Resolving the Ms Fashions 'Paradox'

8 Pages Posted: 21 May 2004

See all articles by Riz Mokal

Riz Mokal

South Square; University College London - Faculty of Laws; University of Aberdeen - School of Law

Date Written: December 1998

Abstract

In the context of the decision of the House of Lords in Re Bank of Credit and Commerce International S.A. (No. 8) [1998] AC 214, this short paper asks (i) whether the existence of a charge in one's favour over one's own indebtedness (a 'charge-back') destroys the mutuality necessary for insolvency set-off to operate, and (ii) whether the assets of the insolvent company are notionally collected before the set-off may operate. Both questions are answered in the negative. The paper concludes by suggesting that the reasons given by the courts in justifying the very existence of insolvency set-off also argue in favour of allowing it to operate in the appropriate case, even if there is a charge-back.

Suggested Citation

Mokal, Riz, Resolving the Ms Fashions 'Paradox' (December 1998). Available at SSRN: https://ssrn.com/abstract=548643 or http://dx.doi.org/10.2139/ssrn.548643

Riz Mokal (Contact Author)

South Square ( email )

3-4 South Square
Gray's Inn
London, WC1R 5HP
United Kingdom

HOME PAGE: http://southsquare.com/barristers/riz-mokal/

University College London - Faculty of Laws

Bentham House
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London, WC1E OEG
United Kingdom

HOME PAGE: http://www.ucl.ac.uk/laws/

University of Aberdeen - School of Law ( email )

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King's College
Aberdeen, Scotland AB24 3UB
United Kingdom

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