![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
England and Wales High Court (Chancery Division) Decisions |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Enasarco v Lehman Brothers Finance SA & Anor [2014] EWHC 34 (Ch) (16 January 2014) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2014/34.html Cite as: [2014] EWHC 34 (Ch) |
[New search]
[Context]
[View without highlighting]
[Printable RTF version]
[Help]
CHANCERY DIVISION
COMPANIES COURT
Rolls Building, Fetter Lane, EC4A 1NL |
||
B e f o r e :
____________________
FONDAZIONE ENASARCO |
Claimant |
|
- and - |
||
(1) LEHMAN BROTHERS FINANCE S.A. (2) ANTHRACITE RATED INVESTMENTS (CAYMAN) LIMITED |
Defendants |
____________________
HAPGOOD QC and MR JASBIR DHILLON QC (instructed by Sidley Austin LLP) for the Claimant
MR JONATHAN NASH QC and MR THEODOR VAN SANTE (instructed by Field Fisher Waterhouse LLP) for the First Defendant
MR JEREMY GOLDRING QC (instructed by Clifford Chance LLP) for the Second Defendant
Hearing dates: 16 and 17 December 2013
____________________
Crown Copyright ©
Mr Justice David Richards :
Introduction
Facts
"With respect to any suit, action or proceedings relating to this Agreement ("Proceedings"), each party irrevocably:-
(i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York; and
(ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction."
The effect of this provision is to give exclusive jurisdiction to the English courts, as between the courts of States bound by the Lugano Convention, but proceedings may be brought in the courts of other countries.
The issues
i) Whether the Swiss proceedings fall within the exclusion of insolvency proceedings under article 1(2)(b).
ii) If the Swiss proceedings do not fall within the exclusion of insolvency proceedings, whether this court is required to order a stay of the English proceedings under article 27.
iii) If the Swiss proceedings do fall within the exclusion of insolvency proceedings, is article 28 nonetheless applicable, so that this court has the discretion to stay the English proceedings.
iv) If article 28 is applicable, whether this court should exercise its discretion to stay the English proceedings.
v) Whether this court should stay the English proceedings pursuant to section 49(3) SCA 1981.
The application of the Lugano Convention to the Swiss proceedings
"This Convention shall apply in civil and commercial matters whatever the nature of the court or tribunal. It shall not extend, in particular, to revenue, customs or administrative matters."
Article 1(2)(b) provides:
"The Convention shall not apply to:
(b) bankruptcy, proceedings relating to the winding-up of insolvent companies or other legal persons, judicial arrangements, compositions and analogous proceedings."
"nothing which thereafter occurred appears to me to have been intended to detract from the plan that the bankruptcy exclusion should exclude from the Judgments Regulation nothing more, and nothing less, than what was included within the scope of the Insolvency Regulation."
As regards the exclusion of insolvency proceedings, the Judgments Regulation and the Insolvency Regulation must be read in the light of the other, and the same in my judgment is true of the Lugano Convention.
"…it is necessary, if decisions relating to bankruptcy and winding-up are to be excluded from the scope of the Convention, that they must derive directly from the bankruptcy or winding-up and be closely connected with the proceedings for the "liquidation des biens" or the "règlement judiciaire"."
"…it is therefore necessary to ascertain whether the legal foundation of an application such as that provided for in Article 99 of the French Law is based on the law relating to bankruptcy and winding-up as interpreted for the purposes of the Convention.
The application under Article 99, called an application to make good a deficiency in the assets, for which special provision is made in a law on bankruptcy and winding-up is made only to the court which made the order for the "règlement judiciaire" or the "liquidation des biens".
It is only the "syndic" – apart from the court which can make the order of its own motion – who can make this application on behalf of and in the interest of the general body of creditors with a view to the partial reimbursement of the creditors by respecting the principle that they rank equally and by taking account of any preferential rights lawfully acquired."
After referring to the period of limitation of three years running from the date when the final list of claims is drawn up and the fact that a successful claim results in a benefit to the general body of creditors, the Court continued:
"It is quite apparent from all these findings that the legal foundation of Article 99, the object of which, in the event of the winding-up of a commercial company, is to go beyond the legal person and proceed against its managers and their property, is based solely on the provisions of the law of bankruptcy and winding-up as interpreted for the purpose of the Convention."
The judgment was accordingly excluded from the Brussels Convention.
"In accordance with the principle of proportionality this Regulation should be confined to provisions governing jurisdiction for opening insolvency proceedings and judgments which are delivered directly on the basis of the insolvency proceedings and are closely connected with such proceedings."
Recital (6) reflects the approach in Gourdain v Nadler. The Court continued "Consequently, the scope of application of [the Insolvency Regulation] should not be broadly interpreted", while nonetheless noting that by reason of the Gourdain test "an action is related to bankruptcy if it derives directly from the bankruptcy and is closely linked to proceedings for realising the assets or judicial supervision".
"29 In the light of the above it is therefore the closeness of the link, in the sense of the case-law resulting from Gourdain, between a court action such as the one at issue in the main proceedings and the insolvency proceedings that is decisive for the purposes of deciding whether the exclusion in Article 1(2)(b) of Regulation No 44/2001 is applicable.
30 It should be noted that, in a case such as the one at issue in the main proceedings, that link is neither sufficiently direct nor sufficiently close to exclude the application of Regulation No 44/2001.
31 It appears from the order for reference that German Graphics, the applicant in the proceedings before the Landgericht Braunschweig, has requested the recovery of assets owned by it and that the only question before the court relates to the ownership of certain machines situated on the premises of Holland Binding in the Netherlands. The answer to that question of law is independent of the opening of insolvency proceedings. The action brought by German Graphics sought only to ensure the application of the reservation of title clause in its own favour.
32 In other words, the action concerning that reservation of title clause constitutes an independent claim, as it is not based on the law of the insolvency proceedings and requires neither the opening of such proceedings nor the involvement of a liquidator.
33 In those circumstances, the mere fact that the liquidator is a party to the proceedings is not sufficient to classify the proceedings brought before the Landgericht Braunschweig as proceedings deriving directly from the insolvency and being closely linked to proceedings for realising assets. "
"Any creditor wishing to contest the schedule of claims because its claim has been entirely or partially rejected or not allocated the class requested must bring an action against the bankrupt estate before the court of the place of the bankruptcy proceedings within 20 days of the schedule of claims being made available for public inspection."
Article 250.4.2 entitles any creditor to contest the admission of another creditor to the schedule of claims or the allocated class. The assets of the company in liquidation are distributed to and among the claimants as admitted in the schedule of claims, amended as necessary as the result of any court challenges.
"It is the purpose of scheduling proceedings in the context of bankruptcy (Art 244 to 251 DEBA) to determine the encumbered estate, i.e. the scope of all claims which can satisfy themselves from the bankruptcy proceedings, according to their existence, amount, rank and any preferential rights that exist against the debtor's assets. Scheduling proceedings served the sole purpose of clarifying the schedule of claims and have as little impact beyond the scope of the bankruptcy proceedings in terms of any res judicata effects as the schedule. The debt obligation as such – between debtor and creditor – is not resolved with binding legal effect as a result thereof. In scheduling proceedings, the existence of a claim can certainly be the object of judicial review, but cannot form the object of a decision that obtains res judicata. Rather the object of a scheduling decision is merely a determination as to the extent to which the contested claims of the creditor are to be taken into account when liquidating the bankrupt's estate."
Later in the same paragraph the court continued:
"The Swiss scheduling law suit is thus no different from the Swiss actio pauliana, which, as a bankruptcy-related law suit with reflexive effect on substantive law, is also excluded from the scope of application of the Lugano Convention. The scheduling action is a legal remedy that is closely related to the structure of bankruptcy law and the particularities thereof…and as such forms an integrated component of bankruptcy liquidation."
The court went on to note that it was not, however, required to reach a decision on this point.