Lornamead Acquisitions Ltd v Kaupthing Bank HF

Lornamead Acquisitions Ltd v Kaupthing Bank HF

The English proceedings are not barred by the Icelandic insolvency regime because, following Rawlinson, Kaupthing was not subject to an EEA insolvency measure at the time the claim was issued. Even if that decision is overturned, Regulation 5(1) would require a stay, not a strike out. The dispute falls within the English jurisdiction clauses as it concerns the construction and effect of English law-governed agreements at the commercial centre of the transaction, not the Hedging Confirmations. There is no basis for a stay on forum non conveniens or case management grounds given the parties' express agreement to English jurisdiction.

Parties
Claimant/respondent: Lornamead Acquisitions Limited; Defendant/applicant: Kaupthing Bank HF
Jurisdiction
England and Wales
Judgment Date
18 October 2011
Procedural Posture
Commercial Court Jurisdictional Dispute / Ruling on Application to Strike Out or Stay Proceedings
Outcome
Application to strike out or stay dismissed
Legal Topics
Cross Border Insolvency, Jurisdiction Clauses, Recognition of Foreign Insolvency Proceedings, Forum Non Conveniens, Declaratory Relief
Insolvency Law Banking Law Conflict of Laws Contract Law Cross Border Insolvency Jurisdiction Clauses Recognition of Foreign Insolvency Proceedings Forum Non Conveniens +1 more

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Parties

Lornamead Acquisitions Limited

Claimant/respondent

Kaupthing Bank HF

Defendant/applicant

Procedural Posture

Commercial Court Jurisdictional Dispute / Ruling on Application to Strike Out or Stay Proceedings

Legal Issues

  1. 1 Whether the English proceedings should be stayed or struck out due to Icelandic insolvency proceedings under the 2004 Regulations and the 2001 Directive
  2. 2 Whether the English Court or Icelandic Court has exclusive jurisdiction under the Lugano Convention
  3. 3 Whether the proceedings should be stayed on forum non conveniens or case management grounds

Ratio Decidendi

The English proceedings are not barred by the Icelandic insolvency regime because, following Rawlinson, Kaupthing was not subject to an EEA insolvency measure at the time the claim was issued. Even if that decision is overturned, Regulation 5(1) would require a stay, not a strike out. The dispute falls within the English jurisdiction clauses as it concerns the construction and effect of English law-governed agreements at the commercial centre of the transaction, not the Hedging Confirmations. There is no basis for a stay on forum non conveniens or case management grounds given the parties' express agreement to English jurisdiction.

Court Disposition

Application to strike out or stay dismissed

Orders

  • Kaupthing’s application to strike out or stay the English proceedings is dismissed
  • Kaupthing granted leave to appeal on Issue 1