Validation Orders Under Section 284 Insolvency Act

The Court has recently upheld a refusal to validate payments to fund connected litigation where there was no evidence of a corresponding benefit to the bankruptcy proceedings.

An individual, subject to a bankruptcy petition he was contesting, failed to appeal the refusal of a validation order to cover funding connected proceedings in India.

The respondent banks had presented a petition based on a judgment obtained in India and registered in England.  There were ongoing proceedings between the parties in India and the applicant already had one validation order covering his reasonable living expenses, as well as both the past and future costs of his bankruptcy petition.  He sought a further validation order to cover the past and future costs of the Indian litigation as well which he said, if successful, would provide him with a defence to the petition.