Law Debenture Trust Corporation Plc v Acciona SA & Ors

Law Debenture Trust Corporation Plc v Acciona SA & Ors

The suspension of the Bondholder Nominated Director in breach of Condition 10(d) is a breach of Condition 12(ii) that is self-evidently materially prejudicial to the interests of the Bondholders. The Trustee can certify material prejudice without further investigation, as the deprivation of board representation and veto rights is itself materially prejudicial.

Parties
Claimant: The Law Debenture Trust Corporation PLC; Defendant: Acciona S.A.; Defendant: Concord Trust; Defendant: Mizuho International PLC
Jurisdiction
England and Wales
Judgment Date
18 February 2004
Procedural Posture
Part 8 Claim (construction of Trust Deed) / Judgment on Application for Directions
Outcome
Application granted
Legal Topics
Trustee Powers and Duties, Events of Default, Bondholder Rights, Interpretation of Trust Instruments
Trusts Banking and Finance Contract Trustee Powers and Duties Events of Default Bondholder Rights Interpretation of Trust Instruments

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Parties

The Law Debenture Trust Corporation PLC

Claimant

Acciona S.A.

Defendant

Concord Trust

Defendant

Mizuho International PLC

Defendant

Procedural Posture

Part 8 Claim (construction of Trust Deed) / Judgment on Application for Directions

Legal Issues

  1. 1 Whether the suspension of the Bondholder Nominated Director constitutes a materially prejudicial breach under Condition 12(ii) of the Trust Deed
  2. 2 Whether the Trustee can certify material prejudice without further factual investigation

Ratio Decidendi

The suspension of the Bondholder Nominated Director in breach of Condition 10(d) is a breach of Condition 12(ii) that is self-evidently materially prejudicial to the interests of the Bondholders. The Trustee can certify material prejudice without further investigation, as the deprivation of board representation and veto rights is itself materially prejudicial.

Court Disposition

Application granted

Orders

  • Declaration that the suspension of the Bondholder Nominated Director is a materially prejudicial breach under Condition 12(ii) of the Trust Deed
  • Trustee may certify material prejudice without further investigation