Fried Frank represented Sberbank in a successful challenge against an application made to the High Court by the International Bank of Azerbaijan (the “IBA”), pursuant to which the IBA sought an order for a permanent moratorium against creditor action in England and Wales. The application related to the voluntary restructuring of the IBA in Azerbaijan.
On Thursday 18 January, 2018, the High Court confirmed that the long established principle in Antony Gibbs & Sons v La Societe Industrielle et Commerciale des Mataux (1890) 25 QBD 399 (that the discharge of an English law governed debt under the insolvency laws of a jurisdiction outside of England and Wales is not a valid discharge of such debt) remains good law notwithstanding the implementation of the Cross Border Insolvency Regulations 2006. (See Bakhshiyeva (in her capacity as the foreign representative of the OJSC International Bank of Azerbaijan v Sberbank of Russia of Russia, Franklin Templeton & Others).
The Fried Frank team, led by litigation partner Justin Michaelson and restructuring and insolvency partner Ashley Katz, successfully challenged the IBA's ability to obtain the permanent moratorium on the basis that the IBA is indebted to Sberbank pursuant to an English law governed facility agreement.
“This decision is an important affirmation of the Gibbs principle, that a discharge of debt is governed by its applicable law, and that a foreign insolvency process cannot modify or compromise English law governed liabilities. Like many other international parties, Sberbank selects English law as the governing law for cross-border transactions because of its reputation for neutrality and the certainty it provides, as well as the predictability of our judicial system. Sberbank is delighted with this result,” said Justin Michaelson.
The other members of the Fried Frank team included Imran Aslam, Simon Camilleri, Shivani Sanghi and Azhar Bagdatova.
Fried Frank instructed barristers Barry Isaacs QC and Alexander Riddiford of South Square in this matter.