Snowden J granted an application by Receivers for post-judgment injunctive relief to give effect to an earlier Order that funds due to creditors from a Spanish insolvency should be paid to the Receivers rather than the Lenders.
This case concerned an application by Receivers for post-judgment injunctive relief against Mr Maud (who we have previously written about) and a company called Cruz (together “the Lenders”). The Lenders loaned money to Ramblas Investments BV which subsequently entered insolvency proceedings in Spain. Receivers were appointed by Royal Bank of Scotland (“RBS”) under a Subordinated Creditors’ Security Agreement (“SCSA”) in relation to these loans.
Under the SCSA, the Lenders were obliged to do whatever the Receivers might require to facilitate the realisation of rights in respect of shareholder loans in the Spanish Insolvency.
Funds were available in the Spanish insolvency to distribute to creditors, including the Lenders. Snowden J made an Order in February 2019 that these funds should be paid to the Receivers and ordered the Lenders to provide notarised confirmation to the Spanish Administrator that the funds should be paid to the Receiver rather than the Lenders.
The Lenders provided the Notice as required by Snowden J - however they stated that if the Administrator was unwilling or unable to recognise the Receivers then they directed the Administrator to make the payments to the Lenders. Following a subsequent chain of correspondence between the Administrator and the Lenders, the Administrator concluded that he could not make any payment to the Receivers.
The Receivers therefore applied for a mandatory injunction to compel the Lenders to send further letters to the Administrator confirming that the funds should be send to the Receivers, withdrawing any objections they had previously made. The Lenders opposed this application.
Snowden J rejected the Lenders’ arguments that the further orders sought might interfere with the Lenders’ rights under Spanish law, as the Lenders had assigned the benefit of being a creditor to RBS and subsequently another creditor under the SCSA and the order was merely giving effect to contractual obligations which the Lenders had voluntarily entered into.
Further, if the Lenders did have any arguments in relation to their rights under Spanish law, they should have been raised at the original hearing in February 2019. It was held to be too late and an abuse of process to raise the argument at this hearing as there had been no application to appeal the original Order or to seek a review of it. In any event, no specific rights were identified that may be infringed under Spanish law.
Snowden J held that it would be appropriate for him to exercise his discretion to make further orders to ensure that the original Order made in February achieved its intended effect that the funds be distributed to the Receivers.