Circumventing an English court order by relying on legal rights in another jurisdiction

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An English court order did not have its intended effect; in light of the defendants seeking to reserve any rights they may have under Spanish law to monies, the High Court determined, was payable to the receivers.

The defendants loaned monies to Ramblas Investments BV (“Ramblas”). Ramblas, subsequently, entered into an insolvency process in Spain and sufficient funds were available for a distribution to creditors. The court was satisfied that, under the security arrangements, any distribution made in relation to those loans should be paid to the receivers, and ordered the defendants to provide a notarised confirmation to this effect.

The defendants provided the notarised confirmation. However, contrary to the court order, the defendants sent an e-mail to the receivers where they asked Ramblas’s Insolvency Administrator to ignore the notarised confirmation if, as a matter of Spanish law, the distributions should be made directly to the defendants rather than to the receivers. As such, the receivers were unable to advise Ramblas’s Insolvency Administrator that monies otherwise payable to the defendants should be paid to them, and referred the matter to court.

The court confirmed:

  • The defendants should have raised arguments relating to interference with Spanish law at the first trial. That was when the court considered the extent of the parties’ respective rights and obligations under the security agreement, together with the orders that should be made to give effect to them.
  • It was too late and an abuse of process for the defendants to seek to raise such points at this hearing. Given that, the time to appeal the court order or seek a review of it, had passed.

The court, therefore, exercised its discretion to ensure its original order had its intended effect.

Beveridge and MacKellar –v- Quinlan and others [2019] EWHC 1411 (Ch)

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