 Felly, mae'n gweithio i fynd i gyda'r ddylch yn ddechrau i fynd i'r dweud i gael yma, mae'n Sara Worthington, ac mae'n ddod i'n gweithio i fynd i'ch gweithio i'r ddechrau i fynd i'r ddod i'r 2013, Alun yn Overy Cymru. Mae'n gweithio i'r ddod i'r ddod i'r sefydlu, yn y sylfaenol yma, sy'n ddod i'r ddod i Alun yn Overy. Mae'w'n gweithio i One of the centre's ambitions is to facilitate enjoyable and productive jousting over controversial legal issues. So tonight's speaker is eminently qualified to deliver on that front. Daym Elizabeth Glouster has chosen as her topic, derivative delights and oligarch feuds, what contribution is English law making to our post-modern financial world. Now, I know she needs no introduction but tradition demands that I say something, so I'll be brief and I'll also be selective. I'm perhaps only slightly biased when I say she began her legal career in the best possible way with a degree from Cambridge. She was a student at Gerton College. She was then called to the bar in 1971, appointed as a QC in 1989, a venture of inner temple in 1992. She was a judge of the Courts of Appeal of Jersey and Guernsey from 1993 to 2004. Then she became a recorder in 1995, appointed to the High Court in 2004 and then to the Court of Appeal earlier this year. But that bald history hides a wealth of great achievements and notable firsts. As a barrister, she appeared in a string of high-profile commercial cases. It's a roll call, really, of the bearing's disqualification, Enron, Telly West, Parmalat, Equitable, Rail Track, Maconi, TXU, Maxwell, Barlow Clows, anon, anon. Indeed, such was her skill as a cross-examiner that she was prosecuting counsel for the crown in the Guinness criminal trial. I think that's quite a rare accolade for a general commercial barrister. So perhaps in the same vein, Chamber's guide described her at the time as a punchy cross-examiner. She's quick on her feet and shells the opposition trenches mercilessly with forceful, well-considered arguments. Perhaps Google put it more directly and slightly more in the vein of calling a spade a spade. They said she has a reputation for being a scary cross-examiner and she wears Jimmy Chew's. So now you know what the secret is to being quick on your feet. Perhaps that profile makes it unsurprising that before her appointment to the High Court she was reputed to be Britain's highest-paid woman barrister and the first woman to join the elite club of baristers earning more than a million a year. When she was appointed to the High Court in 2004, she was the first female judge appointed to the then 110-year-old commercial court and she became the judge in charge of that court from 2010 to 2012. So I think we can only wait to see what she will make of her time in the Court of Appeal. The title of her talk tonight makes it clear that we're going to hear something of the leading cases which have been a feature of her career, including the notorious Berezovski Abramovich feud, so I won't tread on that turf, but I'll hand over to Liz Boster. She's going to speak for roughly 45 minutes and then has agreed to take questions. So can you welcome our speaker? Thank you very much and I apologise for being late. You always know how popular you are as a guest speaker by the amount of notice you're given. For Lord Millet, for example, who was last year's guest speaker, it's at least 18 months. For Lord Newburger, the President of the Supreme Court, it's at least 12 months. So when two weeks ago Sarah telephoned me, I knew exactly where I stood in the academic celebrity stakes. Nevertheless, it's a privilege if somewhat a daunting privilege to be asked to speak at one's old university in the splendid modern lecture hall on the occasion of the Allen and Overy annual lecture, daunting for all kinds of reasons. First, my instructions from Sarah and I quote, we want a speaker who will challenge the audience intellectually and yet also make them laugh. We want students, practitioners and judges to be stimulated to think about the state of our laws, whether positively or negatively. Presumably, she had in mind some sort of combination between Jeremy Paxman, Joanna Lumley, with a sort of overlay of Madonna to provide the stimulation. Still nothing perhaps quite as difficult as the opaque request that I recently received from a university which I shall not name to address its law faculty on the perplexing topic of female perspectives in commercial law. You will not be surprised to hear that I passed on that one. I can't say that I ever appreciated, for example, that there were male and female perspectives of the law of offer and acceptance or the doctrine of frustration, but no doubt that simply betrays the shallowness of my intellectual curiosity. Secondly daunting because you members of the audience dons and students alike. No doubt spend your waking hours in scholarly analysis of the latest tantalising offerings from the Supreme Court. Say you're bound to know much more about the current state of the law in the financial areas which I'm going to touch on tonight. Rather than this very junior recently appointed member of the Court of Appeal who's far too busy trying to cope with the huge and disparate workload in the Court of Appeal in areas of law that is simply not dreamt of in my philosophy. Did you know for example that a beach is regarded as a village green for certain statutory purposes? Thirdly daunting because the sponsors of this event Alan and Avery with the badges on were in my distant past one of my best clients not just in the field of litigation but also in what was then the start-up legal world of derivative instruments. I would hate them to think that I'd not trained on intellectually since their generosity in instructing me. I should say at this juncture that I leave completely out of account as a daunting factor the presence in the audience tonight of certain judicial members of the audience who can only have come along for the dinner. So what is the route map for my presentation tonight? I was quite proud of the title when I dreamt it up. Now I'm not so sure and I'm not sure I'm going to be sticking to it. I take as my starting point a speech given in 2008 at a symposium on law and commerce by the then law chief justice the law of Phillips. He articulated his thesis in the following terms. My thesis is going to be that commerce needs law and that law needs commerce but the conflict has been between the tendency of the lawyer to leave no stone unturned and the desire of the commercial man for a speedy inexpensive and sometimes confidential resolution of his dispute. Lord Phillips went on to say any country that wishes to promote commerce will be anxious to offer a justice system in which commercial men have confidence. Furthermore commercial dispute resolution is an industry in its own right and it's in a country's interest that its laws and its lawyers should be involved in resolving not merely domestic disputes but disputes arising in other jurisdictions. The first theme which I wish to explore under this headline is whether English law and the English courts are indeed providing the sort of dispute resolution service that commercial participants in today's financial markets require have confidence in and are prepared to pay for. I raise the question whether there is a risk that we the lawyers by which I include both the judges and you the practitioners and you the future practitioners that we are in fact turning over too many stones and adding layers of unnecessary complexity rather than simplifying and clarifying the issues involved in complex financial disputes for the benefit of those who seek redress. Starting on a positive note however rather than a negative note there can be little doubt that the English and indeed the Scottish courts at all levels have responded magnificently to the challenge of the tsunami of litigation that has arisen in the wake of the large-scale instability in world financial markets and the financial crisis following the collapse of Lehman's in 2008. Certainly commercial men needed and have had extensive recourse to the courts for their dispute resolution in the last few years. You only have to google Lehman on Bailey to see the plethora of cases that have been decided in the aftermath of the crisis and no doubt to the delight of litigation lawyers although perhaps not so amusingly for their clients the litigation role continues not just in the courts but also in the regulatory arena. The factors which cause the financial crisis many of them systemic have shaped the litigation landscape. I mention a few and they're all fairly obvious the easy availability of credit as a result of loose monetary policy the relaxation of lending standards resulting in the growth of excessive and unwise debt and leverage the failure of light touch regulation and supervision speculative bubbles in property and complex financial and derivative products driven by excess liquidity and a herd mentality among investors and a widespread lack of comprehension of the potential toxic consequences of such products. Against that background the types of issues which the courts in the UK and elsewhere have had to decide have come as little surprise. Obviously there have been many large-scale insolvencies often involving different but interconnected members of globalised corporate groups which are subject to insolvency procedures and a variety of different jurisdictions. This necessarily has raised complex border cross border and other issues for the courts to resolve their numerous important decisions made by the courts at all levels in the context of the various Lehman company insolvencies and I won't give you a list of them tonight you can go and look it up for yourself but because of the monumental scale of losses arising out of derivative transactions parties to such transactions have used highly aggressive litigation or arbitration strategies as a means of avoiding or challenging their enormous liabilities tactics employed have included for example misselling claims against financial institutions investment managers and brokers in relation to the suitability characteristics and risk profile of derivative products often such claims include allegations of negligent and or statutory misrepresentation and allegations of breaches of duty and care of care in the context of alleged advisory relationships. A notorious recent example is Deutsche Bank against Sebastian Holdings decided recently at first instance there the bank brought substantial claims in the commercial court for the foreign exchange inequity trading set of Sebastian Holdings a company owned and controlled by the Norwegian internet billionaire Mr Vic. Sebastian counterclaimed for heavy losses making exotic forex transactions put on by its forex trader through Deutsche Bank's forex prime brokerage platform and for losses arising for huge forex positions put on for for Sebastian by Mr Vic himself and this is the crucial factor Sebastian counterclaimed 8 billion dollars in consequential losses making this one of the largest claims in commercial court history so far the investor has before Mr Justice Cook to put it kindly come home in second place another recent interesting example is Deutsche Bank against Unitech where the court of appeal recently has permitted investors in two cases to amend pleadings to include allegations relating to alleged libor manipulations by the relevant banks both of which were on the libor panel the investors are claiming against the banks that the banks allegedly miss sold derivative and loan products in one in in which one of the variables was libor and that the banks impliedly represented that their participation in setting libor was honest watch this space for the moment it's only at the permission to amend to stage miss selling claims by investors against bank give banks give rise to predictable causation and remoteness defences along the lines that the financial crisis was not foreseeable that with the exception perhaps of those who Michael Lewis wrote about in the big short market participate participants did not predict the collapse as Charles Chuck Prince of Citibank famously said on the eve of the crisis in 2007 as long as the music is playing you've got to get up and dance sometimes such defences work for example in Camerata property against Credit Suisse where the counterparty risk of the collapse of Lehman brothers was held to enforceable sometimes these defences don't work see for example Rubenstein against HSBC where the Court of Appeal held that the loss was not too remote the danger that had materialised in that case was exactly the risk that the bank had failed to warn the claimant Mr Rubenstein about and the factor which made the investment unsuitable for him in this area one can perhaps see a marked difference between the court's approach to the sophisticated investor and what you might call the man in the street investor other defences successfully raised by the bank include contractualist stock all that is to say statements all representations in the product documentation that the purchaser has not relied on any advice or representations made by the selling bank that may give rise to a contractualist stock all indeed recent years have seen a string of banks successes in litigation in the English courts in many of which the court has applied the doctrine of contractualist stock all affirmed by the Court of Appeal in Springwell on appeal may I say as a plug for me from my decision at first instance confirming my decision at first instance as a result overall English status as a technical jurisdiction has made it a popular forum for banking disputes at least so far as the banks are concerned however there are some indications that arbitration may be becoming a serious option for the determination of banking disputes although the evidence to support that claim is somewhat mixed there have also been a large number of cases where parties to derivative transactions have sought to avoid liability by raising arguments in relation to the close out and valuation mechanisms in various forms of transaction under the ISDA master agreement the ISDA master agreement is to believe to be incorporated into 90% of over the counter derivative transactions globally unfortunately there was initially something of a divergence of view between the judges who tried certain of the ISDA cases at first instance including in particular my brother's flow J my brother's brig J as he then was and myself that was perhaps inevitable but not in my view at all helpful for the market who wanted a quick and clean answer to the questions they raised in april 2012 however the court of appeal handed down judgment in four conjoined appeals in the case of lomas against jfb furth rixon and other cases and to a large extent most of the critical issues raised to date in relation to the ISDA master agreement have been resolved by that decision it's a decision of which i'm particularly formed since my analysis of a number of issues was upheld on the 9th of september 2013 very recently ISDA for the first time published its arbitration guide which sets out a series of model arbitration clauses to be used with the various ISDA master agreements apparently and i was concerned about this because i thought maybe they weren't ISDA thought or ISDA members thought they weren't getting a satisfactory service from the courts ISDA members had identified the key reason that ISDA members had identified as leading them to consider arbitration as opposed to litigation was enforcement risk particularly in emerging markets and the ISDA guides having referred to the traditional jurisdiction clauses referring to the english or the new york courts went on to say the courts of both these jurisdictions have a reputation reputation for a poverty and experience of resolving disputes arising out of derivative transactions and they can generally be relied upon to do so with reasonable dispatch and then went on to refer to the fact that many parties transactions in emerging jurisdictions uh in in which it is difficult or sometimes impossible to enforce a foreign judgment and for that reason it's uh the arbitration clauses have been put in the ISDA master agreement as an alternative to new york uh or english jurisdiction clauses so it doesn't appear there that the risk of conflicting decisions in the english courts of first instance or factors of delay have been a driver of the ISDA market towards arbitration and we'll have to see where where that goes other grants commonly put forward by parties to derivative transactions are allegations of corporate incapacity and fraud italy is a huge player in this particular game there are a number of ongoing disputes over derivatives currently before the english courts uh i'm told that it's estimated that between 1997 and 2007 dozens of italian cities and other authorities borrowed 111 billion euros from london investment banks hedged with swaps in march 2012 ubs deutcher jp morgan and debt for bank agreed a 500 million euro settlement with melanne on 30 year swaps and the taxis employed are not limited to attempted preemptive issue of civil proceedings in italy in breach of an english jurisdiction clause uh that tactic of course has inevitably led to numerous jurisdiction uh battles in which the english courts have given a number of important decisions in relation to articles 27 28 of the regulation jurisdiction regulation criminal proceedings are also a tactic employed by the italian local authorities three banks the three banks i've mentioned were convicted of fraud in the italian courts in december 2012 in connection with the sale of derivatives contracts uh the court of appeals decision in july 2012 in standard charter bank against salon petroleum is a real positive i would regard it as a model contribution to the law in this area of alleged lack of corporate capacity to enter into a derivatives transaction the decision effectively discards the holy unreal and blurred distinction between hedging and speculative transactions in the context of derivatives and simply concentrates on the issue whether in anticipation and not in retrospect the relevant derivative transactions were ordinarily part of ancillary or conducive to the business of a commercial or be it in that case public corporation and that was a welcome decision for those of us who still smart from the unworldly result reached by the house of lords in hazel against hammersmith and fullham london borough council back in 1992 uh that swap transactions were speculative transactions and therefore outside the capacity of the hammersmith and fullham london borough council interestingly and i look at lord millett here in parallel arbitration proceedings in relation to very similar derivative contracts brought by city bank against salon petroleum and city bank were foolish enough to arbitrate not litigate the arbitral tribunal one of whom was lord millett in the light of a concession that the issue of capacity depended on the characterisation of the trades engaged in the almost impossible task of defining the difference between speculation and hedging and concluded that the trades were speculative and therefore outside salon petroleum's corporate capacity so a very interesting example of the different results that may be achieved where the same issues are litigated and also arbitrated there was also an exit claim by the third bank against salon where the treaty tribunal came down in favour of the bank although that is now being challenged but having been instructed by sarah to make you think on the one hand about the positives let me turn now to consider some of the problems the negatives and i see that there is there are problems which arise as a result of the application of the combined intellectual enthusiasms of judges and lawyers to the fascinating issues which the financial crisis has given rise to i raise for debate whether there is a concern reverting to what lord philippe said in the passage that i started off with is there a concern that the tendency of lawyers to leave no stone unturned has sometimes given rise to more problems than the actual case resolves dare it be said that in some cases the hugely impressive intellectual efforts of the judges and indeed of the lawyers are of little practical utility to the punters and have confused rather than simplified the issues in these complex financial cases for the benefit not for the benefit of those who seek redress i turn to a number of case studies to explore the question i raise i would be fairly confident that at least some of them are likely to appear on your tripos papers and if i don't have time to go through them or they will no doubt appear in a printed publication of this paper my first case study involves two cases which were widely regarded as having significant implications for the bond market many bonds issued by international companies and foreign sovereigns are governed by english law the first case i want to touch on is a the court of appeal case of as a vado against in copa in which the court of appeal in june of this year upheld the first instant decision of hand mr justus hamlin in the commercial court the second case is as anagon asset management against irish bank decided by mr justus briggs at first instance in the chance division in 2012 both cases raised the issue as to how companies which in the face of financial difficulties they're seeking to amend their bond terms can incentivize their bond holders to vote in favour of the proposed amendments in as a vado the bond issuer in copa in the contracts of a reconstruction of its debt put forward proposals for the postponement of interest on the bonds and amending the amortisation arrangements for the principle of the bonds the resolution required a 75 percent majority of those voting and there are also special quorum permissions provisions in copa offered subject to the relevant resolutions being passed carrots in the form of consent payments to those note holders who voted in favour of the resolution which were equivalent to half the amount of interest that would have occurred due on the notes in the particular period those who voted against the resolution would get nothing they wouldn't get the consent payment at the meeting which was attended by the requisite majority to satisfy the quorum provisions 98 percent of those bond holders represented voted in favour of the resolution and the consent payments were duly made in the litigation however that a sentient bond holders alleged that the making of consent payments only to those bond holders who voted in favour of the resolution was for various reasons unlawful under English law the first main ground relied upon by the dissentient bond holders was an argument that the consent payments infringed the paripassul which required all members of the class it was alleged to be treated equally a principle which they alleged was reflected in the terms of the trustee governing the bond issue the challenge was made by way of a summary judgment application which was dismissed by Hamlyn Jay in an extemporary judgment the court of appeal also made short shrift of this argument stating that the paripassul principle didn't apply as the payments were not monies held by the trustee on trust for the bond holders but rather consent payments made by the company the bond issue itself nor did the paripassul principles applicable in an insolvency apply because this wasn't an insolvency situation the second and more interesting ground of attack by the dissentent bold bond holders was that the consent payments were in effect bribes the majority was not entitled to put company assets into their own pockets to the exclusion of the majority that was a fraud on the minority and therefore unlawful under English law it was said that the majority bond holders had sold their votes to the company and so the resolution which their votes had carried was unlawful and void reliance was placed on the well-known company case of many and people telegraph after an economical analysis of limited but relevant authority law justice Lloyd and the court of appeal had little difficulty in rejecting this argument he said that the payment was available to all known holders conditionally only on their doing that which was within their power namely exercising their vote to their right to vote in a particular way there was no pre-ordained discrimination between a majority and a minority as there was in the case of many a clear and sensible result welcomed by the market and supporting the freedom of contract neither the judge at first instance nor the court of appeal needed to consider the evidential issue whether the solicitation and payment of consent payments was a widely known and long-standing practice in the debt market or was consistent with standard market practice applicable to financial debt instruments the court's decision was founded on an issue of law which at least by the court was clearly articulated the other notable aspect of the judgment was the graphic description by law justice Lloyd of the dilemma faced by an individual note holder in this situation he called it quotes the trembling hand perfect knack equilibrium a term which he had apparently picked up from his own out of hours reading of articles on junk bonds which had not been cited to him by council let us look by way of contrast at the first decision first instance decision of mrs justice Briggs in my second case as an argon this was decided in july 2012 after as a vado had been decided at first instance but before the courts of appeals decision in the same case sadly although the appeal in as an argon was due to come on together with the appeal in as a vado by the date of the as a vado appeal the bond issuer in as an argon had gone into liquidation and its liquidators decided not to pursue the appeal what a shame the court of appeal not surprisingly took the view that it didn't need to consider the issues raised in the as an argon case however Lloyd's lj's comment in relation to as an argon that quotes the issues raised in that case remain open to be looked at at a pellet level was one hopes not precisely a ringing endorsement of the conclusions reached by mr justice briggs in that case in reality although there were factual differences between the two cases they raised very similar issues namely the ability of majority bond holders to bind the minority in circumstances where because they were voting in favour of the resolution to amend the terms of the note the majority were getting a much better deal the issue in as an argon was likewise the legitimacy of so-called exit consents in as an argon the note issuer anglo Irish invited its note holders in relation to a particular series of notes to exchange their old notes for new notes at an exchange rate of 0.20 the new notes were not subordinated and were guaranteed by the Irish government at the same time anglo Irish announced that it would convene a meeting of note holders to approve various amendments to the old notes including giving anglo Irish the right to redeem the old notes at a rate of 0.01 per a thousand euros principal amount of notes which was a minute payment ratio of 0.40 is one in contrast to the exchange ratio of 0.2 offered on the new notes that very poor exchange ratio reflected or was said to reflect the amounts which will be payable to note holders if the Irish government were to allow anglo Irish to be wound up any note holders who accepted the proposed exchange were deemed by virtue of tendering their old notes for exchange to have given instructions to a proxy to vote in favour of the resolution changing the terms of the old notes an overwhelming majority of note holders may surprise there offered their old notes for exchange and thereby were deemed to have given approval for a vote in favour of the amendment resolution. The dissentant note holder in Assanagon the claimant did not tender its notes for exchange or vote at the meeting it received just 170 euros for its 17 million euros face value of notes it then sought a declaration that the resolution was invalid on the number of grounds these included a technical ground that the terms of the trust deed prevented the issuer and its subsidiaries from being entitled to vote at any meeting in respect of notes beneficially held by it and that by the time of the meeting the notes which had been tended for exchange by the tendering note holders were beneficially owned by the issuer and therefore carried no entitlement to vote and secondly and more important for tonight's purposes the ground which had been advanced in as a vado similar but not quite the same namely that the exercise by the majority note holders of their voting rights on the resolution in circumstances where they were obtaining the benefits of the exchange was an abuse of their majority powers of their majority powers and both oppressive and unfairly prejudicial to the minority note holders who'd not agreed to the exchange the judge agreed with the dissentant note holder on the first round challenge namely the beneficial interest point which disenfranchised them and the decision was sufficient to decide the case in favour of the dissentant note holders but Mr Justice Briggs did not stop there although there was no need for him to do so other than the fact that it was an important issue for the bond market he went on to hold that on the assumption that the prohibition against Anglo Irish voting the notes did not apply the exercise by the majority note holders of their voting rights in favour of the amending resolution was unlawful that was because they were tendering their aid to the coercion of a majority by voting for a resolution which expropriates the minority rights under the bonds for nominal consideration and that was the way Mr Snowden QC sitting here in the third row actually put the proposition which was accepted the judge held in quite colourful language that what the issuer had done was to deliver quite simply a coercive threat which the issuer invites the majority to levy against the minority nothing more than all less its only function is the intimidation of a potential minority based upon the fear of any individual member of the class that by rejecting the exchange and voting against the resolution he or it will be left out of the cold this form of coercion is in my judgment entirely at variance with the purposes for which majorities in a class are given power to bind minorities et cetera et cetera accordingly he held that the exercise by the majority note holders was a coercive abuse of power and unlawful so where does that leave the bond market in relation to the legitimacy in English law of exit techniques and inducements in my view in a complete muddle whilst there were factual differences between the inducements in the two cases two critical factors were present in both namely one the favourable offer was available to the entire class of bond holders conditionally only on their doing that was that which was within their power namely to to vote and two the adverse treatment of those who did not accept the offer was transparent the reality was there was no principal basis for distinguishing assenegon from as a vado notwithstanding the slightly different economic effects of the transaction in each case that in my respectful view should have dissuaded mr justice Briggs who had the benefit of mr justice Hamlin's judgment in as a vado from embarking on a determination of an issue he did not need to decide moreover mr justice Briggs seems to have been strongly influenced by the wide disparity between the results for exchanging and non exchanging note holders but in the economic context namely the hypothetical scenario of the liquidation of anglio arish there was nothing surprising let alone i would suggest expropriatory in the non exchanging note holders being left with virtually valueless amended notes that simply reflected their business choice to take a liquidation value of the notes rather than to stick with the new tech notes long term and was mr justice briggs saying that all exit consents were an abusive oppressive abuse of a majority note holders voting powers or only those which the court regarded as strongly detrimental to non exchanging note holders in my view it cannot be the case that the conclusion in such circumstances whether the exercise of the majority's voting powers oppressive or expropriatory depends on the judge's evaluation of the respective commercial benefits of the deals for ascending or non ascending shareholders all of which in my view goes to show that the courts of appeals analysis has to be right and that hasson agon was wrongly decided so the point of this case study to my present pieces is that as a result bond issue as bond holders and their advisers are left with a lingering question as to whether in certain circumstances majority resolutions in exit situations may be struck down as oppressive and that is in my view unsatisfactory if the courts are meant to be there to serve the markets my next case study and i'll whiz through provides a stark example of how impressively intellectual deeply reasoned but also widely diverging divergent judgments by the privy council and the supreme court can cause horrendous problems for insolvency practitioner foot soldiers who have to work out the implications in their everyday lives i refer to the recent case of rubin and euro finance decided by the supreme court in october 2012 in which the majority lord collins who gave the principal judgment lord walker and lord sumptons sitting in the front row here tonight held that the earlier privy council case of cambridge gas against the unsecured creditors of navigator holdings decided in 2006 was wrongly decided lord mans whilst agreeing with the majority as to the outcome in rubin did not subscribe to what he described as lord collins is incidental observation that cambridge gas had necessarily been wrongly decided lord mans pointed out that the question whether the decision in cambridge gas was wrong had not been argued before the supreme court and that in circumstances where that case was distinguishable he would refer to reserve his opinion on it and that i would respectfully suggest was exactly the right approach lord claug in his dissenting minority judgment went further he also agreed that cambridge gas was distinguishable but did not agree that cambridge gas had been wrongly decided like lord mans again correctly in my view he thought that it would be wrong to decide the point as it had not been argued um you want me to stop at seven so we can have drinks and dinner don't you um well i'll have to crack through um basically intellect against drinks win every time all i can say to you students because i don't want to be here forever is that go away and read those two judgments read in particular the analysis of lord hoffman in cambridge gas the complaint the issue in cambridge was whether or not a shareholder was bound by a chapter 11 order and plan implemented by the new yw bank proxy courts in circumstances where the shareholder had not submitted to the jurisdiction of the new yw courts lord hoffman giving the judgment of the board confirmed the judgment of the manx court of appeal which had exceeded to the request or confirmed the judge at first instance request from the new yw yw yw yw yw yw yw yw yw affecting to its chapter 11 order and in cambridge the privy council did so by recourse to what lord hoffman described in his judgment as a doctrine of university ality of bankruptcy law long and expiration if not always fully achieved of united kingdom law and that enabled the privy leomon y dyma hwnnw cwmp yn gyffredinol mewn cyfrifiadau o'r ddoedd gyllidol ac yn Cast Llyfrgell Youn Gymraeg yw'r sylf growinglliad cynghoraeth yn cyfathodd. Ni'n porch genrygu'r cyfrifiadau o hynny o'r cyfrifiadau mewn cyfrifiadau sy'n cyfrifiadau a'n mynd i hynny, oherwydd yma'r cyfrifiadau Cayaary o'r cyfrifiadau Cyfrifiadau cair hwnnw hynny, oherwydd yr bydd yn gwneud ar y wahodod teulu New York, ac y Ielodd y Cymru, y newidau ymlaen, yn y cyfnod o'r cyfnod o'r rai sydd wedi myfyrdd o'r dyfanc, o'r cyfnod o'r cyfnod o'r dyfanc. Mae'r cyfnod i'r cyfnod o'r cyfnod o'r mae'r cyfnod o'r cyfnod, oherwydd y Cymru yn ysgrifennu 11 yma yng Nghymru yma o'r ysgrifennu Newiadol. If, as in the present case, the Manx company navigator had submitted to the Chapter 11 jurisdiction, there was absolutely no reason why the Manx court should not provide assistance by giving effect to the plan without requiring the creditors to go to the trouble of parallel insolvency proceedings in the Isle of Man. Lord Hoffman was very careful to flag the possible limits to the doctrine where, as was not the case in Cambridge Gas, there was conflict between the jurisdictions. I would suggest that the actual decision on its facts in Cambridge Gas narrowly focuses, as it was, on the nature of shareholders' rights in an insolven company. It was orthodox and that the recourse to the principle of modified universality did no more than enable the Manx courts to assist the New York courts to achieve via recognition results that could easily have been achieved under domestic law. Lord Hoffman's approach was widely welcomed by insolvency practitioners, bond holders and other creditors of offshore companies and found favour in a number of jurisdictions worldwide. However, it was the subject of judicial dissent in Ireland in different circumstances and of some trenchant academic criticism in certain quarters in England. But then came Reuben in Eurofinance and UCAP re-insurance in the Supreme Court. The facts of those cases were totally different from the facts in Cambridge Gas. The issue was whether, and in what circumstances, judgments of foreign courts in adversely proceedings to adjust or set aside prior transactions that are undervalued or as preferences could be recognised in England at common law, or earlier through the international assistance provisions of the ANSI trial model law or under statutory provisions similar to the assistant provisions in section 426. The Court of Appeal in Reuben, following Lord Hoffman in Cambridge Gas, ruled that a foreign insolvency judgment in personam could be enforced in England and Wales at common law against a defendant, not otherwise subject to the jurisdiction of the foreign court under the traditional jurisdiction rules as to enforcement of personal judgments as stated in DICY. Lord Collins held that the orders of the New York and Australian courts had no entitlement to recognition and enforcement by the English courts in overseas avoidance proceedings, whether at common law or under any of the relevant provisions, in circumstances where there had been no appearance, and that was the critical point, by the defendant in the relevant courts. The majority of the Supreme Court decided there was no reason to part for the rule that had been stated in DICY, or to hold that there should be a separate rule for the enforcement of judgments in personam and insolvency proceedings. Lord Collins said that the doctrine in Cambridge Gas did not justify the result which the Court of Appeal reached. So far, so good, no one can quarrel really with that because clearly Lord Collins with respect was right to say that any change in the subtle law of the recognition and enforcement of judgments in personam obtained in default of appearance was something that needed legislative change and not for judicial innovation. So far, so good, the actual decision however in Cambridge Gas did not support the wider proposition that fraudulent preference claims and avoidance orders in insolvency proceedings generally escaped the common law rules requiring personal or in rem jurisdiction. But having applauded what he referred to as Lord Hoffman's brilliantly expressed opinion in Cambridge Gas and his equally brilliant speech and another case H I H, Lord Collins nevertheless went on to hold that Cambridge Gas had been wrongly decided and that there was no basis for recognition of the order of the US bankruptcy courts in the Isle of Man. For the purpose of my premise tonight, the concern to my mind must be whether Rubin is an example of where the Court, milly by expressing views about an issue not before it has sown confusion. The facts in Cambridge Gas were totally different from the facts in Rubin. In Cambridge Gas you had an Isle of Man company that voluntarily had submitted to chapter 11 proceedings in the United States where there had been an order made by the United States Court saying that the chairs in the Isle of Man company should be vested away from a shareholder and in third party court. That was totally different from the issue under consideration in Rubin and that has caused not just in the UK and in the Isle of Man but in many commonwealth jurisdictions real problems in insolvency proceedings. What for example is the position in commonwealth courts which are barmed by decisions of the Privy Council rather than the Supreme Court. Only last week for example a judgement was given by the Court of Appeal in Forbermuda in proceedings brought by a liquidator and a large cross border insolvency where the point was raised as to whether not the standing Rubin, the ratio of Cambridge Gas, whatever it was and there was quite a lot of debate about that was nonetheless binding on the Bermudian Court. The consequences and concerns have also been raised by practitioners that if Rubin indeed represents the orthodoxy then the only option for insolvency office holders will be to open parallel proceedings in other jurisdictions and to engage in litigation in these jurisdictions raising the spectre of proliferation of proceedings and courts. The consequences for schemes of arrangement could also be considerable but that is a concern. I comment that the statement by Justice of Appeal owned the former law justice owned in this jurisdiction in the Bermudian case that I just mentioned is really to the point of my thesis. He said, with respect to the many distinguished judges who individually have had to grapple with the problem on a case by case basis over many years, the collective product of their endeavours is a poor service to creditors and debtors alike in coping with the serious, urgent and costly pressures of insolvency. As Lord Collins and many others highly experienced in the field of insolvency law have demonstrated and urged, international agreement and statutory implementation is the way to go about it, not piecemeal judicial legislation. So ending on a negative there in relation to my case studies, that indeed is a concern if the collective product of these endeavours is viewed as providing a poor service to creditors and debtors. Moving as they say swiftly on, let me just close by saying a few words about oligarchs. The way this comes in, only a few words, this comes in really under the second of Lord Philip's headline points. The proposition that this country's interests, that its laws and its lawyers should be involved in resolving not merely domestic disputes but also disputes arising in other jurisdictions. That is so, and in my view is a good thing, not because of a perceived arrogance that English courts provide the best justice in commercial cases with an international element. Or even that it is good business for lawyers that cases should be tried here. Rather, it reflects the fact that the UK is one of the world's leading financial centres and that commerce and financial services are of vital importance to the UK economy. And a prestigious judicial and legal system in which the international financial community has confidence is an important factor which contributes to London and indeed contributes to the UK's position as a preeminent financial centre. Now, one of the reasons for the rash of oligarch and other litigation in the English courts has been the growth of emerging markets, particularly in the former states of the Soviet bloc and other countries in the Far East. And their need to attract Western capital and find acceptance in world markets. That is shaped, in my view, the litigation landscape. Transitional economies traditionally face severe short-term difficulties and development constraints. These, as we know, include lack of sophisticated legal systems, lack of entrepreneurship skills, and during the early years of transition, at least, widespread corruption, racketeering, filling the vacuum left by former communist regimes. It's perhaps not surprising that against that background, many participants in emerging market transactions have chosen the English courts as the jurisdiction into which to litigate their disputes. These can frequently involve either big personality cases, where one billionaire oligarch is suing another for huge sums in the fallout between the two, or where a bank or other institution is complaining about alleged misappropriations from its funds by former directors. Of course, not everyone can come and litigate here. Jurisdiction is only accepted by the English courts on a principled basis. An instructive recent example of the stringency of the approach is the Supreme Court's recent decision in VTB capital against New York Street Trek, where an English-incorporated and regulated bank, majority owned by a Russian state bank, was held not to be entitled to bring talk proceedings in England against a Russian businessman resident in Moscow. On the grounds that even if in English law govern the alleged torts, the key issues were factual and all those issues were focused on Russian witnesses and events which occurred in concerned Russia. Sometimes the inquiry can involve the delicate question of whether there is a real risk that justice will not be obtained in the foreign jurisdiction by reason of lack of independence or corruption of the justice system there. There have been a number of cases of which Churnian Deropaska decided by my brother, Mr Justice Christopher Clark, as he then was, who is sitting in the fifth row, is a classic example. These jurisdiction battles in the context of what might loosely be called oligarch litigation are numerous and the recent Privy Council case of Altimo holdings against, and I can't pronounce this, Kirin's mobile telephone is an example. In Berezovski against Abramovich, leave to serve out of the jurisdiction was not necessary. According to press reports, and some people sitting here might be able to confirm this, Mr Berezovski was lucky enough to spot Mr Abramovich and his bodyguards wandering into Hermes luxury store in Sloan Street to buy a few luxury items, no doubt. And so Mr Berezovski was able to pop in and serve the claim form personally on Mr Abramovich. Or at least that's how the story goes. By this time, Mr Berezovski was a fugitive from justice in Russia and had claimed asylum in the United Kingdom. Wisely in those circumstances, Mr Abramovich did not attempt to challenge the English Court's jurisdiction on the grounds that England was not the appropriate place for the case to be heard since the factual focus of the case was Russia. That was no doubt a wise decision because although the case was indeed very much a Russian story, there was no way in which Mr Berezovski could go back to Russia without being put in prison. Oligarch cases are fascinating, involving as they do vibrant characters, bold allegations and huge amounts of assets at stake against a background of what might euphemistically be described as unusual circumstances. But on the whole, despite the factual complexity, they tend to raise few issues of English law and once the facts are unraveled, my experiences at least, is that the issues of foreign law are often almost irrelevant. Indeed, in the Berezovski case, I think the only issue of Russian law that I decided or attempted to decide related to the certainty of contractual terms and even this on my factual analysis was unnecessary. But we should be proud nonetheless that in accordance with the long-standing tradition of the English courts, the English courts do entertain these cases contrary to some suggestions that have been made in the press, they don't detract from the resources of the UK courts but on the contrary underline the calibre and integrity of the English courts and the English system. And may I close by just quoting from what the Daily Telegraph said only this week in relation to the latest Ukrainian oligarch battle and I'm told that now of the favour of the month is Ukrainian oligarchs and not Russian oligarchs. And I quote, the hearing of the case in London cements the city's position as the world's legal capital and then quoting from the lawyer, the oligarchs love the English court system because it is transparent, incorruptible and they have access to many of the best lawyers in the world. What's not to like about that? Thank you very much indeed, Lady Justice Gloucester. That was fantastically informative, a very impressive analysis and very market based. So thank you very much. On behalf of ANO, I'm in the litigation department at ANO. I wanted to thank you for coming to speak to undergraduates today and to many senior lawyers and judges. Very privileged to have one of the country's most senior judges here and I think also speaking as a female lawyer and I think for female undergraduates a real role model in terms of your career at the bar and on the bench. Just picking up on a couple of themes, certainly the clients, our clients, banking and finance clients are a lot more sophisticated it seems at the negotiation stage so when they're looking to decide which courts, which law they may choose and that's the debate between arbitration and litigation. I do believe that the ISDA guidance is a result of enforcement issues but who knows if the EU sign up to the Hague Choice of Court Convention that may be a step in the direction of balancing out enforcement concerns. But they are looking in much greater detail at judgments and many of your judgments and it's a really competitive market and I would just sort of say just in terms of our clients, you can't underestimate how much attention they pay to, last week I was talking to New York bankers and they weren't even lawyers and taking them through law justice, Morbix decision and so on. So they're really looking at how the English courts approach many of these issues in a great deal of detail. So if you're an undergraduate you would be considering many of these points at the negotiation transaction stage let alone when you may go through your litigation seat and if you qualify as a litigator so important to transaction lawyers and also to litigators. Final point I was just going to say is that thank you so much for being such a great ambassador for English law and the English court system externally. I've sat in a lot of meetings with continental colleagues in Brussels and elsewhere and it's great to have such a great advocate making the case for the English court system and English law vocally and repeatedly. And I think it's a message that needs to be made and continue to be made in the face of challenges such as Cecil, the EPO, the recast regulations and all these things coming down the track. It's just been great that you have been at the forefront of putting a view across in your role as head of the commercial court in particular. So thank you very much for coming to speak to everybody this evening. Thank you.