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and appointed three liquidators. From that decision an appeal was taken to the First Divisional Court of the Supreme Court of China, which on 30th May dismissed the appeal. That decision is final.
The present application is based on three grounds:- (1) That there has been a winding up order made by a Court of competent jurisdiction in the country in which the company was incorporated, and, as result of that winding-up, the corporate powers of the Company have been destroyed in the country of its origin.
(ii) That the company has in fact ceased to carry on business in the Colony; and
(iii) That it is just and equitable that the company should be wound up. The substratum of the company has gone. It is a shipping company and cannot carry on a legitimate business because of the risk of seizure of their vessels by enemy forces. The only avenues of business open to the Company are either illegal trading with the enemy or work extraneous to the true objects of, the company such as the chartering of their vessels for use as hulks within this harbour.
On the first of these grounds Mr. Potter relies on the case of In re The Russian Bank for Foreign Trade (1933) 1 Chancery 745. In that case the Russian revolutionary legislation of 1917 and the following years had put an end to the juristic existence of banking companies incorporated in Russia, and it was held that the impossibility of a branch of such a Russian Bank continuing to function according to its incorporating statutes was a sufficient ground for a winding-up order. In delivering judgment Maugham J. (as he then was) said "The decrees as regards banks whose seats and principal offices were taken over by the state, must be regarded as so crippling the powers of the companies that, if not extinct, they could no longer exhibit any of the signs of life. At the best the bank, as a legal corporation, deprived as it was of its assets and its corporators, became no more than a legal conception. Its branches in England, if an old metaphor may be employed, is now a submerged wreck floating on the ocean of commerce. As a branch of the original bank it appears, however, to have or to have had creditors in this country, and if the petition before me is properly presented I am of opinion both that the bank has ceased legally to carry on business, and that it is just and equitable that it should be wound up. The essential features of the case are, indeed, of a simple character. A corporation created and established under a foreign legal system has been allowed by our laws to carry on business and to incur debts in this country. Its coporate powers, if not its corporate existence, have been destroyed in its country of origin. It cannot be doubted that in such circumstances the Court, if it has jurisdiction, ought to make an order which will secure as far as possible the payment of all just claims against the corporation. An order was made for the compulsory winding-up of the company.
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In his speech in the case of the Lazard Bros & Co. V. Midland Bank (1933) A.C. 289 at 297 Lord Wright says "English Courts have long since recognised as juristic persons corporations established by foreign law in virtue of the fact of their creation and continuance under and by that law. *Such recognition is said to be by the comity of nations. Thus is Henriques V. Dutch West India Co.((1728) 2 Lord Raymond 1532, 1535) the Dutch company were permitted to sue in the King's Bench on evidence being given "of the proper instruments whereby by the law of Holland they were effectually created a corporation there". But as the creation depends on the act of
/the