Legal history has been made in Bermuda after a judge granted permission for a foreign company to be wound up in Bermuda for the first time.

Justice Norma Wade-Miller made the decision to allow Convertix Corp, a company incorporated in the British Virgin Islands but managed from Bermuda, without a permit, to be wound up in Bermuda.

It means that companies incorporated elsewhere -- either with or without permits to work on the Island -- could be forced into liquidation if they have bad debt in Bermuda.

The Canadian information technology company Informission Group Inc applied to have the company wound up and half a million dollars of assets seized for non-payment of debt worth about the same amount.

The company's lawyers argued that as Convertix carried out work in Bermuda, had its sole director, its assets and its shares certificates in Bermuda, it should be wound up on the Island and not in the BVI.

And they said that the Companies Act of 1981 could, by implication, apply to companies operating with or without permits on the Island.

In her written judgment the puisne judge said that principles emerging from cases in the United Kingdom allowed for the company to be liquidated in Bermuda.

The legal process began on March 31, 2000, when Informission Group applied to have Convertix wound up under the Companies Act 1981.

In her written judgment Mrs. Justice Wade-Miller said about the application: "Essentially, it raises the point whether the Courts of Bermuda have the jurisdiction to grant a winding-up order in these circumstances. I granted the application and promised to give written reason for it later.'' The written judgment shows that Convertix was incorporated in the BVI on November 21, 1977 and has carried on business in Bermuda from a branch office with its sole director in Bermuda.

On August 11, 1999, Informission Group sought an order to wind up Convertix.

Informission stated it had entered into an agreement with Convertix for Informission to provide IT services to China First Commercial Bank.

Convertix admitted it owed $476,494 to Informission. The written judgment states: "The company's debt to the petitioner (Informission) remains unsatisfied.

"The petitioner (Informission) alleges that the company should be wound up on the basis that it is unable to pay its debt and/or it is just and equitable the company be wound up.

"The petitioner (Informission) argues that the company is an overseas company, it has conducted business in or from Bermuda and has assets within this jurisdiction.'' Judge approves company wind-up The written judgment quoted the provisional liquidator as saying: "... it accordingly appears that from inception the business of the company has been conducted from Bermuda with a sole director in Bermuda.

"The shares of the company, which are bearer shares, are all currently located in Bermuda under joint control of the Provisional Liquidator and Mr.

Alaistair MacDonald, a resident of Bermuda. Mr. Alaistair MacDonald indicated that the company's sole business transaction other than administrative transactions was a transaction with China Trust Commercial Bank of the Republic of China and Informission Group Inc of Canada. On June 10, 1998, the company (Convertix) and Informission Group entered into an agreement...No other activities have taken place in the British Virgin Islands with the exception of a registered office at the Arawak Trust Company in Tortola.'' The liquidator said assets of $471,674 were collected from the company's main debtor, China Trust Commercial Bank, and are now in Bermuda.

He added: "It is possible that the petitioner (Informission) may abandon part of its claim and return the company to a solvent position thus facilitating a member's voluntary liquidation and dissolution of the company under the law of its place of incorporation.

"However, the company is presently insolvent and in my respectful submission the company ought to be wound up. If not on this ground alone, then on the additional ground that it is just and equitable that an overseas company which has operated from Bermuda without a permit is in contravention of the Companies Act 1981 and should be wound up.'' The judge added: "This is clear and compelling evidence of paramount assistance. In my judgment there can be no doubt that Bermuda is indeed the most appropriate forum.'' Costs and incidentals of the petition were awarded to Informission.