Bridgehouse (Bradford No.2) v BAE Systems Plc

Bridgehouse (Bradford No.2) v BAE Systems Plc

Section 1028(1) Companies Act 2006 does not retrospectively invalidate a contractual termination exercised during a company's dissolution where the termination is not an automatic consequence of dissolution but a discretionary act by a counterparty. The deeming provision does not extend to undoing valid third-party acts taken in reliance on the company's status. The Arbitrator was correct to conclude that BAE's termination of the Agreement stands and is not retrospectively undone by BB2's restoration to the register.

Parties
Claimant: Bridgehouse (Bradford No.2); Defendant: BAE Systems PLC
Jurisdiction
England and Wales
Judgment Date
11 July 2019
Procedural Posture
Commercial Arbitration Appeal / Judgment on Appeal Under Section 69 of the Arbitration Act 1996
Outcome
Appeal dismissed; Arbitrator's decision upheld.
Legal Topics
Effect of Administrative Restoration of Companies, Contractual Termination Rights, Interpretation of Deeming Provisions, Section 1028 Companies Act 2006, Contracting Out of Statutory Provisions
Company Law Contract Law Arbitration Effect of Administrative Restoration of Companies Contractual Termination Rights Interpretation of Deeming Provisions Section 1028 Companies Act 2006 Contracting Out of Statutory Provisions

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Parties

Bridgehouse (Bradford No.2)

Claimant

BAE Systems PLC

Defendant

Procedural Posture

Commercial Arbitration Appeal / Judgment on Appeal Under Section 69 of the Arbitration Act 1996

Legal Issues

  1. 1 Does section 1028(1) Companies Act 2006 retrospectively invalidate a contractual termination exercised during a company's dissolution?
  2. 2 Can parties contract out of the effect of section 1028(1)?
  3. 3 Did an Event of Default arise immediately upon the company being struck off the register under the contract?

Ratio Decidendi

Section 1028(1) Companies Act 2006 does not retrospectively invalidate a contractual termination exercised during a company's dissolution where the termination is not an automatic consequence of dissolution but a discretionary act by a counterparty. The deeming provision does not extend to undoing valid third-party acts taken in reliance on the company's status. The Arbitrator was correct to conclude that BAE's termination of the Agreement stands and is not retrospectively undone by BB2's restoration to the register.

Court Disposition

Appeal dismissed; Arbitrator's decision upheld.