Introduction

In Re Mirror Trading International (Pty) Ltd (in liquidation) [2026] EWHC 1286 (Ch), the High Court (Leech J) refused to strike out claims brought in England by South African joint liquidators seeking to recover bitcoin transferred as part of an alleged Ponzi scheme. The claims advanced by letters of request and orders made under section 426 formed part of a large-scale and co-ordinated cross-border recovery exercise following the collapse of Mirror Trading International (“MTI”), a cryptocurrency investment platform.

The application raised three issues of significance:

• • whether the claims were time-barred under South African prescription law and when the liquidators acquired the necessary “knowledge” of potential defendants and should therefore be struck out;
  • how section 426 operates where foreign insolvency claims (and limitation rules) are pursued in English proceedings; and
  • whether alleged deficiencies in the conduct of the liquidators justified strike out as an abuse of process.

Strike out and viability of claims

The applicant argued that the claims disclosed no reasonable cause of action because they had been extinguished under South African prescription law. Central to that proposition was when the liquidators obtained the requisite “knowledge” of the dispositions and counterparties.

The Court rejected that argument, applying the orthodox and high threshold for strike out: a claim will only be dismissed where it is clear that it will fail. That threshold was not met. The question of “knowledge” depended on disputed issues of foreign law and fact.

A key issue was when prescription began to run under South African law. The liquidators argued that time only began to run when they had actual “knowledge” of the identity of each debtor, including their name and address.

The respondent, by contrast, argued that the liquidators effectively had that knowledge much earlier, because they had access to MTI’s database (i.e. MTI’s data translated into knowledge of specific claims).

The Court held that these issues could not be resolved summarily on a strike out application because:

• • access to data did not necessarily equate to the same knowledge required to start prescription running;
  • identifying debtors required complex forensic analysis and bespoke software; and
  • the dispute required detailed factual and expert evidence.

The application was therefore dismissed,  indicating that strike out will seldom succeed where limitation defences in particular turn on disputed issues of foreign law and complex factual enquiries.

Section 426, foreign law and English proceedings

As highlighted above, the claims were advanced by letters of request from the South African court and orders of the English court under section 426 authorising the liquidators to:

• • bring claims in England; and
  • rely on both South African insolvency law and English insolvency provisions.

As a result, the proceedings involve an unusual combination of:

• • South African “clawback” claims (under sections 26, 29 and 30 of the South African Insolvency Act); and
  • English avoidance claims (under sections 238 and 239 of the Insolvency Act 1986).

The strike out application brought into focus a key cross-border issue – whether a claim said to be extinguished under foreign law can nonetheless proceed in England. However, the decision leaves an important question unresolved; whether section 426 permits the wholesale importation of foreign insolvency regimes, including their rules on limitation, or whether English principles continue to govern issues such as limitation.

The Court proceeded on the basis (conceded for the purposes of the application) that South African prescription law could apply to the South African claims but held that the operation of that law was disputed, and the issue could not be decided without a full trial.

The position was different for the English claims. The liquidators argued that even if the South African claims were time-barred, the English statutory claims could still proceed independently.

That issue also turned on the scope of section 426, and in particular whether the Court was applying foreign insolvency law only, or broader aspects of foreign law, including limitation

The decision therefore illustrates both the flexibility and complexity of section 426 in that it enables foreign liquidators to pursue claims in England but raises difficult questions about how foreign law interacts with English procedural rule. This remains a significant area of uncertainty for cross-border practitioners.

Abuse of process and conduct of liquidators

The respondent also argued that the proceedings should be struck out as an abuse of process.

This argument focused on the conduct of the liquidators and their solicitors, including statements made to the English Court and statements made in parallel proceedings in South Africa.

The Court approached this argument by reference to the high threshold for strike out on abuse grounds. The conduct must be such as to jeopardise the fairness of the trial or make a just determination of the case impossible. That threshold was not met.

While there were disputes about how the proceedings had been conducted, the Court was not satisfied that the trial process had been compromised, or the proceedings had been pursued in a way that justified termination.

Accordingly, the abuse of process argument also failed.

Conclusion

The decision illustrates the difficulty of summarily disposing cross-border insolvency claims, involving crypto assets, foreign law, and complex factual reconstruction. For practitioners, it reinforces that such disputes will often be trial heavy and that early procedural challenges, unless carefully considered, may do little more than increase costs.