ArcelorMittal Holdings AG v Liberty House Group Pte Ltd

Facts

Liberty House Group Pte Ltd was the ultimate holding company of a steel group within the Gupta Family Group Alliance (GFG), ultimately owned and controlled by Mr Sanjeev Gupta. Its difficulties followed the collapse of Greensill, a key funder, in March 2021, and it guaranteed debts being restructured elsewhere in the GFG. ArcelorMittal Holdings AG obtained arbitral awards against it totalling more than €240m, which went unpaid. ArcelorMittal had the first award recognised, obtained a freezing order and an execution order over the company's shares in two subsidiaries, and on 8 October 2024 applied in HC/OA 1041/2024 to place the company in judicial management. On 17 January 2025 the company applied in HC/OA 49/2025 for a moratorium under s 64(1) of the Insolvency, Restructuring and Dissolution Act 2018, which automatically stayed the first application.

The company was indisputably insolvent. Its proposed scheme would pay all unsecured creditors a cash sum, first given as US$42.5m and later as US$30m, against liabilities of about US$4.2b, funded by GFG entities. After the first proposed funder was placed in special administration in Australia on 19 February 2025, Mr Gupta said the money would come from Tahmoor Coal Pty Ltd, an Australian coal mining company owned by LPMA, through a new loan or a sale of shares.

Issues

1. Whether the company showed a scheme with a reasonable prospect of working, including credible funding, to justify a moratorium
2. Whether the company's lack of candour undermined the bona fides of its moratorium application
3. Whether a judicial management order would likely achieve a better result than liquidation

Holding

The High Court dismissed the company's moratorium application with costs and allowed ArcelorMittal's application, ordering that the company be placed under judicial management with Mr Cameron Lindsay Duncan and Mr David Dong-Won Kim appointed as judicial managers jointly and severally.

Reasoning

On the moratorium, the court applies a broad assessment of whether there is a plan with a reasonable prospect of working and being acceptable to creditors, and it was premature to examine the scheme's mechanics. But where a scheme depends entirely on outside funding, that funding deserves closer scrutiny, and the applicant should show the source with reasonable specificity. The company had about US$59,088 in cash. The loan term sheet was not produced, the loan was unsigned, the conditions for the second tranche were undisclosed, and the lender's consent to divert funds had not been sought; Tahmoor's own projections suggested diverting US$30m would leave it with no cash. The share sale was vague and had not started, and LPMA's audited accounts carried a going concern qualification and it faced contingent guarantee claims. The scheme sum was cut without explanation and stayed subject to further revision.

On candour, the company owed full and frank disclosure. It did not disclose the first funder's financial troubles or the halt of the coal operations, and gave no basis for the scheme figure, which mattered because Mr Gupta was both debtor and would-be rescuer. The court gave little or no weight to its assertions and noted that it acted only once judicial management was sought.

On judicial management, inability to pay was undisputed, and the comparison was with liquidation. Judicial managers could keep the company going, find the value of the seized shares instead of a sheriff's auction, and obtain information on the wider restructuring. The feared destabilisation of the group was unsubstantiated and would be worse in liquidation, and as court officers the managers would act for all creditors, not ArcelorMittal alone.

From the judgment