Anna Boase KC and Joyce Arnold acted successfully for the respondent bondholder on an expedited appeal: Unik Bond S.A. v Catbalogan Holdings S.à r.l. [2025] EWCA Civ 1594
The bonds, worth €43m, had been issued to fund the business of a luxury hotel and casino near Cannes, and were secured (among other things) by a French law trust arrangement. In a contract subject to English law and jurisdiction, the bondholder agreed to a standstill of enforcement in exchange for an acknowledgment that there had been Events of Default and promised to “cooperate fully” with enforcement action and not to “contest, or seek to contest, or otherwise prevent” the exercise of security rights, as well as giving an “irrevocable release” of rights or claims in this regard. Those promises were given by the issuers of the bonds, as well as Unik Bond S.A. (“Unik”), which was at the time a parent of the issuers.
When the standstill expired without repayment, the bondholder enforced the security, taking control of the hotel and replacing the management. The bondholder’s enforcement action was immediately challenged in the Tribunal de Commerce in Paris, which listed the matter for final hearing in a matter of days.
In June 2025, Anna and Joyce obtained urgent ex parte injunctive relief in the High Court requiring Unik to seek an adjournment of the Paris hearing. Ultimately the final hearing in Paris was adjourned until an expedited trial could take place in the Financial List in London, and earlier this term Anna and Joyce were successful in that expedited trial before Fancourt J.
Unik then appealed, and the Court of Appeal listed a hearing on an expedited basis. Judgment was given by Lewison, Arnold and Miles LJJ in a matter of days, with the lead judgment of Lewison LJ (with whom the rest of the panel agreed) comprehensively dismissing the appeal and upholding Fancourt J’s judgment. As a result, Unik must now withdraw the proceedings it instigated in Paris.
Of potential wider interest is Lewison LJ’s analysis on the following points:
- The emphatic rejection of Unik’s submission that, for a contractual promise to be construed as giving up a party’s right to sue, the language must admit of no other meaning.
- The phrase “agree and acknowledge”, often found in a contractual estoppel, was not limited to having such an effect. The meaning depended upon the substance of the clause.
- The importance of the commercial purpose of a promise not to challenge enforcement: requiring the bondholder to first show that the enforcement was based on the correct interpretation of the security documents would “deprive the clause of any real commercial utility”, which was a “bizarre conclusion”.
- An express agreement to co-operate fully in achieving result X includes an obligation not to do anything that would impede the achievement of result X.
Anna Boase KC and Joyce Arnold acted for the successful respondent, Catbalogan Holdings S.à r.l., instructed by Clifford Chance LLP.