With the UK Government protections to prevent a flood of corporate insolvencies all now tailing off, will 2022 see the much talked about "tsunami" of insolvencies? Market views on that are mixed but it does seem certain that there will be at least a significant upturn in insolvencies compared to 2020 and 2021. With that in mind, it's worth considering the major differences between Scotland and England when it comes to corporate insolvencies.
1. There is no Official Receiver in Scotland
The National Company Law Appellate Tribunal (NCLAT) vide its order dated 3 January 2022 in Jayanthi Ravi v Chemizol Additives Pvt Ltd ruled that the advance extended by a director to the company which is recorded as a loan in the minutes of the meeting of the board of directors would be classified as financial debt under the Insolvency and Bankruptcy Code, 2016 (IBC).
The legal market in Scotland has changed over the last year, although perhaps not to the extent that anyone would have predicted. Firms have, in general terms, coped well with remote working and are beginning to cope well with hybrid working too. Traditional streams of work have been maintained and while some practice areas, such as insolvency and restructuring, have been quieter than anticipated, that has not had a significant impact on the bottom line. So, what can we expect in 2022?
1. Insolvencies will rise – even if we don’t experience the “tsunami”
INTRODUCTION
Climate change is centre stage and our use of land and its effect on the climate are intertwined.
Land is a precious resource. "Buy land, they're not making make it anymore" - in these seven words, Mark Twain captures the mood of a nation. Land is a safe economic resource, until it is not. I am not sure if Mark Twain would have taken the same view with regard to contaminated land and to paraphrase Mr Orwell, "all [contaminated land] is born equal, but some [is] more equal than others".
A three-judge Bench of the Supreme Court of India (SC) in V. Nagarajan v. SKS Ispat and Power Ltd. & Others (judgment dated 22 October 2021 in Civil Appeal No. 3327 of 2020) dismissed an appeal against an order passed by the National Company Law Appellate Tribunal (NCLAT) which had dismissed an appeal against an order passed by the National Company Law Tribunal Chennai (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC) as barred by limitation.
Facts
In September 2020, I wrote a piece on the above case in the Chancery Division of the High Court, which can be found here and here.
Introduction:
Aggrieved by the order of the National Company Law Appellate Tribunal (NCLAT) refusing to condone a delay of 44 (forty-four) days in filing an appeal against the order passed by the National Company Law Tribunal (NCLT), the Appellant (i.e., National Spot Exchange Limited) preferred an appeal before the Hon’ble Supreme Court of India.
Any funder offering invoice finance facilities in the UK whose borrowers have (or may in the future have) debtors with a Scottish connection should be aware of the different rules applicable to invoice finance in Scotland.
Scots law is less user-friendly to invoice financiers than English law, and the following is a brief, high level guide to some of the key issues to consider in invoice finance transactions which involve Scottish debts or debtors.
When is Scots law relevant?