Fortenova Grupa DD v LLC Shushary Holding & Ors [2023] EWHC 1165 (Ch) (12 May 2023)

Fortenova Grupa DD v LLC Shushary Holding & Ors [2023] EWHC 1165 (Ch) (12 May 2023)

Where payment of a debt is prevented by operation of law (sanctions), the obligor is not in default and is not liable for default interest; the court may order payment into court to effect redemption and release of security, even where the secured assets are located abroad, provided the underlying contract is governed by English law.

Citation
[2023] EWHC 1165 (Ch)
Parties
Claimant: Fortenova Grupa d.d.; First Defendant: LLC Shushary Holding; Second Defendant: Kroll Agency Services Limited; Third Defendant: Kroll Trustee Services Limited; Fourth Defendant: Kroll Issuer Services Limited; Fifth Defendant: MP 2019 PGU Holdings Lux SARL; Sixth Defendant: Banque Pictet & Cie SA
Jurisdiction
England and Wales
Judgment Date
12 May 2023
Procedural Posture
Part 8 Claim (expedited Trial) / Judgment at First Instance
Outcome
Claim allowed
Legal Topics
Redemption of Loan Notes, Payment Into Court, Sanctions Compliance, Default Interest, Security Release, Jurisdiction, Interpretation of Contract Clauses
Banking and Finance Sanctions Law Contract Law Equity Redemption of Loan Notes Payment Into Court Sanctions Compliance Default Interest +3 more

Case Brief

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Parties

Fortenova Grupa d.d.

Claimant

LLC Shushary Holding

First Defendant

Kroll Agency Services Limited

Second Defendant

Kroll Trustee Services Limited

Third Defendant

Kroll Issuer Services Limited

Fourth Defendant

MP 2019 PGU Holdings Lux SARL

Fifth Defendant

Banque Pictet & Cie SA

Sixth Defendant

Procedural Posture

Part 8 Claim (expedited Trial) / Judgment at First Instance

Legal Issues

  1. 1 Whether the claimant can redeem loan notes held by a sanctioned entity by payment into court
  2. 2 Whether default interest is payable when payment is prevented by sanctions
  3. 3 Whether the English court has jurisdiction to order release of security over foreign assets

Ratio Decidendi

Where payment of a debt is prevented by operation of law (sanctions), the obligor is not in default and is not liable for default interest; the court may order payment into court to effect redemption and release of security, even where the secured assets are located abroad, provided the underlying contract is governed by English law.

Court Disposition

Claim allowed

Orders

  • The Company is permitted to redeem the Shushary notes by paying the redemption amount into court.
  • Shushary has liberty to apply for payment out of court funds upon evidence of lawfulness under sanctions regimes.