Vol 18 (2021) - Issue 2

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Irish Landlords Weather the Storm Brought by Monsoon CVA: Apperley Investments Ltd & Ors v Monsoon Accessorize Ltd, R.E.S.A.M. Cork U.C. & Anor v Monsoon Accessorize Ltd & Anor [2020] IEHC 523

Synopsis
The Irish High Court refused to recognise and enforce certain provisions of an English company voluntary arrangement ('CVA') as they related to Irish leases on the basis that to do so would be manifestly contrary to the public policy of the Republic of Ireland.
The court held that:
- Article 11(2) of Regulation (EU) 2015/848 of 20 May 2015 on Insolvency Proceedings (Recast) (the 'Insolvency Regulation') meant that the effects of any insolvency proceedings on the leases should be governed solely by Irish law;
- the creditors' decision to approve the English CVA was a 'judgment' which the Irish court was obliged to recognise with no further formalities under Article 32 (notwithstanding the conclusion reached in respect of Article 11(2) and where the effect of the CVA on the leases could not have been achieved applying Irish law);
- however, that recognition in Ireland was subject to the public policy exception in Article 33; and
- the right to make representations before property rights are interfered with was a fundamental principle of Irish constitutional law which had not been afforded to the Irish landlords by the CVA process, and the failure to do so was capable of attracting the public policy exception under Article 33 to refuse recognition.
On one level, the case is of limited direct importance because (i) by the time of the decision, Monsoon's CVA had failed and it had gone into administration, and (ii) by the time this article is published, the UK will have left the EC on 31 December 2020. However, the judgment contains an important and interesting discussion about (i)  recognition of main proceedings under the Insolvency Regulation in Ireland and other member states, and (ii) the public policy exception under Irish law.