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Landmark Decision in Silverpail Examinership

In the first case of its kind since Re Business City Limited ([1997] 2 BCLC 510) in 1997, and only the second ever such case, the High Court of England and Wales made an order on 5 April 2023 recognising and giving the force of law in England and Wales to a scheme of arrangement in an Irish examinership. The High Court of Northern Ireland made a similar order in the same case on 3 April 2023.

The scheme of arrangement was confirmed by Mr Justice Quinn in the Irish High Court on 31 March 2023 and the recognition and enforcement orders were granted pursuant to letters of request by the Irish High Court to the High Courts of England and Wales and Northern Ireland.

The order was made under section 426 of the United Kingdom Insolvency Act 1986, for the purposes of which Ireland is a "relevant territory" pursuant to the Co-operation of Insolvency Courts (Designation of Relevant Countries and Territories) Order 1986. Such orders were not generally necessary prior to Brexit as orders in respect of companies in examinership having their centres of main interests in Ireland were recognised automatically by virtue of the European Insolvency Regulation (Council regulation (EC) No 1346/2000 and, subsequently, regulation (EU) 2015/848 of the European Parliament and of the Council). Ireland is one of a limited number of countries and the only EU member state that is entitled to avail of the judicial assistance provisions of section 426 of the United Kingdom Insolvency Act 1986. 

The company in this case, Silverpail Dairy (Ireland) Unlimited Company, had creditors and supplied to parties in the United Kingdom and hence, in order to ensure that all such parties were bound by the cram down effected by the scheme of arrangement, the orders of the courts in those relevant jurisdictions were required.  

If you would like to discuss this in more detail please contact Tony O'Grady, Litigation Partner at Matheson, any member of the Commercial Litigation and Dispute Resolution Group or your usual contact at Matheson.