Saipem SpA & Ors v Petrofac Limited & Anor

Saipem SpA & Ors v Petrofac Limited & Anor

The judge's exercise of discretion to sanction the restructuring plans was vitiated by material error in accepting, without adequate evidence, that the allocation of equity to new money providers reflected competitive market terms. The Plan Companies failed to justify the excessive returns as a cost rather than a...

Source-derived case information.

Parties
Appellant: Saipem S. P. A.; Appellant: Saipem Singapore Pte Ltd; Appellant: Samsung E&A Co., Ltd; Appellant: Samsung E&A (Thailand) Co., Ltd; Respondent: Petrofac Limited; Respondent: Petrofac International (UAE) LLC
Jurisdiction
England and Wales
Judgment Date
19 August 2025
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed; judge's order sanctioning the plans set aside.
Legal Topics
Cross Class Cram Down, Fair Allocation of Restructuring Benefits, No Worse Off Test, New Money Provision, Treatment of Out of the Money Creditors
Insolvency Company Law Restructuring Cross Class Cram Down Fair Allocation of Restructuring Benefits No Worse Off Test New Money Provision Treatment of Out of the Money Creditors

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Summary, issues, holding and outcome

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Parties

Saipem S. P. A.

Appellant

Saipem Singapore Pte Ltd

Appellant

Samsung E&A Co., Ltd

Appellant

Samsung E&A (Thailand) Co., Ltd

Appellant

Petrofac Limited

Respondent

Petrofac International (UAE) LLC

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Interpretation of the 'no worse off' test under section 901G(3) Companies Act 2006
  2. 2 Fair allocation of restructuring benefits among creditor classes
  3. 3 Justification for allocation of equity to new money providers

Ratio Decidendi

The judge's exercise of discretion to sanction the restructuring plans was vitiated by material error in accepting, without adequate evidence, that the allocation of equity to new money providers reflected competitive market terms. The Plan Companies failed to justify the excessive returns as a cost rather than a benefit of restructuring, and did not provide sufficient evidence of market testing or expert opinion. The allocation of restructuring benefits was therefore unfair, and the judge's order sanctioning the plans must be set aside.

Court Disposition

Appeal allowed; judge's order sanctioning the plans set aside.

Orders

  • The order sanctioning the restructuring plans under Part 26A Companies Act 2006 is set aside.
  • No re-exercise of discretion by the Court of Appeal; matter not remitted for further evidence.