Recognition of UK schemes of arrangement after Brexit: key considerations from a Luxembourg perspective
The most likely way to have an English scheme of arrangement recognised in Luxembourg would be by applying to the Luxembourg courts for an exequatur recognition procedure.
The English scheme of arrangement has become one of the key tools for European restructurings in the recent years. However, Brexit and the consequential disapplication of the Brussels Convention has led to a legal vacuum in the context of having such schemes recognised throughout the EU.
Whilst the Hague Convention and the Lugano Convention may, to some extent, fill this vacuum, their application presents its own set of uncertainties. Significantly, both treaties specifically exclude insolvency, bankruptcy or analogous processes from their application.
Under the current circumstances, possibly the most likely way to have an English scheme of arrangement recognised in Luxembourg is by applying to the Luxembourg courts for an exequatur recognition procedure - a relatively untested and time-consuming process. In this context, one must look into possible public order concerns on a case by case basis as well as whether seeking recognition is absolutely needed.
Read the full article published by Beaumont Capital Markets here.