PJSC Uralkali v Rowley & Anor [2020] EWHC 3442 (Ch) is about the sale of the Force India F1 racing team, owned and operated by Force India Formula One Team Limited (the “Company”).

The Force India F1 team was more successful on the track than it was financially and by the summer of 2018, the Company was in a precarious financial position. The Company went into administration and appointed joint administrators on 27 July 2018 (the “Joint Administrators”).

The issue in this case concerned the failure of a holder of a Qualifying Floating Charge (QFC) to give notice to a prior QFC holder before appointing administrators, therefore potentially calling into question the validity of the administration.

The facts of this case were somewhat unusual although it serves as a reminder of the principles involved in the trading of a business by a trustee in bankruptcy.

Background

JMW Solicitors have recently obtained an Order made pursuant to Section 234 of the Insolvency Act 1986 (the “Act”), which includes a term that allows the office-holder to recover possession of a residential property, without the need for separate possession proceedings being issued pursuant to Part 55 of the Civil Procedure Rules (“CPR”), which sets out the usual Court procedure for obtaining an order for possession of land.

The background facts to this case are relatively straightforward: a group of companies consisting of the parent (‘AIL’) and three subsidiaries (‘the Subsidiaries’) operated in the energy sector.

A lender (‘Junior Creditor’) advanced approximately £39M to AIL, secured by qualifying floating charges (‘QFC’) over AIL and the Subsidiaries. A second lender (‘Senior Creditor’) subsequently lent £5M to AIL secured by a QFC over AIL but not the Subsidiaries.

Twelve creditors (representing about 16% of company debt, and represented by a firm of licensed insolvency practitioners) have failed in an attempt to compel administrators to move to creditors’ voluntary liquidation, alternatively an order for compulsory liquidation. The Creditors also sought the revocation of a proposal ‘purported to have been deemed approved’.

The Company was involved in construction work, falling victim to the Covid-19 pandemic in that it was forced to cease trading following the announcement of lockdown on 23 March 2020.

The Key Issues and Background

The Court of Appeal was asked to consider two key points (together with matters, including relating to the granting of summary judgment) regarding the procedural aspects of applications in insolvency proceedings. The relevant proceedings were issued by the trustees in bankruptcy of Nicola Ide (the “Trustees”).

First, could the County Court transfer part of insolvency proceedings to the High Court?

The Key Issues and Background

The Court of Appeal was asked to consider two key points (together with matters, including relating to the granting of summary judgment) regarding the procedural aspects of applications in insolvency proceedings. The relevant proceedings were issued by the trustees in bankruptcy of Nicola Ide (the “Trustees”).

First, could the County Court transfer part of insolvency proceedings to the High Court?

The oil and gas industry in the United States is highly dependent upon an intricate set of agreements that allow oil and gas to be gathered from privately owned land. Historically, the dedication language in oil and gas gathering agreements—through which the rights to the oil or gas in specified land are dedicated—was viewed as being a covenant that ran with the land. That view was put to the test during the wave of oil and gas exploration company bankruptcies that began in 2014.

The past year has seen some important judgments and hearings (with judgment awaited at the time of writing) on several subjects, some of which may shape the future of UK litigation for years to come. Litigants and litigators have also spent a good part of the year getting used to a new way of conducting litigation—remotely and fully electronically. Starting with contract law, while there has been little by way of Supreme Court guidance on the subject, the lower courts continue to issue interesting judgments.