Judge finds creditor pursued a high-risk strategy by threatening a petition over a substantially disputed debt
Winding Up Costs are at the heart of a High Court ruling that awarded indemnity costs after Newsweek Publishing LLC threatened a winding-up petition based on debts the court found were disputed on substantial grounds.
In NW Publishing UK Ltd v Newsweek Publishing LLC [2026] EWHC 1882 (Ch), ICC Judge Agnello KC ruled on the costs consequences of an injunction application rather than the underlying debt dispute. The judgment followed the respondent’s decision to provide a permanent undertaking not to present a winding-up petition, leaving costs as the only issue for determination.
The applicant, NW Publishing UK Ltd, obtained a without notice injunction in August 2025 restraining the respondent from presenting a winding-up petition based on a statutory demand served the previous month. After the injunction was granted, Newsweek Publishing LLC gave an undertaking not to present a petition and later sought to discharge the injunction, arguing that it should never have been granted and that the applicant had failed in its duty of full and frank disclosure.
The court rejected those arguments.
For solicitors, the judgment reinforces an established but important principle. A creditor considering insolvency proceedings bears significant risk where a debt is genuinely disputed on substantial grounds. The court confirmed that presenting, or threatening to present, a winding-up petition in those circumstances may amount to an abuse of process, with serious costs consequences.
The statutory demand included two elements: a claim relating to a rent deposit and a separate claim arising from a settlement payment made by the respondent under a lease guarantee. Although the applicant had paid the settlement amount to the landlord before seeking the injunction, it continued to dispute liability for the rent deposit.
The respondent argued that the injunction application had been unnecessary because it would have provided an undertaking had it been given more time to respond. It also alleged that the applicant had failed to make full and frank disclosure when applying without notice.
The judge disagreed, finding that the correspondence before the application showed the respondent had consistently rejected the applicant’s assertion that the debts were disputed and had repeatedly refused to provide the permanent undertaking sought.
ICC Judge Agnello KC held that the respondent’s refusal to acknowledge the dispute, combined with its limited and time-restricted assurances that no petition would be presented, exposed the applicant to a genuine risk of insolvency proceedings. In those circumstances, the applicant was entitled to seek urgent injunctive relief.
The court also rejected every allegation of material non-disclosure. It found that the applicant had fairly presented the case at the without notice hearing and that the matters relied upon by the respondent would not have influenced the decision to grant the injunction. The judge said the respondent’s criticisms largely reflected disagreements over legal analysis rather than any failure to disclose material facts.
The judgment also distinguishes between legal arguments that may ultimately determine liability and the narrower question facing the court on an injunction application: whether the debt is disputed on substantial grounds. The judge concluded that the applicant’s presentation was fair in all material respects.
Having rejected the respondent’s submissions, the court held that the usual costs rule should apply. More significantly, it ordered costs on the indemnity basis.
ICC Judge Agnello KC concluded that it is an abuse of process to present a winding-up petition in respect of a debt known to be disputed and that the respondent had knowingly pursued a high-risk strategy despite being aware of the dispute. The applicant was therefore entitled to recover its costs on the indemnity basis, and its refusal to accept an earlier proposal that each party bear their own costs was not unreasonable.
The decision provides a clear reminder to insolvency practitioners and commercial litigators that creditors must carefully assess whether a debt is genuinely disputed before relying on the winding-up process. Where a substantial dispute exists, the court may not only restrain a petition but also impose indemnity costs on the creditor.