Australian court refuses to stay Greensill administrators’ PPSA claim despite parallel English challenge

An Australian court has refused an application brought by members of Sanjeev Gupta’s GFG Alliance to stay Australian proceedings brought by the administrators of Greensill Capital (UK) Ltd, despite the fact that Greensill’s English administration has been recognised in Australia under the Model Law. The ruling is the latest in a saga of cross-border disputes calling into question the appropriate forum to determine issues in the aftermath of Greensill’s collapse.

The dispute concerns a February 2021 debenture governed by English law and a March 2021 specific security deed governed by Queensland law, under which Greensill took security over shares in Australian companies. After Greensill’s entry into administration, its administrators asserted the enforceability of the security, including attachment and perfection under Australia’s Personal Property Securities Act 2009 (Cth).

Liberty entities responded by launching proceedings in England seeking rescission and declarations that the security documents were invalid, alleging misrepresentation by Lex Greensill and reliance on conditional assurances that the securities would not be registered or enforced. They then sought a permanent declinature of jurisdiction in Australia or a temporary stay pending the outcome of English proceedings.

The Supreme Court of New South Wales dismissed the application, emphasising that the English proceedings are currently subject to the statutory moratorium under paragraph 43(6) of Schedule B1 to the Insolvency Act 1986, meaning they cannot proceed against Greensill without permission of the English court. That permission application will not be heard until late April 2026.

The Court also rejected Liberty’s contention that Australia was a “clearly inappropriate forum”. While acknowledging English connections, including the governing law of the debenture and the alleged location of certain representations, the court emphasised that the Australian proceedings seek relief under the Australian PPSA in respect of security granted by an Australian company over shares in Australian companies. Those statutory issues are not raised in the English claim and would not be resolved there unless Liberty succeeded entirely on its avoidance case.

The Court also declined to grant a temporary stay, holding that the English proceedings cannot presently advance and may never proceed if permission is refused. Even if they do, they would not determine PPSA enforceability questions.

Liberty’s submissions that key witnesses and documents were located in England were found to be speculative. The alleged misrepresentation case, as currently framed, turns primarily on oral exchanges between Mr Gupta and Mr Greensill. The Court noted that Mr Gupta is an Australian resident and director of numerous Australian companies, and that there was no concrete evidence that other UK-based witnesses would be necessary.

Significantly, the Court observed that Greensill’s English administration has been recognised in Australia under the Model Law, but found that recognition does not mandate deference where Australian statutory property rights are in issue. Comity considerations did not outweigh the strong local connection to PPSA-registered security over Australian collateral.

The Court concluded that it would not be oppressive or vexatious for an Australian court to determine claims against an Australian company concerning Australian shares under Australian legislation, particularly where the English proceedings are stayed and cannot resolve all issues. The interlocutory process was dismissed with costs.

Read the decision here.

D Sulan SC, J Anderson and D Monteith (instructed by by A & O Sherman) represented Greensill Capital (UK) Ltd (in admininstration), while S J Maiden KC/S Aspinall (instructed by Norton Rose Fulbright Australia) represented Liberty entities.