Summary
There was an application, seeking a court approval for arrangements under Pt 26 of the Companies Act. The applicants (or the scheme companies) encompassed two English companies, a holding company and another company from Germany as well as five subsidiaries from across Europe. The parties were part of a group of companies which had 39 subsidiaries in 12 countries. An important issue was whether the English court had jurisdiction to approve such arrangements under Section 899 of the Companies Act in respect of foreign companies. The English High Court exercised jurisdiction under Article 23(1) of Brussels I. On 26th March 2014, Mr Justice Hildyard held:
“24 The novelty of the position is this. There are a number of authorities in the recent past which confirm (at least at this level, and without in any case contrary argument) the jurisdiction of the English court to approve a Pt 26 scheme in respect of a foreign company and a company with its centre of main interests (COMI) elsewhere than England, where the English court is satisfied first, that there are sufficient contacts with this jurisdiction to warrant its intervention (which is usually demonstrated by the governing law and jurisdiction selection in the facilities agreement itself) and secondly, that its order will be recognised and given effect in the foreign jurisdictions concerned. However, there is no case, so far as I am aware, where the English court has intervened where originally the agreements concerned were governed by some other law.” [24]
On 14th April 2014, Mr Justice Hildyard held
“24 I should perhaps, and for comprehensiveness, mention that I have also considered a question that is not without its difficulties, which is as to the possible application of art.2 of the Judgments Regulation. That question has been addressed in the sequence of cases to which I have referred; but a conundrum remains as to whether it applies at all. The easiest answer, if available, would be that the Judgments Regulation has no effect because there is simply nothing which triggers it on the basis that there is no lis in the proceedings. That was the view that I was inclined to provisionally in Primacom , but David Richards J has rightly cautioned that there may be an autonomous European meaning which would have to be considered before that easy answer could safely be adopted. However, it is once again unnecessary to resolve the conundrum. Even if one proceeds upon the footing that art.2 of the Judgments Regulation is otherwise applicable, the exceptions to its requirement for a person domiciled in a Member State to be “sued” there is subject to exceptions in art.23 […] and art.24 […]. Accordingly it appears to me that on one or more of the variety of grounds identified in Primacom and the subsequent cases, and again with the comfort that the experts, albeit with varying degrees of emphasis, have all confirmed that the scheme would, if sanctioned in England, be given effect in their own jurisdictions, there is no problem in terms of the Judgments Regulations such as to cause me to decline sanction.
25 To summarise my views on the jurisdictional issues, I have concluded that the combination of the fact that: (a) the facilities agreement is now (albeit pursuant to a change of law clause) governed by English law; (b) subject to one small issue, the creditors have selected the English court as having exclusive jurisdiction; and (c) the court has been provided with independent experts’ opinions confirming that the courts in the jurisdiction where the creditors would have otherwise been likely to seek enforcement would indeed be likely to recognise the effectiveness of the orders if made, is sufficient to warrant the exercise of jurisdiction and the expectation that such exercise will be effective, given (of course) that I am otherwise satisfied that the schemes are fair and the relevant requirements of English law have been satisfied.” [24-25]