ISE’s decision on Bloxham still holds

The Irish Stock Exchange’s decision revoking Bloxham stockbrokers’ membership of the exchange cannot be quashed via judicial review proceedings, the Commercial Court has ruled.

The liquidator has also brought a separate plenary challenge to that decision.

Had its membership of the Irish Stock Exchange (ISE) not been revoked, Bloxham could be entitled to significant funds arising from proposals to transfer the business of the ISE to a new company with the distribution of accumulated reserves to existing members.

That project, known as Project Chrysalis, has not yet been implemented but the ISE accumulated reserves stood at some €27m in 2011.

The liquidator sought judicial review after Bloxham’s membership of the ISE was revoked last December on grounds Bloxham had not been trading for some six months. The Central Bank had in May 2012 directed the firm to suspend its trading activities after it was revealed it was undercapitalised and the firm petitioned to be wound up.

As a preliminary issue in the judicial review proceedings, the ISE asked the Commercial Court to rule its decision could not be quashed by judicial review.

The exchange argued its decision did not have the public law attributes required for judicial review.

It was argued the power exercised by ISE in revoking Bloxham’s membership was a purely private contractual power embodied in the ISE’s own rules which Bloxham undertook to abide by when accepting membership of the private limited company that was the ISE.

Yesterday, Mr Justice John Cooke said the revocation decision was one that put an end to the contractual relationship created when Bloxham became a subscribing guarantor of the private limited company, the ISE.

The judge also said the “real purpose” of the proceedings by the liquidator was concerned with Bloxham’s membership of the private limited company that was the ISE.

It was clear the firm, having been wound up, has no prospect of, or interest in, resuming any trading activity, he said. What was really sought to be achieved was to preserve its corporate status as a guarantor member of the ISE. The firm’s membership of the private limited ISE company was distinct from its trading membership of the exchange.

The objective sought to be pursued by the liquidator was in the realm of private law and not a claim on the part of an undertaking whose rights have been affected by an exercise of powers of public authority, he ruled. The disputed decision of the ISE was “based exclusively” on the private contractual relationship between it and Bloxham.


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