United Kingdom updates

Arbitration & ADR

Contributed by Clifford Chance
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.

High Court upholds stay of winding-up petition where debt was subject to arbitration agreement
  • United Kingdom
  • 01 October 2020

The High Court recently upheld an order that a petitioner should be restrained from proceeding with a winding-up petition on the basis that the petition debt in question was disputed by the alleged debtor and was subject to an arbitration agreement. The decision provides assurance that in the context of a winding-up petition, the court will consider the merits of a dispute relating to a petition debt which is subject to an arbitration agreement only in rare circumstances.

High Court clarifies procedure for registration and enforcement of ICSID awards
  • United Kingdom
  • 13 August 2020

The High Court recently confirmed that the procedure for the registration and enforcement of an award made pursuant to the International Centre for the Settlement of Investment Disputes (ICSID) Convention does not require service of the claim form. The court upheld an order dispensing with service on a state of an order for the enforcement of an ICSID award. In addition, the court upheld an order for alternative service against the state.

High Court rejects challenge to enforcement where defences were already raised before foreign court
  • United Kingdom
  • 02 July 2020

The High Court recently dismissed a challenge to a previous decision to grant permission to enforce a Stockholm Chamber of Commerce award on the basis that contrary to the defendant's contention, there was a valid arbitration agreement between the parties and the defendant's arguments as to procedural irregularity had previously been raised in Swedish court proceedings, thereby giving rise to an issue estoppel.


Aviation

Contributed by Vedder Price PC
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.

Court of Appeal decision on economic duress in aviation market
  • United Kingdom
  • 28 August 2019

A recent Court of Appeal decision regarding a claim of economic duress against an airline reinforced the fundamental importance of ensuring contractual clarity and certainty as a matter of English law. For companies operating in the aviation sector, where there may be an unequal power dynamic, parties will be unable to look to economic duress to undo a lop-sided bargain unless there is some unlawful action or provable bad faith on the part of the party with greater power.

Aircraft Purchase Fleet Limited sought $260 million in damages from Compagnia Aerea Italia
  • United Kingdom
  • 20 February 2019

In a recent High Court Case, Aircraft Purchase Fleet Limited (APFL) sought $260 million in damages from Compagnia Aerea Italia (CAI) for an alleged repudiatory breach of a framework agreement under which CAI had agreed to lease certain new Airbus A320 family aircraft. APFL had agreed to buy these aircraft from Airbus. However, CAI argued that it had become impossible for either party to perform the framework agreement following Airbus' termination of its obligations to sell aircraft to APFL.


Banking & Financial Services

Contributed by Latham & Watkins LLP
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
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.

Investment planning: factoring in UK merger control regime
  • United Kingdom
  • 29 August 2019

The acquisition of a minority shareholding (which satisfies the jurisdictional criteria under the UK merger control regime) without obtaining clearance presents a range of legal and commercial risks for parties, including that the Competition and Markets Authority could ultimately order the acquisition to be undone. This article highlights some ways for parties to identify and understand the extent of the risks of an acquisition.


Corporate & Commercial

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.

Good faith and relational contracts
Fieldfisher LLP
  • United Kingdom
  • 18 November 2019

In two recent cases, the English courts considered whether the duty of good faith should be implied into commercial contracts. These cases demonstrate that the issue of good faith is evolving in English law. Parties to relational contracts must therefore monitor developments to ensure that foreseeable risks are mitigated effectively in their contracts and commercial practices.

Will director-shareholders always be liable to repay unlawful dividends?
  • United Kingdom
  • 19 August 2019

A series of recent cases have examined the circumstances in which a dividend can be challenged on the basis that it has been unlawfully paid. In one such case, the High Court considered a number of key principles regarding dividend payments and the circumstances in which directors can be pursued for dividends paid prior to an insolvency. This judgment provides some comfort to directors who rely on professional advisers to determine whether to declare a dividend payment.