The judgment also provides clear guidance on challenges to an adjudicator’s jurisdiction, which is of importance to all involved in adjudications.

Background

The case concerned two conjoined appeals, Bresco Electrical Services Limited (in liquidation) v Michael J Lonsdale (Electrical) Limited and Cannon Corporate Limited v Primus Build Limited.

Bresco

Almost every year amendments are made to the rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The amendments address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. The rule amendments are ultimately adopted by the U.S. Supreme Court and technically subject to Congressional disapproval.

A recent decision in Michael J Lonsdale (Electrical) Limited v Bresco Electrical Services Limited (In Liquidation) [2018] (TCC) has held that a company in liquidation cannot refer a dispute to adjudication when that dispute includes (whether in whole or in part) determination of any claim for further sums said to be due to the referring party from the responding party. 

Background

Over the last twenty years, courts have increasingly insulated transactions from avoidance as fraudulent transfers by invoking the so-called “settlement payment” defense codified in section 546(e) of the Bankruptcy Code. The safe harbor has been interpreted in the Second and Third Circuits and elsewhere as precluding debtors, trustees and creditors committees from clawing back otherwise objectionable pre-bankruptcy transfers solely because the money at issue flowed through a bank or other financial institution.

The Tempnology Trademark Saga. When it comes to decisions on bankruptcy and trademark licenses, the In re Tempnology LLC bankruptcy case is the gift that keeps on giving.

A number of companies within the Carillion group have been placed in compulsory liquidation. The Official Receiver has been appointed as liquidator, with support from PwC. It has been confirmed that there is no prospect of any return to shareholders.

Given the size of Carillion, the UK's second-biggest construction company, with 43,000 employees and contracts on a wide range of projects, including a number of flagship infrastructure projects, this will inevitably have a significant impact on the UK construction sector as a whole. Official advice from PwC is:

The Court of Appeal raises the bar for insolvent claimants on security for costs

Just about every year amendments are made to the rules that govern how bankruptcy cases are managed — the Federal Rules of Bankruptcy Procedure. The amendments address issues identified by an Advisory Committee made up of federal judges, bankruptcy attorneys, and others. As the photo above reminds us, the rule amendments are ultimately adopted by the U.S. Supreme Court (and technically subject to Congressional disapproval).

Two recently published decisions in the TCC considered the enforceability of an Adjudicator's decision and insolvency issues

Typically, the TCC has sought to enforce an Adjudicator's decision and the avenues for the losing party to challenge the award is narrow. The case law regarding what may and may not give rise to a successful challenge is well known and outside the scope of this note.

The Supreme Court recently agreed to review the applicability of the safe harbor provision in section 546(e) of the Bankruptcy Code after differing interpretations of the statute created a split among the circuit courts. The ultimate outcome on the issue currently before the Supreme Court will undoubtedly impact how parties choose to structure their debt and asset transactions going forward.