Invest Bank PSC v El-Husseini [2022] EWHC 894 (Comm)

Court: High Court (Andrew Baker J)

Facts: Invest Bank PSC sought to enforce judgments against El-Husseini, alleging he used companies under his control to transfer assets to evade creditors. The bank sought to reverse these transactions under section 423 of the Insolvency Act 1986.

Issue: Can transactions by a company controlled by an individual be deemed personal transactions under section 423 of the Insolvency Act 1986?

Held: Andrew Baker J held that asset transfers by a company cannot be automatically attributed to its controlling individual under section 423. The court emphasized that for section 423 to apply, the claimant must demonstrate that the individual acted personally to defraud creditors, not just through the company.

Key Judicial Statement: Andrew Baker J identified the "self-dealing fallacy," clarifying that merely controlling a company does not equate to personal liability for the company’s transactions.

💡 Leveluplaw: The separation between a company and its controlling individual is upheld unless there is clear evidence that the individual acted personally to defraud creditors.