RUBIN V EUROFINANCE SA
New Cap Re v Grant
[2012] UKSC 46
A problem frequently faced by landlords in the current economic climate is that of tenants who time their entry into administration so that it takes place just after rent payable in advance on a quarter day has fallen due. This growing practice has left landlords frustrated and out of pocket.
We all know how busy insolvency practitioners (IPs) were during the recession dealing with the huge rise in corporate and personal insolvencies. That is now feeding into a real spike in professional negligence claims. We briefly summarise some typical claims we are seeing and how best to handle them.
What types of claims are we seeing?
Empty units, falling yields and the spectre of tenant defaults are increasingly common issues that landlords have had to face in the current recession. To add to this landlords have also had to confront a number of high profile CVAs including JJB Sports (twice), Blacks Leisure, Stylo Group, Focus DIY, Fitness First and Travelodge to name a few.
Under the Global Master Repurchase Agreement (the "GMRA"), a standard form agreement produced by The Bond Market Association and the International Securities Market Association, all of the events of default (with one exception) require both (i) the occurrence of an event and (ii) service by the non-defaulting party of a default notice on the defaulting party.
Azevedo and another v Imcopa Importacao, Exportaacao E Industria De Oleos Ltda and others [2012] EWHC 1849 (Comm)
Summary
In Rubin v Eurofinance SA and New Cap Reinsurance Corporation (in liquidation) and another v AE Grant and others [2012] UKSC 46, the UK Supreme Court held that:
On 24 October 2012 the UK Supreme Court handed down its highly anticipated decision on the enforceability of foreign judgments in the case of Rubin v. Eurofinance S.A. [2012] UKSC 46, reversing the previous judgment of the Court of Appeal which had significantly altered the landscape of cross-border insolvency.
The recent JJB Sports administration highlighted another potential consideration for landlords – namely, the wisdom of company voluntary arrangements (CVAs). JJB went through two failed CVAs prior to going into administration in September.
If you’re pursuing assets in England relevant to a non-European bankruptcy or insolvency, you can’t rely on a (default) foreign judgment and must instead bring fresh proceedings in the English courts