Demba Diop v GLT Infrastructure Limited 2019 SCJ 298
Facts
On the 3rd of August 2018, Mr. D lodged a petition for G Ltd to be wound up. It was based on the premise that G Ltd was indebted to Mr. D in the amount of USD 131,267.37 representing unpaid salaries under an agreement. Mr. D further averred that the above sum was liquidated, due and demandable in as much as G Ltd was unable to pay its debts and therefore it was just and equitable that it be wound up.
Conversely, G Ltd claimed that it has a valid counterclaim in the sum of USD 380,800.72 against Mr. D for having fraudulently misappropriated funds belonging to G Ltd. It flowed therefrom that the sum was disputed and not liquidated. Further, G Ltd put forward that the Court did not have jurisdiction since there was an exclusive jurisdiction clause in the agreement.
Henceforth, the Court had to decide whether Mr. D’s claim was liquidated, due and demandable and therefrom the issue of insolvency which follows from an inability to pay such debt in the ordinary course of business, warranting the winding up order.
Held
The Court stated that it was incumbent upon Mr. D to establish G Ltd’s liability for the debt, if any, before any winding up order can be envisaged. Any such order can only be made after a competent court has found that Mr. D’s debt was liquidated, due and demandable and that G Ltd was unable to pay such a debt in the ordinary course of business.
On the affidavit evidence, the Court held that the evidence fell short of establishing the initial precondition that Mr. D was a creditor of G Ltd and that his alleged debt was liquidated, due and demandable in order for a winding up order to be envisaged under sections 102 and 104 of Insolvency Act.
Therefore, Mr. D failed to establish his claim so as a winding up order may be issued against G Ltd. The petition was accordingly set aside.
Case commentary
The Court stated that the applicability of the exclusive jurisdiction clause should be regarded in context. In the present matter, the Court was only confronted with a winding up petition within the purview of the Insolvency Act. Thus, the issue of the competent court would eventually arise in connection with the determination of the liability, if any, of G Ltd as may be claimed by Mr. D.
Reference
Insolvency law – winding up petition – debt – liquidated – due – demandable
