Carving out irreconcilable judgments under the Insolvency Regulation

Carving out irreconcilable judgments under the Insolvency Regulation

Richard Bunce, partner and James Matthews, associate, at Simmons & Simmons LLP, examine in detail the judgment in the Marme Inversiones 2007 SL case and assess whether the decision clarifies the relationship between the Insolvency Regulation and Brussels I.

Original news

Marme Inversiones 2007 SL v The Royal Bank of Scotland plc and others The Royal Bank of Scotland plc v Marme Inversiones 2007 SL [2016] EWHC 1570 (Comm), [2016] All ER (D) 182 (Jun)

The Commercial Court dismissed the claimant company’s application to stay the defendant banks’ counterclaims and declaration claim in a dispute concerning the failed development of a building in Spain. The court held that the claims had different issues and objectives to related proceedings in Spain, and that the risk of irreconcilable judgments was not so great as to justify allowing the application. Further, the court would not exercise its discretion to order that the English proceedings should be stayed.

How did the issue arise?

Marme Inversiones 2007 SL (Marme), a Spanish special purpose vehicle incorporated for the acquisition of Santander’s headquarters in Spain, was advanced a senior loan of €1.575bn by a syndicate of banks led by the Royal Bank of Scotland plc (RBS), HSH Nordbank AG and Bayerische Landesbank as joint lead arrangers. Interest on the senior loan was payable by reference to Euro Interbank Offered Rate (EURIBOR) and Marme entered into interest rate swap agreements with five of the syndicate banks to hedge its interest payment liabilities. The five swap counterparties were the joint lead arrangers, together with ING Bank NV and Caixa Bank SA (the banks). Each of the swap agreements was governed by English law and subject to an exclusive jurisdiction clause in favour of the English courts.

In 2014, Marme went into voluntary insolvency proceedings in Spain and went into liquidation in 2015. Following Marme’s failure to pay sums due under the terms of the swap agreements, the banks

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