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English Court of Appeal Overturns Decision that Guaidó Appointed Central Bank of Venezuela Board Controls Gold Reserves in England

Posted in Dispute Resolution

The decision confirms that the UK government can recognise one person as de jure head of state of a foreign state and implicitly recognise another person as the de facto head of state.

By Charles Claypoole and Isuru Devendra

The English Court of Appeal’s recent decision in The “Maduro Board” of the Central Bank of Venezuela v The “Guaidó Board” of the Central Bank of Venezuela & Ors[i] concerned who controls Venezuela’s gold reserves in England: the ad hoc board of the Central Bank of Venezuela appointed by Mr. Juan Guaidó (the Guaidó Board) or the board of the Central Bank of Venezuela appointed by Mr. Nicolás Maduro (the Maduro Board). Continue Reading

Chinese Court Decision Reinforces Need for Clear and Precise Drafting of China-Related Arbitration Agreements

Posted in Dispute Resolution

Shijiazhuang Intermediate People’s Court declares arbitration agreement providing for ICC Rules arbitration seated in China invalid.

By Ing Loong Yang, Oliver Browne, and Isuru Devendra

In a dispute between Hebei Zhongxing Automobile Manufacturing Co., Ltd. (HZAM), a Chinese company, and Automotive Gate FZCO (FZCO), a UAE company, the Shijiazhuang Intermediate People’s Court declared invalid two related arbitration agreements that provided for arbitration in accordance with the Arbitration Rules of the International Chamber of Commerce (ICC) and to be held “in China”. Continue Reading

CONSOB Again Extends Reporting Requirements of Relevant Shareholdings in Certain Italian-Listed Issuers

Posted in EU and Competition, Finance and Capital Markets

The more stringent reporting obligations for certain Italian-listed issuers will continue until January 13, 2021.

By Antonio Coletti, Isabella Porchia, Guido Bartolomei, and Marta Negro

The Italian Securities Commission (CONSOB) has adopted Resolution 21525, extending for a period of three months — from October 13, 2020, to January 13, 2021 — the provisions of Resolutions 21326 and 21327 of April 9, 2020, as later extended by Resolution 21434 of July 8, 2020 (the Previous Resolutions). The provisions imposed stricter reporting obligations of relevant shareholdings in certain Italian-listed issuers that were selected taking into account their high current market value and/or spread ownership structure (see updated lists, available only in Italian, set out in CONSOB Decisions 39/2020 and 40/2020).

CONSOB reported that this further extension was motivated by the continuing uncertainty about the evolution of the economic and financial situation generated by the COVID-19 pandemic. Continue Reading

What Rules Will Apply to Jurisdiction and the Enforcement of Judgments After Brexit? Part Two

Posted in Brexit, Dispute Resolution

Four recent developments highlight the benefit of arbitration clauses amidst uncertainty about choice of court clauses.

By Oliver Browne and Tom Watret

Introduction

With the end of the Brexit transition period on 31 December 2020 fast approaching, four new important and interrelated developments have highlighted uncertainty about which courts will have jurisdiction in cross-border disputes and the enforcement of judgments from 1 January 2021:

  1. On 27 August 2020, the EU Commission published a revised Notice setting out its view of how various conflict of laws issues will be determined post-Brexit, including jurisdiction and the enforcement of judgments (the EU Notice).[1]
  2. On 28 September 2020, the UK deposited its instrument of accession to the Hague Convention on Choice of Court Agreements 2005 (Hague Convention 2005), ensuring continuity in application of the Hague Convention 2005 after the end of the Brexit transition period.[2]
  3. On 30 September 2020, the UK Ministry of Justice published “Cross-border civil and commercial legal cases: guidance for legal professionals from 1 January 2021” (the MoJ Guidance),[3] which is the UK equivalent to the EU Notice.
  4. On 1 October 2020, the deadline passed for the UK’s accession to the Lugano Convention 2007 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (Lugano Convention 2007) to be approved in time for it to apply as of the end of the Brexit transition period, absent some work-around agreed at the time of any eventual Free Trade Agreement (FTA).

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‘Iniquity Exception’ Extends to Breaches of a Director’s Statutory Duty

Posted in Dispute Resolution

English High Court holds that alleged breaches of a director’s statutory duties can engage the ‘iniquity exception’, which disapplies legal professional privilege under certain conditions.

By Stuart Alford QC and George Schurr

In Barrowfen Properties v Girish Dahyanhai Patel & Ors.,[i] the English High Court held that the ‘iniquity exception’ to legal professional privilege will become engaged if:

  • An applicant can establish a “strong prima facie case” that a respondent director has breached at least one of their statutory directors’ duties.[ii]
  • Either of the following is true:
    • Those allegations involve fraud, dishonesty, bad faith, or sharp practice.
    • The director consciously or deliberately preferred their own interests over the interests of the company, and did so “under a cloak of secrecy”.

The court held that the appropriate standard of proof in such circumstances (“a strong prima facie case”) is a lower threshold than both (i) the balance of probabilities, and (ii) the summary judgment test (no real prospect of success). Continue Reading

Greek Sustainability Initiative Promotes Cooperation Between Competitors

Posted in Environment, EU and Competition

The initiative includes a competition law sustainability “sandbox” in which market participants could team up to work on sustainable business projects.

By David Little and Pierre Bichet

The Greek Competition Authority (HCC) has announced a public consultation on how competition law rules might be adapted to promote more sustainable business practices. The HCC published a Staff Discussion Paper and held a digital conference to launch the consultation.

The HCC’s exploratory proposals outline a number of novel concepts, including: (1) the creation of a competition law sustainability “sandbox” in which market participants could team up to work on sustainable business projects with some measure of protection from competition rules; and (2) the establishment of an “Advice Unit” comprising experts from different regulatory authorities who could provide informal advice on sustainability-related initiatives. The proposals also envisage the publication of general guidelines defining the contours of legitimate cooperation between rivals on sustainability projects. Continue Reading

Private Equity Market Study, Seventh Edition

Posted in M&A and Private Equity

By David J. Walker, Tom D. Evans, and Catherine Campbell

Current Trends

The M&A market is constantly evolving — from the predominantly seller’s market of H2 2019, to the tumultuous times of H1 2020, dynamics are shifting. Deal terms vary by transaction size, industry sector, and jurisdiction. Having a thorough knowledge of market trends is critical to negotiating and executing a successful deal.

Seventh Edition

Latham & Watkins has produced the seventh edition of its annual survey of European private equity transactions. We analysed the acquisition and equity documentation from more than 260 deals signing or closing between July 2018 and June 2020 (inclusive), on which our European offices advised. Continue Reading

Private M&A Market Study, Seventh Edition

Posted in M&A and Private Equity

By Robbie McLaren and Catherine Campbell

Current Trends

The M&A market is constantly evolving — from the predominantly seller’s market of H2 2019, to the tumultuous times of H1 2020, dynamics are shifting. Deal terms vary by transaction size, industry sector, and jurisdiction. Having a thorough knowledge of market trends is critical to negotiating and executing a successful deal.

Seventh Edition

Latham & Watkins has produced the seventh edition of its annual survey of European private M&A transactions. We analysed the acquisition documents from more than 260 deals signing or closing between July 2018 and June 2020 (inclusive), on which our European offices advised. Continue Reading

The Singapore Mediation Convention: Will It Enhance Mediation’s Effectiveness? … in 30 Seconds

Posted in Dispute Resolution

The Convention, which entered into force this month, should allow courts in certain jurisdictions to recognize and enforce settlement agreements directly.

By Oliver E. Browne and Philip Clifford QC

Settling a dispute via mediation is one of the most time- and cost-effective approaches a party can take to resolve contentious issues. Mediation — a confidential amicable negotiation process facilitated by a third-party independent mediator — can be a very useful tool in the right circumstances.

Mediation’s effectiveness as a dispute resolution mechanism has been somewhat enhanced by the 2018 Convention on International Settlement Agreements Resulting from Mediation (known as the Singapore Convention on Mediation), which entered into force on 12 September 2020.

The process of mediation in an English law context, and the impact of the Singapore Convention on Mediation, are discussed in this Latham Client Alert.

Earnouts Are Rising Across Europe, But Can They Unlock COVID-19 Valuation Gaps?

Posted in M&A and Private Equity

Despite practical challenges, earnouts are a tool that PE buyers should increasingly consider to reconcile differences and get deals done.

By Alexander Benedetti, Giancarlo D’Ambrosio, Sebastian Pauls, Laura Kichenside, Catherine Campbell, Tom Evans, and David Walker

The use of earnouts, though historically disliked by PE buyers, is increasing across Europe. Earnouts can provide a way to bridge valuation gaps, a common need given frothy valuations pre-COVID-19, and a more frequently encountered issue during H1 2020. According to the forthcoming seventh edition of the Latham & Watkins Private Equity Market Study that examined deals signed or closed between July 2018 and June 2020, 18% of deals featured an earnout, compared to 16% and 14% in the 2018 and 2019 editions respectively. While the use of earnouts has challenges for PE dealmakers, earnouts have enabled parties to reconcile differences and get deals done, making them a tool that PE buyers may become more willing to accommodate in the year ahead, particularly given the uncertainties for many businesses caused by COVID-19.

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