Summary
This was an application for the sanction by the court of a scheme under English Companies Act 2006. The applicant was a German company, and had its centre of main interest there.
Although the company had no establishment in the UK, the company had a debt of approximately £305 million. The debt agreement facility contained an English law and jurisdiction clause. More than 50% of the creditors were domiciled in the UK.
The question was whether the English court had a jurisdiction to wind up a solvent company. Mr Justice Briggs held:
“38 In my judgment the English court’s jurisdiction to wind up a solvent company is, by article 22(2) of the Judgments Regulation, excluded in circumstances where, as in the case of Rodenstock GmbH, the company has its seat in a member state other than the UK.
[…]
60 The primary basis for the allocation of Member States' international jurisdiction is singularly ill-equipped to deal with proceedings for the sanctioning of schemes of arrangement, since they are not, at least in form, proceedings aimed at specific defendants at all. They may nonetheless be adversarial proceedings, in the sense that affected members and creditors of the scheme company may appear and oppose the grant of sanction and, for that purpose, serve evidence and make submissions just like any ordinary defendant. Furthermore, the process for obtaining sanction requires all such interested persons to be notified of the proceedings. As noted above, the effect of sanction will be to alter the rights of a defined class of persons, creditors or members.
61 The solution to this conundrum may be that, where there appears a lacuna in Chapter II in relation to proceedings within the scope of the Judgments Regulation, then each Member State may continue to apply its own private international law, by analogy with Article 4. Alternatively it may be necessary to shoehorn proceedings which do not in form involve suing anybody into the structure of Chapter II, by identifying the place or places of domicile of persons with a right to appear and oppose the relief sought, so as, for example, to apply Article 6.1 in a case where one or more members or creditors of a company affected by a proposed scheme is domiciled in the UK, as if such persons were all quasi defendants.
62 It is unnecessary to resolve that conundrum in the present case, because more than 50% (by value) of the Scheme Creditors are indeed domiciled in England, so that the English court would have jurisdiction whichever solution to the conundrum were to be adopted. I shall leave to another day a case in which a scheme is sought to be sanctioned in England where all the affected members or creditors are domiciled in Member States other than the UK.” [38 and 60-62].