United Kingdom updates

Arbitration & ADR

Contributed by Clifford Chance
Clarity over English court's jurisdiction to grant anti-arbitration injunction against foreign-seated arbitrations
  • United Kingdom
  • 26 September 2019

The Court of Appeal has partly upheld, and partly dismissed, an injunction granted by the High Court to restrain an arbitration seated in Lebanon. In so doing, the Court of Appeal has confirmed the English court's power to grant anti-arbitration injunctions pursuant to Section 37(1) of the Senior Courts Act 1981 in respect of a foreign-seated arbitration where the dispute does not fall within the scope of the arbitration agreement and the proceedings are, or would therefore be, vexatious and oppressive.

High Court considers governing law of arbitration agreement and enforcement against non-parties
  • United Kingdom
  • 01 August 2019

The High Court recently granted an application for the adjournment of an arbitral award, pending the outcome of a challenge before the Paris Court of Appeal by a non-party to the arbitration agreement. The case provides a cautionary tale of the delays and additional costs that may be incurred if claimants fail to consider careful compliance with provisions on variations during the term of a contract and (at the outset of a dispute) which parties should be named as defendants.

Court grants third party access to confidential arbitration documents for disciplinary proceedings against arbitrator
  • United Kingdom
  • 30 May 2019

A recent High Court decision concerning access to confidential documents illustrates the limits to the implied duty of confidentiality arising out of arbitration proceedings in English law. While the court was supportive of the general principle that arbitration proceedings are to be treated as confidential, it also demonstrated its willingness to depart from this general principle should one of the identified exceptions apply.

Court upholds tribunal's jurisdiction over settlement agreement lacking express arbitration clause
  • United Kingdom
  • 11 April 2019

The High Court recently found that a tribunal had jurisdiction over a dispute that arose from a settlement agreement lacking an express arbitration clause. The decision serves as a reminder of the delays and additional costs that may be incurred if an agreement is unclear as to the applicable dispute resolution mechanism. Parties can reduce the risks of such delays and costs by including an express dispute resolution clause in settlement agreements.

Enforcement of arbitral award against sovereign state requires service through diplomatic channels
  • United Kingdom
  • 07 March 2019

The High Court recently considered whether service of formal court documentation on a state party is a necessary requirement when seeking to enforce an arbitral award against it or whether service can be dispensed with. The courts' unique approach to disputes involving state defendants is shaped not only by the applicable statutes, such as the State Immunity Act 1978, but also by the diplomatic considerations that feature prominently in investor-state cases.


Aviation

Contributed by Vedder Price LLP
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.

Drones – the rise of the Basic Regulation
  • United Kingdom
  • 03 October 2018

In July 2017 the government released proposals to regulate the use of drones in the United Kingdom. Since then, the regulation of drones has been transferred to the European Union and now falls under the EU Basic Regulation. Many of the UK government's proposals for drone operators are included in the EU Basic Regulation, which sets the groundwork for establishing rules that will require operators of drones that weigh 250kg and above to register them and ensure that they are marked for identification.

Slots can be traded for value even after insolvency
  • United Kingdom
  • 16 May 2018

Monarch Airlines Limited's administrators have won an appeal with the Court of Appeal regarding Monarch's rights in and to certain 'slots' at Luton and Gatwick airports after it went into administration. The case is significant, as it reaffirms the value ascribed to slots by airlines and their financiers as rights of the airline and the fact that, as a result, they can be traded for value even after insolvency.

Operating lessor financings: structural overview
  • United Kingdom
  • 28 March 2018

With competition among aircraft lessors remaining fierce, airlines are taking an increasing proportion of aircraft on operating leases. The 'wholesaling' of debt financing – where the primary recourse entity on financings is the lessor rather than the airline – is an important recent trend in the aircraft financing market that is likely to continue. Aircraft financiers should be aware of the structural items to consider in executing operating lessor financings and the pitfalls to be avoided.


Banking

Contributed by Allen & Overy LLP
EUR wrong: when sterling means euros
  • United Kingdom
  • 18 January 2019

The High Court recently used interpretation rather than rectification to fix an unhappily drafted loan agreement for "Seven Million Five Hundred Pounds [sic] (£7,500,000) to be drawn down in Euros". The dispute concerned whether the amount owed was in sterling or euros.

Three strikes and you're out – bank's duty to make inquiries of suspicious transactions
  • United Kingdom
  • 07 December 2018

A first-instance court recently considered the extent to which a bank's duty of care owed to its customers, co-existing in contract and tort, requires the bank to make inquiries of suspicious transactions in their bank accounts. The court found in favour of the bank on the basis of expiry of the relevant limitation period. This article focuses on the court's discussion, by way of obiter, of the bank's duty of care owed to its customers where suspicious transactions occur.

Redressing the balance: banks owe no contractual duty to customers in respect of regulator-mandated reviews
  • United Kingdom
  • 19 October 2018

A recent decision gave Court of Appeal endorsement to a raft of similar first-instance decisions regarding banks' contractual duties to customers in respect of regulator-mandated reviews. The decision provides helpful comfort for banks when agreeing remedial action with the Financial Conduct Authority that they ought not to be exposing themselves to private actions from customers in respect of their review, provided that third-party rights are excluded.


Capital Markets

Listing sovereign-controlled companies in the United Kingdom
  • United Kingdom
  • 11 December 2018

The listing regime for the United Kingdom's Official List is divided into premium and standard listing segments. For admittance to the premium listing segment, an issuer must meet higher UK-specific standards that are intended to provide additional investor protection and promote shareholder confidence. The UK Financial Conduct Authority recently introduced a new category, but issuers have yet to avail themselves of the new regime.

New IPO process in practice: emerging trends?
Davis Polk & Wardwell LLP
  • United Kingdom
  • 20 November 2018

The Financial Conduct Authority recently implemented changes to the initial public offer (IPO) regime that have had a fundamental impact on the process of conducting an IPO in the United Kingdom. Companies including Aston Martin and Funding Circle have had to negotiate these new rules in practice over the past few months and certain trends are now beginning to emerge.


Company & Commercial

Contributed by Squire Patton Boggs
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.

Directors' remuneration – new draft regulations
  • United Kingdom
  • 20 May 2019

The draft Companies (Directors' Remuneration Policy and Directors' Remuneration Report) Regulations 2019 were recently published as part of the drive to encourage long-term shareholder engagement and to strengthen the governance and performance of traded companies. Most of the directors' remuneration reporting requirements inserted by the EU Shareholder Rights Directive II already apply under UK law and the draft regulations will implement most of the requirements that do not currently apply.

PLSA Corporate Governance Policy and Voting Guidelines 2019
  • United Kingdom
  • 11 February 2019

The Pensions and Lifetime Savings Association recently published guidance on market best practice to assist its members when exercising their vote at annual general meetings in 2019. The revised version of its Corporate Governance Policy and Voting Guidelines reflects the introduction of the 2018 UK Corporate Governance Code, which applies to financial years beginning on or after 1 January 2019.

When is a decision to declare an interim dividend a decision?
  • United Kingdom
  • 28 January 2019

Small businesses often structure payments to directors who are also shareholders using a combination of dividend payments and salaries. At a time when corporate governance and director and shareholder accountability are under review, a recent Court of Appeal decision gives more reason for directors to ensure that they understand not only their obligations and duties as directors under the Companies Act 2006, but also the implications of relying solely on advice without evaluating it first.