The Masri litigation has yet again troubled the English Court on the principle of comity and provided the Court of Appeal with the opportunity to say just how important it is in international debt enforcement.

The background on Masri

The Federal Labour Court has ruled on the fundamental issue of who will be entitled to the rights under a life insurance policy concluded by the employer in the employee’s favour in the event that an employment relationship comes to an end in the course of the employer’s insolvency proceeding.

Dubai World – government releases details of a tailor-made restructuring process

In the wake of the high profile financial problems affecting the Dubai World group, the Dubai government has announced a new reorganisation law in case that group is unable to achieve an acceptable restructuring of its debts. New legislation was needed because the status of Dubai World as a company incorporated under special legislation means that the UAE insolvency laws do not apply to it. The new legislation:

Background

Article 4.1 of Council Regulation (EU) No 1346/2000 of 29 May 2000 on Insolvency Proceedings (the "Regulation") states: "Save as otherwise provided in this Regulation, the law applicable to insolvency proceedings and their effects shall be that of the Member State within the territory of which such proceedings are opened..."

Article 4.2 of the Regulation sets out a non-exhaustive list of the matters which the law of the state of the opening of insolvency proceedings is to determine, including:

The government has clarified which claims will benefit from the continued recoverability of CFA success fees and ATE insurance premiums, following its announcement in May last year that there would be a two-year delay to implementation of this aspect of the Jackson reforms for “insolvency proceedings” (see post).

The story of the restructuring of carpet-maker, Brintons has featured in the press recently, with emphasis on the role of Carlyle, one of the world's biggest private equity firms. The facts are similar to the Silentnight pre-pack which we featured in a previous bulletin. In each case, the Pensions Regulator is said to be considering using its anti-avoidance powers under the Pensions Act 2004 to compel senior debt holders to pay towards the deficit of the defined benefit pension scheme operated by the company.

In brief

It is likely that changes to the employer debt regulations (the so-called "section 75 debt" regime) will come into force on 6 April. These will prevent a debt from arising on certain internal group restructurings where there is no weakening of the employer covenant. However, the regulations are highly prescriptive and are, therefore, less attractive as a means of dealing with section 75 debts when compared to apportionment or withdrawal arrangements.

In Butters and ors v BBC Worldwide Ltd and ors, decided on 20 August 2009, the Court held that contractual provisions in a joint venture agreement taken together with termination provisions in a licence of IP rights were void since the effect of those provisions on insolvency was to deprive creditors access to assets and therefore contrary to public policy in the light of insolvency laws.

BUSINESS IMPACT

2013 will herald some significant changes to the UK legal arena, notably in the corporate area in relation to executive remuneration and narrative reporting, in dispute resolution as the Government's reforms to the civil litigation costs and funding regime are due to be implemented and in the energy, real estate and construction areas where there are major changes to the carbon reduction commitment energy efficiency scheme, further amendments to the Community Infrastructure Levy Regulations, the introduction of the Growth and Infrastructure Bill and various amendments to the Building Regula