Anna Boase KC and Joyce Arnold acted successfully at an expedited trial for the holder of bonds issued to fund the business of a luxury hotel and casino near Cannes: Catbalogan Holdings S.à r.l. v Unik Bond S.A. [2025] EWHC 2673 (Ch)
The bonds, worth €43m and secured (among other things) by a French law trust arrangement, matured without payment. 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.
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.
On behalf of the bondholder, in June 2025 Anna and Joyce obtained urgent ex parte injunctive relief in the High Court requiring the parties to seek an adjournment of that hearing (to November 2025) and their client issued a claim to enforce the promises.
Mr Justice Fancourt upheld the bondholder’s commercial bargain, rejecting construction arguments which sought to avoid the consequence that the right to challenge enforcement had been compromised. He also rejected an argument that the bondholder had no standing to claim on the alleged basis that the transfer agreement by which it had acquired the bonds was not “substantially in the form” of a contractually provided model agreement.
Mr Justice Fancourt granted declaratory relief and an injunction requiring the withdrawal of the proceedings before the Tribunal de Commerce.
Of potential wider interest is the Judge’s analysis on the following points:
- An obligation to “co-operate fully” included an obligation not to derogate from enforcement action in any way after it had been taken.
- The phrase “agree and acknowledge”, often found in a contractual estoppel, was not necessarily limited to having such an effect. The meaning depended upon the substance.
- An “agreement and acknowledgment” that something shall not be “contested or prevented” did not have effect only as a contractual estoppel; it created a binding obligation not to contest and not to prevent the stated things.
- The contract used sufficiently clear words to provide for a wide “irrevocable release” of claims. It was the natural reading and made commercial sense; this broad release was the “price” of a last chance to refinance and discharge the debt.
- Whether a form or contract is “substantially in the form of” a model form or contract depends upon its purpose; it requires an assessment of whether the changes impaired in any material way the functions that the document was intended to perform.
Anna Boase KC and
Joyce Arnold acted for the successful claimant, Catbalogan Holdings S.à r.l., instructed by Clifford Chance LLP.