- Gateway to recognition closed? Convening judgment determines that new UK restructuring plan falls outside scope of Lugano Convention 2007 (Re gategroup Guarantee)
- What are the practical implications of this case?
- What was the background?
- Swiss jurisdiction
- Deed poll
- What did the court decide?
- Application of the Lugano Convention 2007 to restructuring plans
- The use of artificial means to access the jurisdiction
- Case details
Restructuring & Insolvency analysis: This judgment relates to the convening hearing for a restructuring plan under section 901C of the Companies Act 2006 (CA 2006) for gategroup Guarantee Ltd. In giving judgment, Mr Justice Zacaroli held that restructuring plans are insolvency proceedings falling within the bankruptcy exclusion in the Lugano Convention 2007 and that the court accordingly had jurisdiction in spite of an exclusive jurisdiction clause in favour of the courts of Zurich. The Lugano Convention 2007 had been anticipated by many practitioners to offer a route to recognition for both schemes of arrangement and restructuring plans in EU Member States post-Brexit; however, this decision rejects the possibility of such an approach in relation to restructuring plans. Although the determination in relation to the Lugano Convention 2007 is likely to be the main focus for practitioners, this judgment also provides helpful confirmation that the court will accept jurisdiction even in circumstances where it has been manufactured through the use of a newly incorporated special purpose vehicle (SPV). Written by Riccardo Alonzi, associate at Skadden, Arps, Slate, Meagher & Flom (UK) LLP.
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