The High Court has ruled that the Irish Stock Exchange’s decision to revoke Bloxham’s membership cannot be challenged by judicial review. The ruling decided a preliminary legal issue; it did not determine whether the revocation itself was lawful or valid.
Bloxham, which was in liquidation, had obtained leave to seek judicial review of the exchange’s 19 December 2012 decision under Rule 2.15. That rule allows membership to be revoked by written notice if a member firm has stopped carrying on business on the exchange for at least six months. The issue before Mr Justice Cooke was whether that decision was subject to judicial review.
Bloxham had been directed by the Central Bank to suspend trading activities on 25 May 2012. Its exchange membership was suspended three days later. The firm petitioned to be wound up on 31 May, and Kieran Wallace was appointed liquidator on 25 June.
In December, the exchange’s head of regulation invited the liquidator to make representations before deciding whether to revoke membership. The liquidator’s solicitors objected. The exchange then issued the revocation decision. Bloxham’s liquidator argued that the exchange’s role in operating a regulated market gave it a public-law dimension, making the decision reviewable by the court.
The exchange argued that Rule 2.15 was a private contractual power, arising from Bloxham’s membership of the exchange company. The judgment noted that the liquidator had also started a separate civil action seeking a declaration that Bloxham’s removal from the company’s register of members was invalid.
The court found that the Central Bank, rather than the exchange, held the relevant public regulatory authority over investment firms. The Bank’s revocation of Bloxham’s authorisation had ended its ability to trade; the exchange’s later decision ended its membership under Rule 2.15. The court said the decision challenged in these proceedings concerned membership of the private company, which was distinct from authorisation to operate as a stockbroker.
The liquidator’s stated interest was preserving the possibility that Bloxham could benefit from a proposed reorganisation, known as Project Chrysalis, and a possible distribution of the exchange’s accumulated reserves. The court considered that objective, the contractual basis of membership and the separate civil action in concluding that the dispute lay in private law.
The preliminary issue was determined in favour of the exchange. The court held that the 19 December decision was not amenable to judicial review. It did not decide the merits of the separate civil action or whether the revocation was invalid under private law.