Litigation in the Time of Covid-19

Legal issues in commerce, finance and insolvency

9th Edition (15 February 2021):

Latest developments on contract law, the Corporate Insolvency and Governance Act 2020, company law, banking and financial services, civil procedure, remote litigation and offshore litigation in Bermuda, the BVI and the DIFC

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www.4stonebuildings.com Table of Contents

Members of Chambers xii Clerks xx Chambers’ Staff xxii Preface from the Head of Chambers xxiii Preface from the Senior Clerk xxiv Table of Cases xxv Table of Statutes xxxi Table of Statutory Instruments xl Practice Directions xliv Table of EU and International Materials xlvi

Section One Contracts Introduction 2 Summary Issues 3 1.1‌ What happens if a party’s performance is delayed because of the pandemic? 3 1.2 ‌‌ What if one of the parties wants to be released from the contract because of the pandemic? 3 Variation, Suspension and Waiver 3 1.3‌‌ What are the options and risks if parties wish to adjust their contractual arrangements due to the pandemic? 3 1.4‌‌ When can a party rely on economic duress to challenge adjustments to contractual arrangements? 5 1.5‌‌ Can performance of the contract simply be suspended? 7 1.6‌‌ How can a breach of contract be waived? 7 Termination, Repudiation, Force Majeure and MAC and MAE Clauses 8 1.7‌‌ When can a party rely on a contractual termination clause? 8 1.8‌‌ What is the impact of a repudiatory breach? 11 1.9‌‌ When will a force majeure clause be engaged? 12 1.10‌‌ When will a material adverse change or a material adverse effect clause be engaged? 17 Impossibility and Frustration 19 1.11‌‌ When will a contract be frustrated? 19 Other Rights in the Event of a Breakdown in Pre-Contractual Negotiations 23 1.12‌‌ What options may a party have if negotiations for a contract break down due to the pandemic? 23

ii Section Two Corporate Insolvency Introduction 28 The Moratorium 31 2.2‌‌ Which companies are eligible for a moratorium? 32 2.3‌‌ How does an eligible company obtain a moratorium? 34 2.4‌‌ What are the effects of obtaining a moratorium on creditors and the company? 35 2.5‌‌ Who is the monitor? 38 2.6‌‌ When does a moratorium come into force? 39 2.7‌‌ What is the duration of a moratorium, including extensions? 40 2.8‌‌ When does a moratorium terminate, and what are a director’s and the company’s duties of notification? 41 2.9‌‌ What must the company do to publicise the moratorium? 42 2.10‌‌ Can I challenge a monitor’s actions? 42 2.11‌‌ Can I challenge a director’s actions? 43 2.12‌‌ Can the monitor be replaced? 44 2.13‌‌ Are there any criminal sanctions related to the new moratorium? 44 2.14‌‌ Are there any additional rules applicable to regulated companies? 44 2.15‌‌ Where do moratorium debts rank in priority if the company does enter an insolvency procedure? 45 2.16‌‌ What happens if the monitor’s remuneration is excessive? 46 Arrangements and Reconstructions for Companies in Financial Difficulty 46 2.18‌‌ What do the new provisions on arrangements and reconstructions for companies in financial difficulty allow a company to do? 47 2.19‌‌ What are the main differences between Part 26A of the Companies Act 2006 and company voluntary arrangements under the Insolvency Act 1986? 47 2.20‌‌ Which companies can use the new provisions in Part 26A of the Companies Act 2006, and when can they do so? 48 2.21‌‌ What is the process for entering into a compromise or arrangement under Part 26A of the Companies Act 2006? 50 2.22‌‌ Will the existing case law in relation to Part 26 of the Companies Act 2006 apply to Part 26A? 51 2.23‌‌ The first court hearing: what are the responsibilities of the applicant and what matters should be dealt with? 51 2.24‌‌ What are the req