Cheyne European Special Situations Fund Investments SCA & Ors v TMF Trustee Limited & Anor

A case-management stay is governed by a single question: whether it is in the interests of justice. Parallel proceedings alone are insufficient, but a strong risk of conflicting judgments may justify a stay, especially where the same parties and issues may give rise to issue estoppel and the foreign proceedings are advanced. The court should weigh the applicable law, savings in time and cost, prejudice from delay, and whether the claims can be separated. An exclusive English jurisdiction clause is important, but a claimant who is neither a contracting party nor entitled to enforce the agreement may not invoke it. A jurisdictional nexus and declaratory jurisdiction remain relevant. Where interdependent claims cannot sensibly be separated, the whole claim may be stayed until first-instance judgment abroad, with liberty to restore.

The claimants, beneficial holders of the company’s senior secured notes, sued the security agent and the company in England. They challenged enforcement steps taken after an alleged up-tiering transaction and relied on a proposed term governing the exercise of majority powers under an intercreditor agreement.

The defendants sought a case-management stay because the claimants had already brought related proceedings in New York challenging the validity of the up-tiering transaction under the notes’ indenture. The English claim included that challenge and a separate English-law claim concerning the intercreditor agreement. The central issue was whether the overlap, risk of inconsistent judgments and other case-management factors made a stay just, despite the agreement’s exclusive English jurisdiction clause.

Application granted. The whole English Claim was stayed until the New York Court determined the New York Claim at first instance. The stay did not automatically continue through an appeal. The defendants had permission to restore their application, and the claimants could apply to vary or discharge the stay following a material change of circumstances.

1. Applicable test. The court applied the single interests-of-justice test stated in Athena Capital Fund SICAV-FIS SCA v Secretariat of State for the Holy See [2021] EWCA 1051 Civ. The description of stays as rare and compelling reflected their exceptional character, rather than a separate prescriptive test. A stay could be temporary and capable of being lifted. The risk of conflicting judgments was not decisive merely because proceedings were concurrent, but could be a strong reason where it created serious consequences or an ugly rush to judgment.
2. Overlap and issue estoppel. Both claims required consideration of the same alleged breaches of the Indenture and overlapping bad-faith allegations. Applying the conditions summarised in MAD Atelier International BV v Manès [2020] EWHC 1014 (Comm), the court found a real prospect that a first-instance New York judgment would bind the parties on the common issues. The risk of inconsistent findings was therefore strong. The fact that New York law governed the Up-Tiering Claim and that the New York proceedings were substantially advanced further favoured a stay, consistent with Bundeszentralamt Für Steuern v Heis [2019] EWHC 705 (Ch).
3. Whole claim. The Up-Tiering Claim and Assenagon Claim could not sensibly be separated. The value of the 2022 SSNs and the accuracy of the valuation were relevant to both proceedings. A partial stay would require the English court to proceed on assumptions about the New York decision and would lose much of the benefit of avoiding duplicated evidence and inconsistent findings.
4. Jurisdiction clause and standing. Clause 34.1 of the ICA was construed consistently with clause 1.4. It applied to disputes between ICA parties and third parties entitled to enforce the agreement under clause 1.4(d). The claimants were not such Senior Secured Noteholders. Applying the no-look-through analysis in Secure Capital SA v Credit Suisse AG [2017] EWCA Civ 1486 and Galapagos Bidco SÀRL v Kebekus [2021] EWHC 68 (Ch), the registered holder, rather than beneficial owners, held the relevant contractual standing. Nevertheless, the ICA gave the dispute a connection with England and the court had jurisdiction to grant declaratory relief, as recognised in Caxton International Ltd v Essity Aktiebolag (Publ) [2025] EWHC 1477 (Ch). That factor was not decisive against a stay.