Posts Tagged Stripes US

Stripes US. High Court considers jurisdiction for scheme of arrangement in the usual way.

In [2018] EWHC 3098 (Ch) Stripes US, Smith J deals with jurisdiction for schemes of arrangement in the now well established way (see my last report on same in Algeco):

The EU’s Insolvency Regulation is clearly not engaged: the schemes fall under company law. The High Court then applies the jurisdictional test viz the Brussels I Recast Regulation arguendo: if it were to apply (which the English Courts have taken no definitive stance on), would an English court have jurisdiction? Yes, it is held: under Article 8 (anchor defendants).

The issue in fact splits in two: so far as the question of jurisdiction in relation to a foreign (non-EU or Lugano States based) company is concerned (Stripes US is incorporated in Delaware), the law is clear. It is well-established that the court has jurisdiction to sanction a Scheme in relation to a company provided that company is liable to be wound up under the Insolvency Act 1986.

Turning next to the Scheme Creditors, of the 31 Scheme Creditors, 19.4% by number (26.35% by value) of the ‘defendants’ (an odd notion perhaps in the context of a Scheme sanction) are domiciled in the UK, plenty Smith J holds to suggest enough reason for anchoring: not taking jurisdiction vis-a-vis the defendants domiciled in other Member States, would carry with it a serious risk of irreconcilable judgments.

Finally the case for forum non conveniens (and comity) is considered (vis-a-vis the US defendant), and rejection of jurisdiction summarily dismissed: in this case the relevant agreement which is the subject of the Scheme has a governing law which is (and, I understand, always has been) English law: at 63: ‘Generally speaking, that is enough to establish a sufficient connection. The view is that under generally accepted principles of private international law, a variation or discharge of contractual rights in accordance with the governing law of the contract should be done by the court of that law and will be given effect to in other third-party countries.’ US experts moreover advised any judgment would most probably have no difficulty being enforced in the US

Geert.

(Handbook of) EU Private International Law, 2nd edition 2016, Chapter 5.

 

, , , , , , , , , , , , , ,

Leave a comment

%d bloggers like this: