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United Kingdom

Insolvency and Companies Court strikes out disputed winding‑up petition: triable cross‑claim and complex accounts require Part 7 proceedings (Advanced Security Alarm Protection Ltd v UK Protection Ltd)

Published on: 28 January 2025

Published by a LexisNexis Restructuring & Insolvency expert
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Article summary

Advanced Security Alarm Protection Ltd v UK Protection Ltd (transcript) [2024] EWHC 3111 (Ch)

What are the practical implications of this case?

This decision underscores the evidential onus on any party presenting a winding‑up petition where the asserted debt is in dispute. It is a clear warning that the insolvency regime is not a shortcut where there is a live controversy about liability.

  • Overlooking a genuine dispute, and failing to address it properly, risks the petition being struck out and the petitioner facing adverse costs consequences.
  • Where the dispute underlying the petition has a real prospect of success, the correct course is to pursue recovery through civil litigation in the ordinary courts rather than via insolvency processes.
  • Petitioners should assess and evidence the nature of the dispute before turning to the insolvency jurisdiction.
  • Advisers to prospective petitioners have a pivotal role in testing the merits and ensuring petitions are not issued prematurely.

What was the background?

The petition was brought by UK Protection Ltd (UKP), which sought to wind up Advanced Security Alarm Protection Ltd (ASAP). ASAP responded by applying to strike out the petition against it.

Factual background

UKP had been engaged to undertake specified activities and to make certain payments on ASAP’s behalf...

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