Farfetch liquidators' request for oral examination denied by English court

Quick read

The Joint Official Liquidators (JOLs) of Farfetch Limited (in liquidation), a Cayman company, applied to the English court for an order that former senior management provide information to assist them in their investigation into potential mismanagement of the company before its insolvency.

Opposition

Mr Neves, a former director and Group CEO of Farfetch, argued that he was outside the jurisdiction of the English court as he now resides in Brazil.

The other management agreed to provide written responses to requests but argued that:

Oral testimony was unnecessary and oppressive.
The JOLs should agree to confidentiality restrictions due to a suspicion that the information would be shared with loan note creditors on the liquidation committee.

Decision

The Court held that:

It was premature to order an oral examination when the JOLs had not yet seen the management's written evidence and before providing them with any documentary evidence that they acquire.
While Cayman law imposes a confidentiality obligation on JOLS, the liquidation committee should acknowledge these obligations when receiving information.
Mr Neves' jurisdictional issue needed further examination and this part of the application should be adjourned.

Key takeaways

This judgment acts as a warning to insolvency office-holders to carefully consider the timing of an application for oral examination. The courts are alive to the dangers of oppression in requiring a person suspected of wrongdoing to submit to an oral examination before proceedings have been brought against them and will aim to strike a balance between the reasonable requirements of an office-holder and the risk of oppression.