Importers Service Corporation v Aliotta: court refuses permission to appeal over share transfers

The Business List of the Chancery Division has handed down a detailed consequentials judgement following its earlier ruling on a claim under section 423 of the Insolvency Act 1986, addressing costs, permission to appeal and the practical effect of the first defendant's bankruptcy on proceedings that had already reached trial.

The judgement, delivered by Mr Simon Gleeson on 29 July 2026, follows a substantive judgement handed down in March concerning attempts by Importers Service Corporation and ISC Europe Limited to reverse transfers of shares made by Aliotta Holdings Limited, ancillary to a wider claim against Mr Mario Aliotta for secret profits. The court had found that a series of 2025 share transfers involving Mr Aliotta, his wife Mrs Collins Macleod Aliotta, and the fourth to sixth defendants formed a single economic transaction rather than a transfer at an undervalue, while separately finding that board minutes relied on to justify the transactions had been fabricated pursuant to what the earlier judgement described as a collusive agreement.

A preliminary complication arose from Mr Aliotta's undisclosed bankruptcy, triggered by an HMRC petition filed shortly before the original trial and formalised shortly afterwards. Mr Gleeson held that the automatic stay under section 285(3) of the Insolvency Act did not prevent Mr Aliotta continuing to conduct the litigation, since the section 423 order operated against third-party recipients of the shares rather than against his own property. However, the judge found that Mr Aliotta had no standing to make submissions on costs, since any award would inure to his bankrupt estate, and separately declined to permit him to represent the second defendant, a company of which he remained sole director, given the restrictions imposed on undischarged bankrupts acting as company directors.

On costs, the court rejected arguments that the claimants' partial failure on one of two challenged transactions should reduce their recovery, characterising that failure as of no real substance once the fabrication of evidence was taken into account. The fourth to sixth defendants, despite having been described in the substantive judgement as having been "swindled" by Mr Aliotta over the original share allocation, were held jointly and severally liable for costs alongside him, on the basis that they had actively defended the impugned transactions rather than adopting a neutral position. Mrs Aliotta, by contrast, was found to bear no costs liability given the limited and largely passive nature of her involvement.

Indemnity costs were ordered against Mr Aliotta, his company, and the fourth to sixth defendants, the judge finding that sustained efforts to conceal the fabrication of the board minutes took the conduct well outside the norm of ordinary litigation. The court also ordered interest on costs from the date they were incurred and paid, and directed a payment on account of £608,755.64, applying a reduced percentage to costs falling outside the approved budget to reflect the uncertainty inherent in a later detailed assessment.

Both the claimants, advancing nine grounds concerning the treatment of the transactions as a single economic transfer and the tracing of funds through a joint account, and Mr Aliotta, on three grounds relating to intent and the exclusion of late evidence, were refused permission to appeal. The court granted the claimants an extension until 10 August 2026 to file an appellant's notice, and confirmed that interim restrictions on dealing with the disputed shares remain in force pending a final order.