Tenacity Marine Inc v NOC Swiss LLC [2020] EWHC 3689 (Comm) (22 December 2020)

Tenacity Marine Inc v NOC Swiss LLC [2020] EWHC 3689 (Comm) (22 December 2020)

GP failed to discharge the burden of proving impossibility to comply with the mandatory orders. The evidence was inconsistent, incomplete, and did not establish that compliance was financially or legally impossible. GP did not approach its lenders for support, despite their clear commercial interest in the restructuring, and the existence of pari passu charges did not preclude compliance. The orders must remain in place.

Citation
[2020] EWHC 3689 (Comm)
Parties
Claimant: Tenacity Marine Inc.; Defendant: NOC Swiss LLC
Jurisdiction
England and Wales
Judgment Date
22 December 2020
Procedural Posture
Commercial Court Proceedings (applications to Discharge Mandatory Orders) / Hearing of Defendant's Application to Discharge Mandatory Orders Enforcing Letters of Indemnity
Outcome
Application to discharge mandatory orders refused.
Legal Topics
Letters of Indemnity, Mandatory Orders, Impossibility of Performance, Corporate Insolvency, Secured Creditors, Trade Finance, Jurisdiction Clauses
Commercial Law Shipping Law Insolvency Law Letters of Indemnity Mandatory Orders Impossibility of Performance Corporate Insolvency Secured Creditors +2 more

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Parties

Tenacity Marine Inc.

Claimant

NOC Swiss LLC

Defendant

Procedural Posture

Commercial Court Proceedings (applications to Discharge Mandatory Orders) / Hearing of Defendant's Application to Discharge Mandatory Orders Enforcing Letters of Indemnity

Legal Issues

  1. 1 Whether the defendant (GP) has established financial or legal impossibility to comply with mandatory orders enforcing letters of indemnity
  2. 2 Whether UAE law or insolvency prevents compliance with English court orders
  3. 3 Whether secured creditors' interests preclude use of assets to satisfy claimants' demands under letters of indemnity

Ratio Decidendi

GP failed to discharge the burden of proving impossibility to comply with the mandatory orders. The evidence was inconsistent, incomplete, and did not establish that compliance was financially or legally impossible. GP did not approach its lenders for support, despite their clear commercial interest in the restructuring, and the existence of pari passu charges did not preclude compliance. The orders must remain in place.

Court Disposition

Application to discharge mandatory orders refused.

Orders

  • Mandatory orders enforcing the letters of indemnity remain in force.
  • GP is required to comply with the existing orders.