Irish Court recognises Northern Irish Individual Voluntary Arrangement

The Irish High Court confirmed it can recognise and enforce Northern Irish Individual Voluntary Arrangements post-Brexit. Applying a test of procedural equivalence and legitimate purpose, the Court extended recognition principles to personal insolvency. This decision provides greater certainty for creditors and debtors dealing with cross border insolvency between Ireland and the UK.

What you need to know

• It is well established that the Irish Courts have an inherent jurisdiction to recognise non-European Union insolvency proceedings[1]. This decision now confirms that the Irish Court can recognise Northern Irish law-governed Individual Voluntary Arrangements (IVA).
• Recognition depends on a two-fold test: equivalence of procedures and a legitimate purpose for the Court's assistance.
• This judgment offers helpful guidance for practitioners to rely on in seeking the Irish Court’s assistance with non-European Union personal insolvency proceedings post-Brexit.

Since the UK's departure from the European Union, the automatic recognition of UK insolvency proceedings under the Recast Insolvency Regulation[2] has ceased. This development has created legal hurdles for debtors and insolvency practitioners seeking to enforce UK proceedings against assets or creditors located in Ireland.

In the recent decision of Mr Justice Oisín Quinn in the Gallogly case[2], a Northern Irish Insolvency Practitioner sought the recognition and enforcement of a Northern Irish IVA in the Republic of Ireland. An 'IVA' is a UK statutory debt resolution mechanism capable of binding creditors to its terms. It is in some respects comparable to an Irish Personal Insolvency Arrangement. The primary creditor affected in this case was Bank of Ireland. The bank required an Irish court order to:

• Accept the dividend payable to it under the IVA, and
• Write off the debtor’s debt

The two-fold test: equivalence and legitimate purpose

The Irish High Court noted that there is an established body of case law regarding the recognition of foreign corporate insolvency proceedings from jurisdictions outside the EU. However, those principles had not yet been extended to personal insolvency.

Following an examination of the principles in Re Mount Capital Funds[3] and Re Mercer Agencies[4], the Court was satisfied that it had an inherent jurisdiction to recognise a foreign personal insolvency arrangement. The Court applied a two-fold test to determine if recognition should be granted:

1. Equivalence: The Court must be satisfied that the foreign insolvency procedure is sufficiently similar to a process available under Irish law. The Court concluded that the Northern Irish IVA, as a formal, court-registered process, met this threshold.
2. Legitimate purpose: Crucially, the application for recognition must be made for a purpose consistent with the statutory duties of the officeholder and the underlying objectives of the insolvency regime.

The Court found that the application was for a "legitimate purpose". Recognising the IVA, the Court identified the following relevant factors:

• The IVA complied with Northern Irish law
• The insolvency procedures were properly followed
• The IVA did not go against any public policy in Ireland or any of the principles that would apply in the Irish-equivalent personal insolvency regime
• There was no unfairness to creditors
• The IVA was final and not provisional, and
• Creditors were notified correctly

The Court granted Bank of Ireland, as creditor, liberty to apply to the Court should the need arise.

Conclusion

This decision is a welcome development. It reinforces the Irish Court’s willingness to recognise and enforce foreign non-EU insolvency proceedings. In addition, it makes it clear that the principles previously applied to corporate insolvency also apply in the realm of personal insolvency.

For more information and expert advice on cross border restructuring and insolvency matters, please contact a member of our Restructuring & Insolvency team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

People also ask

[1] See Re Mount Capital Fund Limited (In Liquidation) and Another [2012] IEHC 97 and Re Mercer Agencies Ltd. (In Administration) [2025] IEHC 261

[2] EU 2015/848

[3] Raymond Hugh Gallogly -v- Recognition of Cross Border Insolvency Proceedings [2025] IEHC 766

[4] Re Mount Capital Fund Limited (In Liquidation) and Another [2012] IEHC 97

[5] Re Mercer Agencies Ltd. (In Administration) [2025] IEHC 261