Elektrim SA v Vivendi Holdings 1 Corp [2008] EWCA Civ 1178 (24 October 2008)

Elektrim SA v Vivendi Holdings 1 Corp [2008] EWCA Civ 1178 (24 October 2008)

The no-action clause in the Trust Deed and Bond Conditions applies to all claims, whether framed in contract or tort, that in substance seek to enforce rights as a bondholder or vindicate rights under the bonds. The Florida proceedings by Vivendi Holdings 1 Corp were, in substance, proceedings to enforce the provisions of the Trust Deed and Bond Conditions and thus fell within the contractual prohibition. The anti-suit injunctions granted by the High Court were appropriate to restrain VH1 from pursuing the Florida proceedings in breach of the no-action clause.

Citation
[2008] EWCA Civ 1178
Parties
Respondent/claimant: Elektrim S.A.; Respondent/claimant: Law Debenture Trust Corporation PLC; Appellant/defendant: Vivendi Holdings 1 Corp
Jurisdiction
England and Wales
Judgment Date
24 October 2008
Procedural Posture
Appeal From High Court (chancery Division) / Court of Appeal Judgment
Outcome
Appeal dismissed; anti-suit injunctions upheld.
Legal Topics
No Action Clauses, Bondholder Rights, Anti Suit Injunctions, Trustee Powers, Fraudulent Misrepresentation, Jurisdiction, Enforcement of Security, Bankruptcy Proceedings
Commercial Law Banking and Finance Conflict of Laws No Action Clauses Bondholder Rights Anti Suit Injunctions Trustee Powers Fraudulent Misrepresentation +3 more

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Parties

Elektrim S.A.

Respondent/claimant

Law Debenture Trust Corporation PLC

Respondent/claimant

Vivendi Holdings 1 Corp

Appellant/defendant

Procedural Posture

Appeal From High Court (chancery Division) / Court of Appeal Judgment

Legal Issues

  1. 1 Does the no-action clause in the Trust Deed and Bond Conditions bar individual bondholders from bringing proceedings against the issuer/guarantor except in specified circumstances?
  2. 2 Are the Florida proceedings by Vivendi Holdings 1 Corp in breach of the no-action clause?
  3. 3 Should anti-suit injunctions be granted to restrain foreign proceedings in breach of the no-action clause?

Ratio Decidendi

The no-action clause in the Trust Deed and Bond Conditions applies to all claims, whether framed in contract or tort, that in substance seek to enforce rights as a bondholder or vindicate rights under the bonds. The Florida proceedings by Vivendi Holdings 1 Corp were, in substance, proceedings to enforce the provisions of the Trust Deed and Bond Conditions and thus fell within the contractual prohibition. The anti-suit injunctions granted by the High Court were appropriate to restrain VH1 from pursuing the Florida proceedings in breach of the no-action clause.

Court Disposition

Appeal dismissed; anti-suit injunctions upheld.

Orders

  • Anti-suit injunction restraining Vivendi Holdings 1 Corp from continuing Florida proceedings upheld.
  • Declaration that Vivendi Holdings 1 Corp was in breach of the no-action clause by commencing the Florida proceedings.