UK Law and Practice Contributed by: Fergus Wheeler, Paul Yin, Tracy Liu and Medha Vikram, Latham & Watkins
6.5 Timing and Cost of Enforcement The appointment of either an administrator or a receiver can be relatively quick remedies pro - vided that the secured lender observes all con - tractual and statutory requirements. As a private remedy, the appointment of a receiver can be made on the same day as demand is made of the debtor. 6.6 Practical Considerations/Limitations on Enforcement Enforcements involve a “change of control”, necessitating diligence and structuring similar to M&A deals, including regulatory approvals, material contract reviews and tax planning. Understanding the intercreditor position of any other creditor classes is crucial. In UK mid-mar - ket direct lending, unitranche lenders typically control enforcement, but it’s important to con - sider any super-senior RCF or working capital facilities. Effective enforcement often requires manage - ment support. Early thought should be given to management engagement, incentives or alterna - tive teams. If any directors are uncooperative: • lenders may remind them in writing of their personal duties, which, under English law shifts towards creditors when insolvency, liquidation or administration is probable; and • in extreme cases, lenders could use voting rights under share security documents to remove uncooperative directors. Receivers, administrators or security agents will require indemnification and possibly up-front cost coverage and separate legal counsel. Insolvency is assessed on a company-by-com - pany basis, so both English and non-English
The courts of England and Wales do not gener - ally retry the merits of a recognised foreign judg - ment or arbitral award. However, a party must first bring a claim or application in England and Wales for recognition, after which the judgment or award becomes domestically enforceable. The recognition application process is typically straightforward, but parties can argue against recognition. Recognition may be refused based on statutory grounds or under common law. Grounds for refusal include: • fraud in procuring the foreign judgment; • contradiction with the public policy of Eng - land and Wales; • judgments related to taxes, or fines/penalties, or otherwise based on foreign laws consid - ered penal or revenue-related by English courts; • violation of natural justice principles; • improper service of proceedings on the judg - ment subject; and • lack of jurisdiction by the foreign court. For arbitral awards, specific Conventions or Statutes, such as the Convention on the Rec - ognition and Enforcement of Foreign Arbitral Awards, dictate enforcement requirements. Any irregularities in meeting these requirements can be challenged during the recognition application process in England and Wales. 6.4 A Foreign Private Credit Lender’s Ability to Enforce Its Rights A foreign private credit lender’s ability to enforce its rights under a loan or security agreement are no different to the ability of a non-foreign private credit lender to enforce their rights under a loan or security agreement.
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