The Respondent had loaned monies to Ramblas Investments BV (“the company”). The loans were subordinated to the company’s borrowings from its bank. The Respondents also created third party security to secure the company’s bank borrowings. The security assets included the Respondents’ rights to repayment of their loans.
The bank appointed receivers of the security assets. The Respondents were required by the security agreement to take whatever steps the bank required in order to perfect the security or facilitate its realisation. The security agreement was subject to English law and jurisdiction.
A Spanish insolvency administrator was subsequently appointed and funds were available for a distribution. The Spanish insolvency administrator had, however, concluded that the bank loan and the Respondents loans should rank pari passu. Although the bank’s assignees were challenging this decision in Spain, the Receivers also sought a declaration in England that any monies available to repay the Respondents’ loans, should be paid to the Receivers.
The Court was satisfied that, under the security arrangements, the distribution should be paid to the Receivers. Given the many disputes between the potential beneficiaries it was appropriate to give declaratory relief to give the parties certainty, at least as a matter of English law.
The Court also granted a mandatory injunction requiring the Respondents to provide notarised confirmation to the Spanish insolvency administrator that the distribution should be paid to the Receivers.
The case provides interesting guidance on where the Courts will exercise their discretion to provide declaratory relief to give parties certainty.
Beveridge and MacKellar –v- Quinlan and others  EWHC 424 (Ch)