Agrokor D.D., Re

For a scheme of arrangement involving an overseas company, the court may have jurisdiction where the company is liable to be wound up in England and Wales under the Insolvency Act 1986. A sufficient connection may be established by English governing law, supported where relevant by an English jurisdiction clause. The court must also be satisfied that scheme creditors have sufficiently similar rights to constitute a single class and can properly meet to consider the scheme together. Where those requirements are met, and adequate notice has been given, the court may convene one scheme meeting under Part 26 of the Companies Act 2006.

Agrokor d.d., a Croatian company within a substantial Croatian and Dutch group, applied for an order convening a meeting of creditors to consider a scheme under Part 26 of the Companies Act 2006. The proposed scheme concerned the restructuring and novation of priority financing provided under a super priority facilities agreement following Croatian extraordinary administration proceedings.

The court considered jurisdiction, sufficient connection with England and Wales, notice to creditors, and whether the affected creditors formed one class. No creditor objected. The central issues were whether the court could exercise jurisdiction over the Croatian company and overseas creditors, and whether a single meeting was appropriate.

1. Jurisdiction. The court was satisfied that it had jurisdiction. Although Agrokor was incorporated in Croatia, it was technically liable to be wound up as an unregistered company under the Insolvency Act 1986. The court also noted, without needing finally to decide the point, that if the recast Judgments Regulation of 2012 applied, article 8 would provide a basis for jurisdiction over creditors domiciled in other member states where their claims were closely connected with claims against English-domiciled creditors.
2. Sufficient connection. A scheme involving an overseas company requires a sufficient connection with England and Wales. That requirement was met because the rights of the company and the scheme creditors were governed by English law. The non-exclusive English jurisdiction clause was supportive but not essential. Evidence that the scheme would probably be recognised and enforced in Croatia further supported its practical effectiveness.
3. Notice and class. Notice of the hearing was sufficient, having regard to the sophisticated and substantial nature of the international scheme lenders. The creditors formed a single class because their rights under the existing and proposed financing arrangements were materially indistinguishable. The availability of a modest lock-up fee did not prevent them from meeting and consulting together, since the option was open to all creditors.
4. Order. The court ordered that a single meeting be convened on 28 February 2019, subject to an amendment requiring scheme information to be posted online and emailed to each creditor within the specified timescale.