Iconic lifestyle brand Birkenstock Group has sold its entire business to L Catterton, the largest global consumer-focused private equity firm, backed by Financière Agache, the holding of the Arnault family, shareholder with a significant interest in LVMH. Owners Christian and Alex Birkenstock remain involved in the new Birkenstock Group. The transaction value was not disclosed but the transaction ranks among the biggest transactions in Germany this year.

As reported in The Guardian, Christian and Alex Birkenstock said: “For the next 250 years we need partners sharing the same strategic and long-term vision as the Birkenstock family. In L Catterton and Financiè re Agache, we have found those partners. They bring both a deep understanding of the details of a manufacturing business that is all about quality and a respect for brands with a long heritage like ours. We look forward to taking the next steps with our partners and carrying our family business into an even brighter future.”

Paris-based data centre operator DATA4 has raised a record €620 million in debt financing. The DATA4 Group now has access to almost €1 billion to fund and execute its 2024 growth plan, with the aim of doubling its turnover in five years and becoming one of the European leaders in the data centre market.

The financing was secured from three banks: Deutsche Bank, Société Générale and SMBC. These additional resources will enable the Group to accelerate its responsible growth strategy throughout Europe – which involves doubling the power capacity of its Paris campus from 100MW to 200MW – making it the most powerful data centre campus in Europe. DATA4 also aims to significantly develop the number of data centres on its current campuses located in France (Marcoussis), Italy (Milan), and Spain (Madrid), and to expand into Central Europe and Scandinavia.

An Interview With Linklaters, Legal Advisers to DATA4 Group

How long has your firm been working with the DATA4 Group?

We have been working on the asset for almost ten years, having particularly advised AXA IM Real Assets at the occasion of its entry to the share capital of DATA4 in 2012 and, more recently, on the acquisition by AXA IM Real Assets of the entire share capital from Funds managed by Colony Capital in 2018. This transaction was led by Nicolas Le Guillou (M&A Paris), Edouard Chapellier (Tax, Paris), Nicolas Gauzès (M&A Luxembourg) and Melinda Perera (Capital Markets and Banking Luxembourg).

We have been delighted to continue following the history of the Group within the context of this important step in the company’s development (as stated by the CEO of DATA4) with the €620 million in debt financing, on which our firm has been assisting the Group. The team was led by Melinda Perera as a matter of Luxembourg law alongside De Pardieu Brocas Maffei as a matter of French law, with a team led by Yannick le Gall (Real Estate Finance).

Our Paris M&A team, led by Nicolas Le Guillou and Jacques Mazé, has assisted the Group in parallel on the Group’s presentations to lenders to facilitate their understanding of the Group legal structure.

What expertise did your team bring to the table?

Given our longstanding relationship with DATA4 Group, we combine a deep knowledge of the objectives, needs and constraints of the Group with our legal expertise.

What issues have the potential to arise when advising a company on a case like this?

Given the magnitude of the borrowing (€620 million) with Deutsche Bank, Société Générale and Sumitomo Mitsui Banking Corporation, it was key to find the right balance between the strategic objectives and investment expansion targeted by the DATA4 Group in Europe and the contractual terms of the financing documents, including the security package in favour of the external lenders.

Project Worldwide, an employee-owned network of creative agencies, has expanded its reach in the esports and gaming sectors with the acquisition of OS Studios. The New York-based OS Studios provides creative, production and consultancy services to brands looking to expand into live and remote gaming and esports broadcasts. Its clients include prominent gaming studios and platforms such as EA Sports, Activision Blizzard, Take-Two Interactive and Twitch.

Also based in New York, Project Worldwide is an independent, global network of wholly owned creative agencies that employs over 2,200 people in 52 offices. The acquisition of OS Studios will expand the network’s capabilities in the US and internationally.

An Interview With Josh Wong, Director, Investment Banking at JEGI CLARITY

How have gaming and esports companies like OS Studios performed through COVID-19?

Generally, very well. The native digital nature of gaming and esports allows these types of businesses to naturally pivot live experiences into the digital and online space. While secular trends demonstrated significant tailwinds before COVID, the social distancing environment has forced all businesses to re-evaluate remote delivery models and accelerated the adoption of gaming and other forms of interactive media.

What are the primary challenges and diligence areas investors are looking at in esports?

Understanding IP concentration and looking for assets that will benefit from broad industry trends without being dependent on individual gaming titles. Also, understanding that these business models have attractive economics as they scale and that gaming and esports is only the beginning. As these businesses prove their creative and technical capabilities, the aperture opens, and larger non-endemic clients look to businesses like OS Studios to produce work outside of the gaming and esports worlds.

Are transactions like this one expected to increase in the gaming and esports industry?

Absolutely. The industry is nascent and experiencing tremendous growth, but highly fragmented. Strategic players and financial sponsors are looking for top notch capabilities in the space. They are leveraging M&A as a tool to build end-to-end platforms to reach gaming audiences through authentic experiences.

To learn more about this transaction please contact Josh Wong at jwong@jegiclarity-us.com or (212) 754-0710.

Private equity firm NorthEdge has acquired Birmingham-based Correla, a technology and data services business aimed at the sustainable energy centre.

The acquisition will see NorthEdge acquire Correla following the divestment of the subsidiary by the Gas Industry’s Central Data Service provider Xoserve. The divestment will see Xoserve become a specialised contract management and assurance company as part of a restructure of its existing operations. Correla will continue to deliver services back to Xoserve through a commercial contract. The deal will also see Correla invest in its data platforms and expand into alternative energy markets through organic growth, alongside the potential for acquisitions.

An Interview With Tim Dineen, Lead Practitioner & Interim CxO at Crosslake Technologies

Describe your involvement in tech due diligence side of the deal.

Subject-matter expert with responsibility for the successful execution of the due diligence examination. This includes challenging unverified or optimistic assertions; reconciling related, but independently provided information; and aligning my colleague’s expert inputs to ensure that we provide a coherent overall report.

Why is Crosslake ideal for acquisitions of this kind?

Crosslake only staffs its technical due diligences with senior industry experts. This ensures that all our practitioners have close familiarity with both the technologies, industry contexts, related pitfalls and nuances that are often material to such deals. An expert-led principle also enables our teams to provide qualified and (if needed) robust questioning to in-house experts who may have operated for many years without peer challenges.

We follow our assessments with detailed reports that are accompanied by thorough explanatory read-out calls. These provide our clients with an opportunity to clarify the extent of the values that were identified and the potential impacts of risks that were observed, enabling clear alignment with their investment thesis and risk appetites. We find that these can be a revelation, but this personalised form of communication is greatly appreciated.

What issues often arise in deals such as this, and how do you overcome them?

Challenges typically fall into two categories: (i) Having an excessively commercial focus (to the detriment of its technology capabilities); and (ii) an overly narrow outlook leading to short-sighted technical decisions or missed opportunities.

A strong commercial focus is not a bad thing, but this is often accompanied by executives who do not have a technical background overlooking technical needs (such as the pay-down of technical debt) and using a vocabulary to make decisions that is lacking. This is resolved by the assignment of interim CxOs who have the experience and authority to push back on these louder voices.

Another common challenge is that R&D leaders have ascended to strategic roles from insular backgrounds. This can result in blind spots emerging, such as unawareness of security vulnerabilities, attachment to older ways of working, a lack of an architectural lens between product and engineering disciplines, etc. These issues generally require bespoke remediation also reliant on expert guidance to right-size the solutions.

MinterEllison recently advised Metrics Credit Partners (“Metrics”) on the successful $190+ million institutional placement undertaken by its ASX-listed MCP Master Income Trust (ASX:MXT).

Metrics is an Australian based alternative asset management firm specialising in direct lending to Australian companies. It has approximately $7 billion in assets under management and is a leading participant in the Australian private credit market.

The proceeds of the placement to wholesale investors are expected to enable Metrics to continue to provide a valuable source of finance to Australian companies. Metrics Managing Partner Andrew Lockhart noted that the offer to investors was oversubscribed and commented that: “The positive response to the offer reflects robust demand from investors for sources of attractive and stable income and is a great endorsement of the quality of our investment team and the strong track record of the fund.”

The MinterEllison team was led by Michael Lawson (Partner, Funds), Nicole Sloggett (Partner, Capital Markets) and Yoni Garson (Senior Associate) with support from Patrick McElhone (Lawyer) and Nikita Harlalka (Lawyer).

An Interview With Michael Lawson & Yoni Garson at MinterEllison

How does having a long-standing relationship with the client help in a deal like this?

It is invaluable to ensure the smooth running of the project. Firstly, like with any project that is tied to strict deadlines and turnaround times, having close relationships with internal stakeholders assists in making sure that all issues are dealt with in the smoothest way possible. This could be something simple like automatically knowing who at the client organisation would be the right stakeholder to answer a query. Secondly, the closer we are to clients, the greater depth of understanding we have of their business – this allows us to give commercially relevant advice quickly and draw out key issues and negotiating points with counterparties at an early stage.

What are your main concerns for your client when advising them through an equity raise?

They are both legal and commercial. On the commercial side the main concern is ensuring that the client is well-placed to achieve their commercial timetable and in as stress-free a manner as possible. This is usually achieved with detailed project management. From the legal perspective, it is important at all times to ensure that all regulatory issues are covered and that these issues are acknowledged and properly navigated by all counterparties from early on in the transaction.

How do you ensure that everyone on the multidisciplinary team is on the same page throughout the course of the deal?

We are lucky to have a very large funds team with a strong depth of practice across alternative strategies, with both wholesale and retail experience. This is complemented by a fast-moving and experienced capital markets practice. These two practice groups work together regularly on a range of fund raises and therefore are used to working as a seamless team with very clear workstreams divided according to proper expertise. This allows us to ensure that the entire team understands the working parts of a project, but also provides that each workstream is being managed by the best person internally with the correct expertise. Frequent contact and a collegiate relationship across these practice groups allows us to manage these types of transactions efficiently.

Maven Capital Partners has invested £2.5 million in Cardinality, a Surrey-based software and service provider.

Cardinality has developed a data ingestion and analytics platform called Perception that enables its customers to run, manage and derive value from datasets in real time and at massive scale.

Luke Matthews, investment director at Maven, said: “Cardinality offers an excellent opportunity for the Maven VCTs to invest into a scaling business, for which the growth dynamics of the data integration sector provide a positive outlook.

“The company has seen good commercial progress to date and its revenues are backed up by a strong pipeline and growing recurring revenue base.”

An Interview With Confidas People, Adviser on the Deal

In what capacity did your firm advise on the Maven Capital Partners investment?

Confidas People provided Human Capital Planning and Management Due Diligence on the investment, helping the investors get a good understanding of the management team and advising how to best align, engage and support the team through the value creation journey.

Did your team face any challenges? If so, how did you overcome them?

The remote working during COVID was potentially a challenge. However, it has been something we have adapted to very well and our work has become more detailed and clinical as a result. We will of course return to face-to-face meetings to a certain extent, but as remote working is so efficient it will remain an important part of how we operate. It has allowed us to expand our reach, working with more European-based investment houses efficiently and effectively.

What are your first priorities when advising on a deal like this?

In this type of deal the first thing we are focused on is the scalability of the individuals, identifying potential blockages or barriers and advising how to mitigate or manage those and making sure people are in the right roles to allow them to play to their strengths. Then we look at the gaps in the team and how best to support management on the scale-up and growth journey. We do this by getting a good understanding of track record and experience, assessing individual scalability and potential, and analysing how that picture aligns with the business’s goals for growth.

RGE Services, a fire and electrical compliance services provider primarily working with the public sector, has funded its primary buyout by securing an equity investment from YFM Equity Partners (YFM). The deal is the second from the PE house’s £80 million Buyout Fund II which closed just 12 months ago and another example of YFM’s strong regional presence, with this investment based in the South East of England.

The buyout was led by Scott Craig, managing director, who has worked alongside founder Roger Greene for the last 15 years, joining as an electrician engineer and working his way up through the ranks. Scott will be supported by incoming chair Stuart Black and by Matt Aspinall, who joins as finance director. Roger Greene will remain a shareholder and investor in the business, continuing in his current strategic support role.

The vendor was supported by Transworld Corporate Finance (sell-side adviser); with legal advice provided by Pepperells Solicitors and Keystone Law.

Delta-Simons provided specialist health and safety advice on the transaction.

An interview With Alex Houldsworth, Principal Consultant at Delta-Simons

When assessing health and safety in a transaction like this, what do you look out for?

The key focus areas for due diligence will depend on the type of business being assessed and the nature of their operations. For example, a company using and storing large volumes of hazardous materials would require detailed focus on compliance with permits and safe systems of work for chemical handling. For an electrical compliance company such as RGE, the key areas of focus for our assessment were certifications, training, management systems and risk assessment, in order to assess how the business ensures their employees are safe while working on clients’ sites.

The interview or site visit stage of the process usually provides a good initial indication of the proficiency of a company’s health and safety management team and the internal health and safety culture. A company’s ability to provide the relevant documentation in an organised manner, understand and answer questions relating to health and safety, suggests a positive culture exists. Certified management systems such as OHSAS 18001 or ISO 45001 are also an integral part of H&S management.

How vital is due diligence here? What are the consequences if it is not conducted thoroughly?

The purpose of the due diligence process for this deal was to highlight to YFM areas of the business where material liabilities may be incurred as part of the investment, as early as possible in the transaction. The main emphasis of EHS due diligence has typically been focussed predominantly on environmental aspects. However, risks and liabilities associated with health and safety can have significant repercussions and consequences in the context of a transaction.

A business with poor health and safety policies, management or culture is more likely to experience incidents and fatalities and subsequent potential prosecution, fines or even (in the worst cases) custodial sentences for directors. Assessing health and safety issues as part of the transaction process will highlight potential risks as well as opportunities for improvement in order to reduce the potential for significant costs, business disruption or reputational damage further down the line.

Do you face any challenges when conducting due diligence in this area and how do you overcome them?

One of the key challenges in due diligence is being able to identify and separate non-material issues from the more significant potential deal-breakers and communicating the consequences of these to an investor. The aim of health and safety legislation is to reduce the potential for incidents or ill health, therefore even a seemingly minor non-compliance (e.g. poor training record keeping) could have significant repercussions in the event of a serious incident. Therefore it is vital to have regular, open discussions with the client throughout the process to ensure we understand the transaction and that they understand the possible consequences of our findings.

It is also not unusual to experience some degree of hostility from a target business when asking questions about their management of health and safety. However, this can be overcome by ensuring the target company is aware of the reasons for conducting the due diligence. Our aim is not to pick holes in existing policies and procedures, but to identify risks and areas for improvement which will form focus areas for an investor and target business to work on.

What other types of due diligence might be important to consider as part of a transaction?

Alongside health and safety due diligence, a significant core element of Delta-Simons’ work is environmental due diligence (EDD), assessing the environmental compliance of target businesses, as well as contaminated land liabilities associated with current and historical site use. Other aspects we consider for property-based due diligence include flood risk, coal mining and radon.

Environmental, Social and Governance (ESG) is also becoming a crucial aspect of M&A transactions for inevstors, as private equity and investment clients are becoming more aware of the need to address the wider impacts of an investment, including climate change, diversity and equality, ethical issues, social issues and supply chain.

How has the pandemic affected due diligence in the last year?

At the start of the pandemic in early 2020, the volume of transactions slowed as investors adopted a more cautious approach due to uncertainties around COVID. However, confidence soon returned and 2020 was the most successful year to date for our transactions team.

Site visits were limited at the height of lockdown in 2020. However, we quickly adapted to new ways of working including virtual audits and meetings, and ensuring our site visits were COVID-secure.

The real estate sector saw a huge increase in the number of transactions in the last 12 months, especially in the Industrial and Logistics sector, as a direct result of the demand for online goods during the COVID pandemic. This had a knock-on effect on due diligence in this area and Delta-Simons has been involved in a number of high profile transactions both in the UK and Europe.

The pandemic and talk of a green recovery has also focussed discussions around ESG due diligence, which will form a significant part of our transactional work going forward.

Aluminium and plastics extrusion business BWC Group has completed a management buyout (MBO) in a deal led by Fortus Business Advisors.

BWC Group produces goalframes for small-sided football goals, as well as aluminium profiles for a range of industries. The company has been trading for more than 20 years and the move will allow the phased retirement of founding shareholder Guy Barker.

The MBO was led by finance director Mark Barker and operations director Danny Varley.

Guy Barker said: "I’m pleased everything ran smoothly and am more pleased that Danny and Mark now have a great opportunity ahead of them."

Lead advice was provided by Mark Standish and Patrick Faughnan of Fortus Corporate Business Advisors. Legal advice to the vendor was provided by Mark Archer of Maddox Legal and the management team was advised by Laura Taylor of Freeths.

An Interview With Fortus

How long have you been working with BWC Group, and how did you advise them on this acquisition?

We have been working with BWC Group for nearly four years, helping them with their business strategy as they reorganised their businesses onto a single site in 2019. As part of our strategic work with Guy Barker, we advised him on his succession and retirement options, which led to the MBO transaction.

What sort of factors need to be considered when working on an MBO?

The key factor for making an MBO work is a motivated and ambitious management team who are prepared to take risks to develop the business further. In Mark and Danny, there was the ideal combination. The business also needs to be profitable and with good future potential, so that a deal can be structured.

Did your team face any challenges? If so, how did you overcome them?

There were some structural changes that needed to be dealt with before the transaction could proceed, and this was managed in a logical and tax-efficient manner working closely with Guy.

What are your first priorities when taking on a deal like this?

It’s important to understand that the wishes of the owner are aligned with that of the management team at the outset, and that everyone knows their role. An MBO can easily fail if there is not a full understanding of the opportunity and the risks at the outset.

How do you ensure that there are no pitfalls in the early stages of an acquisition?

Regular meetings, taking time with all parties to clarify full understanding, and making sure that concerns are heard and addressed.

What are your tips for ensuring that an MBO is completed successfully?

Owners should explore the MBO option as part of their succession planning as early as possible. This gives time to build the team and assess the viability alongside any other considerations.

Use experienced corporate finance advisors who will explain the pitfalls and opportunities, and then  guide you through the whole process.

Finally, make sure you also use lawyers who are experienced in these types of corporate transactions, so that they can provide expert support and guidance navigating the legalities of the deal.

The most significant aspect of the WIPO report is China’s leadership on filing activity. What does this mean and how will this shape international businesses and inventors?

The filing activity reflects China’s policy of encouraging innovation, assisted in part by the subsidies it provides for such innovations and IP protection. Innovation is widely considered as an essential element for a nation’s growth. This is reflected in the books Why Nations Fail (Acemoglu & Robinson, 2012) and New Asian Hemisphere (Mahbubani, 2008) where innovation and “creative destruction” were deemed essential for a nation’s progress.

Apart from China’s leadership, the WIPO report also mentions that 65% of the 2019 worldwide filings were from Asian countries. Notable of which is the lead of the Republic of Korea in resident patent applications per unit of GDP. While Asian countries have increased IP filings over the years, the WIPO report nonetheless show that the US and other Western countries have maintained their innovation and IP dominance.

All these high numbers reflect a wide appreciation of IP assets across the globe. This should translate to better policies and laws to fully protect and enforce IP rights.

The sector that dominated patent filing activity worldwide was “computer technology”, which is a good reflection of the past year. What should those in the tech industry be keeping an eye on in 2021?

The 4^th Industrial Revolution continues, as the tech industry is poised to continue growing in 2021. The WIPO Technology Trends 2021 in fact focused on Assistive Technology, noting the 17% average growth rate in this sector. According to the said report, assistive technology involves information technology, data sciences, materials science and neuroscience, with the products being consumer electronic goods ranging from communication to navigation and gaming.

Other areas of tech industry though will likely continue to grow, such as the commercial use of artificial intelligence in various industries with products in this area continuing to become mainstream.

The 4^th Industrial Revolution continues, as the tech industry is poised to continue growing in 2021.

How does the above impact IP in your jurisdiction?

While inbound IP filings were traditionally dominated by Western countries, recent trends show a sustained increase in inbound IP filings from Asian countries. Consistent with the WIPO report, China and the Republic of Korea have greatly increased their inbound filings in the Philippines. IP filings from the US, Europe, Japan and other countries that are traditionally strong in IP filings continue to file a high number of inbound Philippine IP registrations, however.

For patents, the Philippine IP Office has recognised global trends as exemplified by its release of specific rules governing biotech patents and information & communication technology-based patents. Graphic User Interface-based designs have also been allowed by the Philippine IP Office. This reflects the changing IP landscape, where less than ten years ago the standards for registrability of these technologies were uncertain in the Philippines.

Patent applications using the PCT (Patent Cooperation Treaty) system, which allows applicants to seek patent protection simultaneously in different countries, increased by 5.2%; how will this shape businesses IP strategies in the coming future?

Filings based on the PCT system for protecting innovation will continue to grow. The usual 30-month period for national phase entry, coupled with new International Search Agencies that are not too costly (such as the Philippine IP Office), works to the benefit of patent owners.

Every sound business IP strategy should consider the PCT system, as maximising the protection of patent rights depends on the protection obtained in countries. Patent protection in every, if not in key, market countries provides the opportunity for exclusive distributorship and licensing.

Is the above an indication of an ever-growing globalised world in the patent sphere?

Looking at the WIPO report, the increased patent filings through the PCT system is driven by China and other Asian countries. It seems that more and more countries are understanding the benefits of supporting innovation domestically, while also obtaining patent rights for them both locally and abroad.

Obtaining patent rights in various countries as an end goal can be viewed primarily as maximising the benefits provided by patent protection. In this view, the innovation is not only protected, but viewed as having the potential to generate income through commercialisation by the patent owner themselves or through licensing.

It seems that more and more countries are understanding the benefits of supporting innovation domestically, while also obtaining patent rights for them both locally and abroad.

Another view, though secondary, that can be taken in obtaining patent rights in various countries as an end goal is ensuring that research and development focus on substantial and worthwhile innovations. Having in mind that the patent application will be scrutinised by each country where patent protection is sought should guarantee in some way that the innovation is truly new and inventive and thus could withstand the rigorous patent standards of different countries. This can weed out minor innovations that may not pass the standards of various countries and thus not be commercially viable in the end.

The increased PCT system filings seem to point more towards the recognition that innovation is essential in progress and economic development rather than a globalised world.

What should businesses and inventors be taking from the report released late last year?

The tech industry will still lead in terms of innovation. Businesses should thus always be on top of developments in this area and be ready to adopt to the changing landscape.

One may look at the introduction of ride-hailing apps which disrupted the public transportation business; sharing economy schemes for room rentals disrupting the hotel industry; and online marketplaces disrupting the business of shopping malls and the vertical relationship between manufacturer, distributor and retailer. These disrupted businesses should adapt and adjust to the competition posed by the entry of these new tech-based industries. Those that have failed to adapt and adjust have resulted into business reverses and even closure.

Businesses should thus already have plans for the 4^th Industrial Revolution, but they should also have an eye out for what has been described as the 5^th Industrial Revolution where machine and mind will meet.

For inventors, they should be encouraged to innovate towards inventions that are truly novel and inventive and can thus be registered in various countries. This will truly maximise the benefits provided by patent laws, with their innovation possibly being the next innovation that can become an industry standard or even part of Standard Essential Patents.

What do you think will be on the horizon in the upcoming year, in the Philippines and globally?

The global COVID-19 pandemic has affected many businesses and likely the progress of many research and development projects. Nonetheless, it has also pushed innovation toward solutions to problems caused by the pandemic, whether it be medical issues or off-site work issues.

In relation to the tech industry, online commerce has practically become mainstream. With brick-and-mortar stores and malls closed and physical movement restricted, many have gone to online marketplaces, with specialised marketplaces springing about such as those dealing in second-hand items or those conducted through social media (so called “social commerce”).

While this development in online commerce provides many opportunities, IP owners should also be more vigilant in protecting their IPs. The current system of online commerce makes counterfeit items more accessible, and at the same time makes the identification of the real identity of infringers more difficult. Constant monitoring for infringing products on online marketplaces should thus be considered by IP owners.

Jose Eduardo T Genilo, Partner

Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW)

Address: 22nd Floor, ACCRA Law Tower, 2nd Avenue, corner 30th Street, Crescent Park West, Bonifacio Global City, Taguig, 1634 Metro Manila, Philippines

Tel: (632) 8-830-8000

Email: jetgenilo@accralaw.com

ACCRALAW is among the largest full-service law firms in the Philippines. Since its inception in 1972 it has grown to comprise around 170 lawyers and 170 non-legal personnel, with offices in Bonifacio Global City, Metro Manila, Cebu City and Davao City.

Jose Eduardo T Genilo specialises in Intellectual Property and Technology Law. He is involved in the prosecution of IP applications, enforcement and litigation. In 2021, he was named as an IP Expert by Asia IP, and in 2019 he was named as a Next Generation Lawyer by the Legal 500 Asia in the field of cybercrime, privacy, fraud and information technology.

From 1 January 2021, the rules of jurisdiction set out in the Brussels I Regulation ceased to be applicable. What were the most imposing changes that needed to be prepared for?

I believe this will mean furthering collaboration with specialists in other jurisdictions as we will have lost an acquired certainty for an inevitable uncertainty. The UK has become a third state for the purposes of Brussels I Regulation and as such, we cannot assume the same fluidity and recognition regarding enforcement.

Enforcement out of the jurisdiction will depend on a variety of factors which will need to be considered on a case-by-case basis. The situation will hopefully become clearer through legislation and development as issues arise.

A short-term effect is that practitioners involved in cross-border disputes with a UK/EU element will need to rely on the relevant provisions, treaties and domestic legislation and on the timing of the legal proceedings in question. It will be imperative to add clear jurisdictional clauses, especially in this initial phase and until clear precedents are set. Finally, we need to hope that the Ayala court understanding will be echoed by the EU courts. Early signs to that effect are mixed.

What needs to be shown in order to obtain permission to serve out of the jurisdiction?

The 10,000 feet rule is that documents must be served within the jurisdiction, i.e. England and Wales. There is no absolute right to serve a claim form out of the jurisdiction without the permission of the Court. Again, a clear service clause in an agreement could be of great assistance to avoid costly debates and cost of service.

The ability to serve a claim outside England is based on the fact that the court has jurisdiction to determine the dispute between the parties. Consideration needs to be given to the possible jurisdictional challenges, a good practice in any event. It will not sit well with the client to be turned down at this stage of the proceedings.

In determining the application, the court will need to be satisfied that three requirements have been met: whether there is a serious issue to be tried, whether there is a good arguable case and whether the court is the appropriate forum.

What role does the Hague Convention on Choice of Court Agreements 2005 play here?

A great role indeed! The position of the UK is that the application of the Convention vis-a-vis the UK will continue without interruption. It should be noted that the EU Commission has recently taken a different approach from the UK as to whether the Convention applies to exclusive jurisdiction clauses in favour of the courts of England and Wales that were entered into prior to 31 December 2020.

The Private International Law (Implementation of Agreements) Act 2020 received royal assent on 14 December 2020 and achieves the domestic implementation of the Hague Conventions. Therefore, service using this mechanism is available as it was before Brexit took place, and is of greater importance now as other avenues may no longer be available.

Post-Brexit, enforcing English judgments throughout the EU may be marginally more difficult than it currently is under Brussels Recast. What difficulties may be presented here?

From 1 January 2021 onwards, parties with an English judgment wishing to enforce within the EU will no longer be able to rely on direct recognition and enforcement, which was previously afforded to them under the Recast Brussels Regulation. Therefore, added difficulties arise in determining under which mechanism enforcement will be recognised. Options to be considered include the Hague Convention, bilateral treaties and local laws of the specific EU Member State.

In a nutshell: we will need to have local specialist knowledge in each jurisdiction in which we are attempting enforcement. This may affect times and costs for the clients and will likely also add an element of uncertainty increasing perceived resolution of the matter. Last month we had a valid order to execute in France and the French court requested additional documents to be translated, at great cost to the client, to rule that they needed more time to consider. In the meantime, the French entity we attempted to enforce upon entered administration, putting us in a queue of creditors as the French Court had not yet validated the UK order. Luckily with some persuasion, reason prevailed for the client, but it is certainly a sign of things to come.

In a nutshell: we will need to have local specialist knowledge in each jurisdiction in which we are attempting enforcement.

What factors may ameliorate these difficulties?

Being strategic from the start of the matter and ideally from the contractual phase. Having a good team of Strategic Alliance Partners in the local jurisdiction will certainly be advantageous, saving costs and time for the client. We have focused the development of ASV Law to that effect and early signs that it was the accurate move are already showing. A deeper understanding of the client’s real goal will help in defining where to start proceedings, as sometimes it may be worth bypassing the UK Courts altogether to secure execution if we identify a risk factor, such as administration or weak economic position of the defendant. Winning a case and not being able to execute the order is great for the lawyers (a win is a win) but often pointless to the clients!

Simon Vumbaca

ASV Law

Address: 1 Knightsbridge Green, London, SW1X 7QA

Tel: (+44) 020 7993 5450

Email: info@asvlaw.com

Website: www.asvlaw.com

ASV Law was established by Simon Vumbaca in 2011 and is an international law firm based in Knightsbridge, London. It delivers corporate, commercial and litigation advice to global clients, bringing parties together to facilitate settlements and mediation.

Simon Vumbaca is an award-winning lawyer with over 25 years of international experience and a reputation for delivering substantial corporate and commercial sector success. Qualified in multiple jurisdictions, Simon offers international clients strategy-led complex cross-border litigation and arbitration advice with great success.