that there was no temporal limitation on the fraudulent trading jurisdiction so that it was capable of applying to conduct which took place before the legislation in question was introduced.

In conclusions which are likely to have wider significance, the Court of Appeal also held that a claim could be brought under the fraudulent trading provisions absent a connection between the defendant in question and the jurisdiction.  Having analysed the relevant English authorities including Paramount Airways and Howard Holdings, the Court of Appeal held that the question of a sufficient connection went to discretion to grant relief, not to jurisdiction, and in any case might be capable of being satisfied by matters other than a connection between the defendant in question and the jurisdiction.  The Court of Appeal held that this requirement was capable of being satisfied where the defendants in question had lodged a proof of debt in the insolvency proceeding.

Tom Smith KC and Adam Al-Attar KC appeared for the NMC Companies, and Georgina Peters appeared for Bank of Baroda.

Read the judgment here.