Introduction

Commercial Agreements -v- Commercial Reality: Supreme Court further develops principles of contractual interpretation?

Rainy Sky S.A. and others v Kookmin Bank [2011] UKSC 50

Summary

Today (20th December) the Court of Appeal has clarified how TUPE applies when a business is sold after administration proceedings are instituted. It has decided that employees transfer to the new owner of the business, and are protected from transfer-related dismissals, thereby putting to rest more than two years of legal uncertainty following conflicting decisions from the Employment Appeal Tribunal (EAT).

A recent Court of Appeal case confirms that the Foreign Judgments (Reciprocal Enforcement) Act 1933 does apply to judgments in insolvency matters and that the Insolvency Act 1986 can be used to enforce a foreign judgment.

In New Cap Reinsurance Corporation Ltd & Anr v AE Grant & Ors [2011] EWCA Civ 971, the Court of Appeal upheld the first instance decision of the Companies Court that a judgment obtained in Australia could be enforced in England under section 426 of the Insolvency Act (the IA) and at common law.

NEW CAP RE: THE FACTS

Clients active in commodities markets (e.g. large consumers of copper and other metals) may be affected by the collapse of MF Global which was recently placed into Chapter 11 process in the US and into Administration in the UK. MFGlobal was an active clearing agent on numerous metal exchanges including the London Metal Exchange.

The Court of Appeal has confirmed that where the Pensions Regulator (Regulator) exercises its anti-avoidance powers against a company during insolvency, the liability ranks as an expense in the insolvency process.  The 14 October 2011 judgment, in a case involving the Nortel and Lehman Brothers groups, upheld the High Court's landmark decision of last year.

As we previously report here, Ambac Financial Group, Inc. (“AFG”), the holding company for the bond insurer, Ambac Assurance Corp. (“AAC”), filed for bankruptcy in November 2010 after it was unable to raise additional capital or come to terms with its debt holders.

U.S. Bankruptcy Judge Martin Glenn of the Southern District of New York has approved a stipulation between bankrupt bookseller Borders Group Inc. ("Borders") and email marketer Next Jump Inc. ("Next Jump") that will require Next Jump, a former marketing partner of Borders, to stop emailing Borders' customers and remove Borders' trademarks from its website and email blasts.

In New Cap Reinsurance Corporation Ltd & Anr v AE Grant & Ors, the Court of Appeal has upheld a first instance decision that section 426 of the Insolvency Act (IA) can be used to enforce a foreign monetary judgment in insolvency proceedings. However, the Court acknowledged that where there exists a statutory framework for the enforcement of foreign judgments, in this case enforcement pursuant to the Foreign Judgments (Reciprocal Enforcement) Act 1933 (the 1933 Act), then enforcement under s.426 of the IA must follow the requirements of the 1933 Act.

The case concerned credit default swaps entered into between Lehman Brothers Special Financing Inc., and various parties, and the rights of the parties in respect of collateral held by a trustee.