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UK Commercial Court Confirms Reach of English Clawback Claims in Cross-Border Award Enforcement
August 19, 2026
A recent decision of the English Commercial Court highlights the willingness of English courts to deploy domestic insolvency tools in support of cross-border judgment and arbitral award enforcement efforts. In SOCAR v Palmali Group, the court permitted claims to proceed against parties accused of carrying out foreign restructurings designed to place assets beyond the reach of creditors seeking to enforce London-seated arbitration awards.
The claimants alleged that a series of restructurings in Turkey and Malta were undertaken to frustrate enforcement of arbitration awards worth approximately US$240 million. While the court dismissed claims based on the so-called Marex tort, it held that claims under Section 423 of the Insolvency Act 1986 and unlawful means conspiracy disclosed a serious issue to be tried and could proceed in England.
Importantly, the court rejected arguments that England was not the appropriate forum despite the challenged transactions occurring overseas. It emphasized that the dispute centered on London-seated arbitral awards arising from English law-governed contracts, finding that these connections outweighed the foreign elements of the restructurings.
The decision reinforces the ability of creditors to pursue English clawback remedies in cases involving allegedly award-evasive restructurings conducted abroad and demonstrates the court's willingness to scrutinize transactions that predate a judgment or award when other causes of action, including Section 423 claims, are available. It also highlights the potential reach of English conspiracy claims, which can expose third parties who allegedly assist a debtor in putting assets beyond creditors' reach to liability alongside the debtor itself. At the same time, the judgment clarifies an important limitation on the Marex tort, holding that it does not extend to conduct occurring before a judgment or arbitral award exists.
Kobre & Kim's team regularly represents creditors, insolvency practitioners and other stakeholders pursuing assets across jurisdictions and navigating the intersection of insolvency, arbitration and judgment enforcement.