High Court finds Isle of Man was the appropriate forum for winding-up proceedings against the company
Winding up petition proceedings brought in England and Wales against an Isle of Man company have been dismissed after the High Court found it was unreasonable for the petitioner to pursue the case in England rather than seek relief in the Isle of Man.
Mr Philip Rainey KC, sitting as a Deputy Judge of the Chancery Division, dismissed the petition brought by APL Holdco Limited against Apple Properties Limited in a judgment handed down on 1 September 2026.
Apple Properties, incorporated in the Isle of Man in 1995, owns a portfolio of 11 London properties. APL Holdco sought its winding up as an unregistered company on just and equitable grounds under section 221(5)(c) of the Insolvency Act 1986.
The dispute involved brothers Habib Bush and Shafe Buksh, who each ultimately had an interest in one of the company’s two shares. Lake Limited held its share on trust for Shafe, while Holdco held the other share for Habib.
The court found that the company was a quasi-partnership and that there had been a complete breakdown in trust and confidence between Shafe and Habib. It also found that the company was functionally deadlocked.
However, the judge concluded that Habib was the sole cause of both the breakdown in trust and confidence and the functional deadlock.
The court relied on findings already made by the High Court of the Isle of Man, where Deemster Gough had found in May 2024 that Shafe’s share was held through Lake and that Shafe was a director. The Isle of Man proceedings had also resulted in injunctions requiring information about the company’s affairs to be provided to Shafe.
Mr Rainey KC found that key financial information had still not been provided. This included a full account of rents received and letting and management expenses, together with documents establishing the company’s financial position.
The judge accepted that Shafe’s refusal to engage without that information was justified. He found that Habib was the sole cause of the functional deadlock, including through the failure to provide information required by Shafe.
The judgment also considered whether Holdco had unreasonably failed to pursue alternative remedies.
Although the company had a sufficient connection with England and Wales, including its London property portfolio and the English domicile of its ultimate beneficial owners, the judge held that this did not make it appropriate for the English court to exercise its jurisdiction.
The court placed particular weight on the fact that there had already been extensive litigation between the parties in the Isle of Man. That litigation had produced findings about the conduct in dispute and orders affecting the company’s governance.
Mr Rainey KC described the English petition as a fairly obvious instance of “forum shopping” and found that it was not reasonable conduct. He concluded that, if Holdco wished to pursue a just and equitable winding-up petition as a contributory, it should have done so in the Isle of Man.
The court also found that Habib did not have clean hands. Among the matters considered were the dissipation of company funds, payments of about £128,000 to Century 22 Property Management Limited, and the use of company money to pay Habib and Omar’s legal fees in defending the Isle of Man proceedings.
The judgment recorded that the company had held about £456,000 in its bank account at one stage, but that only a little over £1,000 remained by the time Shafe was able to assert his rights as a director and ask the bank to block payments.
The court concluded that these matters were directly connected to the equitable relief sought and weighed against making a winding-up order.
It also considered the potential consequences of liquidation for disclosure and other proceedings. A winding-up order could have affected the ability to enforce the Isle of Man injunctions and could have prejudiced potential claims that could only be brought in the Isle of Man.
Applying the three-stage analysis in Lau v Chu, the court concluded that Holdco would otherwise have been prima facie entitled to some relief because of the breakdown and deadlock. However, it found that granting relief would be unjust and inequitable because Habib was the sole cause of the situation, lacked clean hands and had pursued the petition in the wrong forum. The petition was therefore dismissed.