Cassini SAS v Emerald Pasture Designated Activity Company & Ors [2022] EWCA Civ 102 (04 February 2022)

Cassini SAS v Emerald Pasture Designated Activity Company & Ors [2022] EWCA Civ 102 (04 February 2022)

The Court of Appeal held that, under French law, non-monetary covenants in a non-ongoing contract (such as information and access covenants in a loan agreement) remain enforceable against a debtor in safeguard proceedings during the observation period, subject to the statutory moratorium on monetary claims and other express derogations. The asserted 'Enforceability Principle' was not established in French law, and the High Court judge was entitled to prefer the evidence of Dr. Dammann over Professor Le Corre. The information covenants in the Senior Facilities Agreement continued to bind Cassini during the observation period.

Citation
[2022] EWCA Civ 102
Parties
Appellant/first Defendant: Cassini SAS; Respondent/claimant: Emerald Pasture Designated Activity Company; Respondent/claimant: Emerald Moor Designated Activity Company; Respondent/claimant: Trinity Investments Designated Activity Company; Respondent/second Defendant: GLAS SAS
Jurisdiction
England and Wales
Judgment Date
04 February 2022
Procedural Posture
Appeal (civil) / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal dismissed
Legal Topics
Enforceability of Contractual Covenants During Insolvency, Interpretation of French Insolvency Law in English Courts, Application of Pacta Sunt Servanda in Insolvency, Moratorium on Enforcement of Claims, Cross Border Insolvency Recognition
Insolvency Law Contract Law Private International Law Enforceability of Contractual Covenants During Insolvency Interpretation of French Insolvency Law in English Courts Application of Pacta Sunt Servanda in Insolvency Moratorium on Enforcement of Claims Cross Border Insolvency Recognition

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Parties

Cassini SAS

Appellant/first Defendant

Emerald Pasture Designated Activity Company

Respondent/claimant

Emerald Moor Designated Activity Company

Respondent/claimant

Trinity Investments Designated Activity Company

Respondent/claimant

GLAS SAS

Respondent/second Defendant

Procedural Posture

Appeal (civil) / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether non-monetary covenants in a non-ongoing contract (loan agreement) remain enforceable against a debtor in French safeguard proceedings during the observation period
  2. 2 Whether French insolvency law contains an 'Enforceability Principle' rendering non-ongoing contracts unenforceable upon opening of safeguard proceedings
  3. 3 Whether the English court should accept the evidence of one French law expert over another regarding the effect of safeguard proceedings on contractual obligations

Ratio Decidendi

The Court of Appeal held that, under French law, non-monetary covenants in a non-ongoing contract (such as information and access covenants in a loan agreement) remain enforceable against a debtor in safeguard proceedings during the observation period, subject to the statutory moratorium on monetary claims and other express derogations. The asserted 'Enforceability Principle' was not established in French law, and the High Court judge was entitled to prefer the evidence of Dr. Dammann over Professor Le Corre. The information covenants in the Senior Facilities Agreement continued to bind Cassini during the observation period.

Court Disposition

Appeal dismissed

Orders

  • The appeal by Cassini SAS is dismissed.
  • The information and access covenants in the Senior Facilities Agreement remain enforceable against Cassini during the observation period of the French safeguard procedure.