United Kingdom updates

Arbitration & ADR

Contributed by Clifford Chance
Courts' attitude towards unilateral option clauses
  • United Kingdom
  • 11 March 2021

Unilateral option clauses provide for disputes to be referred to arbitration, but give one party the exclusive right to elect to refer a dispute to litigation before the courts; the clauses also provide for disputes to be referred to a court, but give one party the exclusive right to elect to refer the dispute to arbitration instead. Parties should exercise caution when considering whether to include unilateral option clauses in their agreements.

Court of Appeal addresses expert's duties and conflicts of interest
  • United Kingdom
  • 11 February 2021

The Court of Appeal recently considered for the first time the question of an expert's duty to avoid a conflict of interest. The court's decision, while not deciding the point finally, means that it is unlikely that a court will now recognise such a duty as a matter of law. The issue is a matter of contract. The judgment contains a useful analysis of when conflicts can arise in related cases and the circumstances in which a large organisation offering expert or litigation support services may find itself conflicted.

Supreme Court clarifies test of arbitrator impartiality and arbitrators' duty of disclosure
  • United Kingdom
  • 07 January 2021

The Supreme Court recently unanimously upheld a Court of Appeal decision to dismiss an application to remove an arbitrator on the grounds of apparent bias. The Supreme Court confirmed the Court of Appeal's decision that arbitrators are under a duty to disclose appointments in references concerning the same or overlapping subject matter with a common party, although the Supreme Court's reasoning differed.

High Court grants unprecedented extension of time for challenges to arbitral awards where fraud alleged
  • United Kingdom
  • 05 November 2020

The High Court recently granted an extension of time to bring challenges to arbitral awards made under the Arbitration Act. The applications were striking as it had been several years since the awards were made. While the extension granted by the court was exceptional, so too were the circumstances of the case. Here, the integrity of both the arbitration system and the court were threatened and this public policy concern outweighed the principle of finality.

Supreme Court clarifies principles for determining law of arbitration agreement
  • United Kingdom
  • 22 October 2020

The Supreme Court has clarified definitively the principles for ascertaining the law governing an arbitration agreement. In contrast to the Court of Appeal's earlier decision in the same case, the Supreme Court held that where the law governing an arbitration agreement is not expressly specified, a choice of main contract law (whether express or implied) will generally also apply to an arbitration agreement which forms part of that contract.


Aviation

Contributed by Vedder Price PC
Come hell, high water or pandemic – COVID-19 will not frustrate aircraft lease agreements
  • United Kingdom
  • 07 April 2021

The Commercial Court recently rejected an airline's argument that the COVID-19 pandemic had frustrated its aircraft lease agreements and that it was therefore relieved of its contractual obligation to make rent payments. The court held that the airline's inability to operate the aircraft was a risk that it had assumed when it entered into the aircraft lease agreements. This decision will be welcomed by aircraft lessors and financiers.

Court rules that $5,150,000 in unpaid aircraft lease rent must be settled by arbitration
  • United Kingdom
  • 17 March 2021

In a recent case, the Commercial Court decided that the claimant, aircraft leasing company Helice, must arbitrate its claim against airline Garuda for more than $5,150,000 in unpaid lease rent under London Court of International Arbitration rules instead of proceeding by court action. The court endorsed the 'one-stop shop' principle established by the House of Lords, which holds that the parties to a contract are likely to have intended for any disputes arising out of that contract to be decided in the same forum.

CIGA and Cape Town Convention: insolvency and aviation
  • United Kingdom
  • 18 November 2020

The Corporate Insolvency and Governance Act 2020 shifted the focus of the UK insolvency regime from administration and liquidation to rescue and recovery and introduced numerous interesting features that apply to companies experiencing financial difficulties. This article considers how some of these features fit into the insolvency regime of the Cape Town Convention.

UK ETS – aviation emissions post-Brexit
  • United Kingdom
  • 22 July 2020

The government aims to implement a UK emissions trading system (UK ETS) in January 2021 following Brexit. This article outlines aviation-specific considerations of the proposed UK ETS and the interaction of the proposed scheme with the Carbon Offsetting and Reduction Scheme for International Aviation, the International Civil Aviation Organisation's market-based mechanism for offsetting emissions from aviation.

Court ruling shows importance of standard representations and warranties in aircraft leases
  • United Kingdom
  • 20 May 2020

A recent High Court case demonstrates the utility and importance of including standard representations and warranties regarding power, authority and validity in aircraft leases, including as an estoppel against a defendant's claim that a lease is void and unenforceable as a result of alleged breaches of foreign public procurement legislation and lack of authority. The decision also illustrates the benefit of choosing English law to govern aircraft lease transactions, particularly between international parties.


Banking & Financial Services

Contributed by Latham & Watkins LLP
United Kingdom to regulate buy-now-pay-later market
  • United Kingdom
  • 23 February 2021

The government has announced that interest-free buy-now-pay-later (BNPL) credit agreements will be regulated by the Financial Conduct Authority. At present, the BNPL market operates under an exemption from regulations for consumer credit lending. The announcement comes as a review of the unsecured credit market unexpectedly urgently recommends regulating all BNPL products.

BoE governor speaks: payments firms should expect regulatory change
  • United Kingdom
  • 29 September 2020

Bank of England Governor Andrew Bailey recently delivered a speech entitled "Reinventing the Wheel (with more automation)", in which he outlined regulatory changes that payments market participants can expect, including as part of the global regulatory response to stablecoins. Bailey emphasised the importance of not stifling innovation and highlighted the benefits that stablecoins, in particular, could offer.

Conduct and culture update from FCA
  • United Kingdom
  • 08 September 2020

In 2019 the Financial Conduct Authority (FCA) hosted conduct roundtables with 18 wholesale banks termed the 'engine room'. The roundtables culminated in the FCA's latest report on the 5 Conduct Questions Programme, 'Messages From the Engine Room', which reflects the FCA's findings and perspectives. This article summarises the key takeaways from the report and provides commentary and questions that firms might usefully address.


Competition & Antitrust

Contributed by Gowling WLG
When does competition law apply to public bodies? Recent guidance from Competition Appeal Tribunal
  • United Kingdom
  • 03 December 2020

In the context of a claim brought by Strident Publishing Limited against Creative Scotland, the Competition Appeal Tribunal has reiterated that UK and EU competition law applies to a public body only where it is acting as an 'undertaking'. The judgment provides helpful guidance for the purposes of assessing whether a public body is acting as an undertaking, such that UK or EU competition law would apply to its activities.

Merger control: CMA's ability to reject remedy proposals
  • United Kingdom
  • 26 November 2020

In April 2020 the Competition Appeal Tribunal (CAT) dismissed a challenge by Ecolab, Inc of the Competition and Markets Authority's (CMA's) decision in its final report on Ecolab's completed acquisition of The Holchem Group Limited, including in relation to the CMA's required divestiture remedy. The CAT's judgment confirms the CMA's ability to reject proposed remedies where it does not have a high degree of confidence that they will effectively address identified competitive concerns.

Retailers and suppliers face enforcement risks regarding RPM
  • United Kingdom
  • 19 November 2020

In June 2020 the Competition and Markets Authority (CMA) made a number of announcements regarding certain investigations into resale price maintenance (RPM) within the UK musical instruments sector. However, these announcements have wider consequences in the context of the CMA's enforcement activities more generally in relation to RPM.

Merger control: greater scope for government intervention
  • United Kingdom
  • 12 November 2020

The government has published details of the National Security and Investment Bill, which will introduce a foreign direct investment screening regime in the United Kingdom. This follows on from recent revisions to the UK merger control regime, which introduced a new public interest criterion (in relation to public health emergencies) and lowered the jurisdictional thresholds applicable to certain activities in the United Kingdom (relating to AI, cryptographic authentication technology and advanced materials).

UK competition authority continues to penalise individuals for competition law infringements
  • United Kingdom
  • 12 September 2019

The Competition and Markets Authority (CMA) recently publicised the disqualification of three individuals from acting as directors as a consequence of their company's involvement in an infringement of UK competition law. In view of the CMA's commitment to enforcement actions and to ensuring that directors are held personally responsible for competition law compliance, individuals and organisations should, among other things, proactively consider the extent of any potential exposure that they may face.


Corporate & Commercial

Contributed by Squire Patton Boggs
Preparing for your 2021 AGM and reporting season – what should be on the agenda?
  • United Kingdom
  • 22 March 2021

Many listed companies are now starting to prepare for the 2021 annual general meeting (AGM) season and plan their next annual report. This article summarises some of the key agenda items for 2021, including with regard to AGM arrangements, shareholder engagement, remuneration, climate, diversity and the COVID-19 pandemic.

Coronavirus and contractual penalties
  • United Kingdom
  • 16 March 2020

The Coronavirus outbreak may result in an upsurge of force majeure-related claims under commercial contracts. A further risk now coming to light is customers seeking to enforce contractual fines, penalties, service credits or liquidated damages in connection with supplier failure or delays arising from coronavirus-related issues. As such, a reminder of the law in this area now also feels appropriate.

Beware of Quincecare: update from Supreme Court
  • United Kingdom
  • 10 February 2020

In 2018 the Court of Appeal rejected a stockbrocker's appeal against the High Court's decision that it owed a client a Quincecare duty. In a recent ruling, the Supreme Court upheld the Court of Appeal's decision. The client's Quincecare claim was held not to have been defeated by illegality as, in the circumstances, the fraud of a sole shareholder of a company should not be attributed to the company itself.

Collapse of Thomas Cook: BEIS letter of recommendations
  • United Kingdom
  • 03 February 2020

In November 2019, in the looming shadow of the collapse of Thomas Cook Group plc, the Business, Energy and Industrial Strategy (BEIS) Committee published a letter of recommendations to Secretary of State for the Department of BEIS Andrea Leadsom. The letter follows BEIS's inquiry into the collapse of Thomas Cook and the factors that led to the global travel group's downfall and covers a range of recommendations relating to corporate governance, audit reform and executive pay and bonuses.