Understand Your Rights. Solve Your Legal Problems
Warsteiner was advised on the investment by Luther, while Binnewies Henkelmann carried out certification.
Founded in Augsburg by Andre Klan and Cathy Hummels, Hye sells ‘flavoured functional water’ that has been enriched with vitamins, minerals and fruit and plant extracts. The start-up’s existing investors prior to Warsteiner’s involvement include Little Lunch founders Denis and Daniel Gibisch.
The purchase of a minority stake in Hye comes as part of Warsteiner’s continued focus on expansion. Since the private brewery’s founding in 1753, the bulk of its strategy has been centred on acquisitions enhancing its core beer business, but it has also sought out investment opportunities in new business areas.
GRUB BRUGGER advised Hye with a team led by partner Hendrik Wolfer.
Hendrik Wolfer, Grub Brugger:
Hye is still a very young start-up. We brought together the views and interests of the founders and provided legal support for the negotiations with Warsteiner’s M&A team. I have worked successfully with Hye’s founding team in the past because of this shared history the founders already had experience with transactions. Therefore we are a well-coordinated team and have been able to set up a very lean process.
Due to the complexity of such transactions, the advisory effort for newcomers is usually intensive, which was not the case here. We were therefore able to concentrate on the corporate and contractual aspects for which I was responsible; IP issues were handled by my partner, Dr. Michael Jilek. Since all parties involved were very willing to find solutions, the transaction was closed quite smoothly.
A start-up already has a different corporate culture than a large and globally known company. When such differences meet, it requires a lot of understanding of the perspective of the other side. All parties involved have managed this excellently here. In this way, the combination of the innovative team from Hye and the experience and size of Warsteiner will be an ideal cooperation.
My wish for Hye is that sales can be multiplied in the shortest possible time with the new investment. This will open up the functional beverage market in Germany and Europe.
Ward Hadaway also advised the MBI team, while Womble Bond Dickinson and Tax Advisory Partnership supported Enact and Gotelee advised the seller.
SEA Transport is a family-owned port services and maritime haulage business that provides services to the maritime container sector. Since its founding in 2000, the company has grown to an operational footprint of 100,000 sq. ft., including an 82,000 sq. ft. bonded warehouse on Felixstowe port in Suffolk.
The acquisition will retain the incumbent founding family members of SEA Transport while supporting additional growth in Felixstowe at the same time as extending the firm’s business model to further UK ports in a controlled expansion.
“We are delighted to acquire SEA and provide the investment needed to support the expansion of the business to additional ports around the UK to create a national platform providing specialist port services and maritime haulage,” said Felix Connolly, investment director at Enact. “We are looking forward to supporting the founding family members and MBI team to deliver further growth and development of the SEA brand.”
Gavin Jones, GJC Advisory:
SEA Transport was built by the founding directors and has grown by providing exceptional customer care to clients. The team has worked hard to build the reputation of the business and they have a fantastic customer base that has centred around this amazing customer service.
It was apparent early in the process that the vendors had a clear value expectation and transaction certainty was important to them. Listening to the client and ensuring they got the right deal at the right time was a key priority for us. It was such a fantastic business that we truly wanted them to get them the deal they deserved. Lots of advisors have the right contacts and can push an MBI through but retaining the reputation of the business and keeping these high levels of customer service post purchase was a priority for us.
It is important to work closely with the client and be transparent about what they need and what they are looking for. Using an advisor who understands the market and being honest about client values and expectations is what is important. We focus these findings on building and articulating a detailed buy-in plan to generate funder interest and confidence. By presenting a solid MBI plan to the right funders, in the right way, we can negotiate the right terms for the management group. This gives the best chance of making the transition to company ownership happen.
Our expertise spans debt financing, equity financing and everything in between. We have plenty of experience and have seen and helped businesses in all sorts of situations, which means we have the skills to respond to whatever the needs of the client are. Some advisors do not have that knowledge and are limited in the funding options available, which means vendors can get stuck in situations that might not be the best arrangement for them or the future of the business.
Our expertise spans debt financing, equity financing and everything in between.
We believe in being that energetic advisor. During this transaction we got along with all the firms involved amazingly. Tenacity and good communication are needed and I think the speed at which the deal went through is testament to the strength of the relationships forged with the advisory team. We always kept close to each other and to the client; putting an arm around a shoulder when things got intense went a long way. Strong financials, governance and detailed growth plans coupled with the right advisors is gold dust – or ‘the secret sauce’ as we like to coin it at GJC.
The deal has been made through BM S.p.A., one of the Beta Group companies. RaffaelliSegreti Studio Legale assisted the seller.
Helvi is a company based in Sandrigo (VI), Italy, which manufactures industrial welding machines, plasma cutting machines, professional battery chargers and accessories. This acquisition will expand the offer of the Beta Group, leader in the production and marketing of tools and equipment to be used in the mechanical, industrial maintenance, and car repair sectors.
Arrigoni Legal Atelier assisted Beta Group on all legal aspects of the operation with a team led by Bruno Arrigoni (Founder and Managing Partner), supported by Partner Mauro Arrigoni and Associate Carolina Pasotti.
Bruno Arrigoni Arrigoni Legal Atelier:
As our brand says, we are a ’Legal Atelier‘. We do not have the complex structure of a large law firm, and at the same time we do not consider ourselves a ’boutique‘. “Atelier” wants to underline our vocation to conceive different legal architectures and solutions each time (as you could do with a painting or a sculpture) at the basis of the operations entrusted to us. We do manage them integrally, both with internal and external resources, and that is what we have done in this deal as usual. Our distinctive side (and the role we play) is easy to explain: technical skills, today, can be purchased almost everywhere; what is hard to find is the big picture. We think we have it.
I believe that one of our added values is the ability to understand the dynamics and needs of the manufacturing industry from an operational point of view. It is not just a matter of legal knowledge and technique, but of tailor-made solutions that take into account, first of all, the specific industrial reality to be approached from case to case. The importance of one legal aspect over another in a deal can dramatically vary from company to company: a mechanical company, rather than a chemical company, requires different analyses and actions, as well as from a legal point of view. We do not propose ’standard‘ solutions, and we do not begin from our templates; we start by studying the industrial reality we have to take care of.
The deal has great synergistic effects for the Beta Group, which as a manufacturer initially dedicated only to professional tools has in recent years increasingly extended its offer to a series of products that belong to the world of ’tooling‘, but giving a broader sense to this word and its concept. Welding machines, in a context of strengthening and expansion of the reference market, are for example the natural complement to the abrasives sector, but also to that of electrical equipment, in which the Beta Group is currently engaged. As Beta Group’s claim states, this is certainly a well done deal.
The Herd Group is a Surrey-headquartered vehicle rental firm that has seen significant year-on-year growth since the business was founded in 2014. The firm, which now operates throughout the UK through its 30-strong team, has created the Herd Group Employee Ownership Trust (HG-EOT) to ensure continuity across all areas of its business and enable the Herd brand to remain in place “for years to come” in the words of Herd Group CEO Nigel Schroder.
“Within our industry sector we see so many businesses being swallowed up by larger competitors or taken over by outside investors when they reach a certain size, in terms of both their fleet and profit returns,” Schroder said in a statement. “Invariably, the original business and the culture of that business are destroyed, broken up and diluted, in order to be absorbed into the buying business or restructured under an investor. The people that built the original business become a number and the culture that created the success is forgotten.”
Sagars Accountants advised the firm on tax and accountancy matters with a team led by partner Kate Naylor.
Lawyer Monthly had the pleasure to speak with Kate Naylor at Sagars Accountants Ltd to give us some further insight into this transaction:
The key aspects initially were making sure the stakeholders understood the concept of an EOT, and what it meant for them personally, but also for the employees both now and into the future. There are some great tax benefits both for the selling shareholders and for the employees in being EOT-owned. The selling shareholders do not pay any tax on the disposal of a controlling interest in a trading company to an EOT, and employees can be paid a tax free bonus of up to £3,600 per annum by a business held by a qualifying EOT.
However, setting aside the tax, it is vital that such a big move is done for the right reasons and that it suits the business. Having established this, there are a number of technical considerations to check in terms of the rules relating to EOTs, and seeking HM Revenue and Customs tax clearance is an important part of the project.
It is very important that there are key employees who understand and appreciate the EOT concept and want to get involved as trustees or directors to help lead the business into the future. An invariable part of the move to employee ownership is that employees are stepping up into greater levels of leadership and responsibility and will be fundamental in the future growth and success of the business.
Nigel and his team at Herd had worked very hard to get to a point where they knew who would be great candidates for the roles, and so this aspect went really well. They had given a lot of thought as to how they would position this with the team, and it was really appreciated as it is a fantastic opportunity for them. We have seen situations where this has not really worked, and this can place a lot of unhelpful strain on the business post-EOT, causing focus to be on making changes to the leadership team rather than growing and developing the business.
We can be on hand as your professional advisors to field any questions from the employees and to ensure they do have a thorough understanding of what EOT ownership really means.
Nigel and his team at Herd had worked very hard to get to a point where they knew who would be great candidates for the roles, and so this aspect went really well.
It worked really well – the majority of our work was at the start, preparing the clearance for HMRC, ensuring the concept could work from a tax perspective and protecting the long term health of the business. In the middle, the legal team worked incredibly hard to deliver the transfer into employee ownership before Christmas. Now we are working with the Herd team to sort out all of the compliance aspects of the new structure and offering any guidance as needed.
I think that the future looks great for the Herd Group. It is an exciting business with great plans and ideas; a really fun brand. Moving to EOT ownership represents quite a major shift for the management team, with new responsibilities and roles, leading to greater engagement in shaping the future of the business. I cannot wait to see where it goes from here.
We love to advise owner-managed businesses, and in particular (from my perspective) it is fantastic to be advising owners who are buying, selling, merging or reconstructing their businesses. There are so many angles to consider, and we pride ourselves in giving the all-round advice that is needed without lots of jargon. Understandable advice that is effective and delivers the key objectives of the key stakeholders is at the foundation of what we do.
Norton Rose also advised EIB.
The investment, which represents EIB’s largest ever financing for high-speed telecommunications in Africa, will be used to aid MTN’s expansion programme in bringing 4G coverage to Nigeria and expanding broadband access in line with its Ambition 2025 strategy. Over 74 million customers are expected to benefit from the expanded digital communications infrastructure, which is targeted at the Lagos and Ogun states.
“We are committed to leading digital solutions for Nigeria’s progress,” said Karl Toriola, CEO of MTN Nigeria. “This requires the continuous upgrade and expansion of our infrastructure to enable us to deliver superior service. The €100 million financing agreed with the EIB will accelerate 4G coverage, enhance network capacity and drive innovation that will benefit our customers.”
UUBO acted as Nigerian counsel to EIB with a team led by banking and finance partners Yinka Edu and Onyinye Okafor, together with senior associates Victor Samuel and Modupe Balogun, as well as associate Toluwalope Adedokun.
Lawyer Monthly had the pleasure to speak with Onyinye Okafor at Udo Udoma & Belo-Osagie to give us some further insight into this transaction:
UUBO acted as Nigerian counsel alongside Norton Rose Fulbright (who acted as English counsel) to the European Investment Bank (EIB) (the ’lender’), in connection with its €100 million financing to MTN Nigeria Communications PLC (the ’borrower’ or ’MTNN‘). The loan is to be utilised by MTN to, among other objectives, expand the borrower’s 4G mobile broadband network in Nigeria. Our role included advising EIB on the transaction from a Nigerian law perspective and conducting a limited scope due diligence on the borrower. This required us to review the transaction documents and coordinate CPs, advise on tax issues and foreign exchange issues.
In financing transactions generally, the commercial objective of the parties is a major factor in structuring the transaction and addressing any obstacles that may arise during it. This will also help to avoid long-winded negotiations. In some instances, in identifying these commercial objectives, parties’ objectives may be aligned, and in some instances, the objectives might not be aligned. Therefore, as a lawyer, understanding each party’s commercial objective would help in completing the transaction timely, overcoming obstacles and bottlenecks and significantly reducing negotiating time.
(a) Foreign exchange liquidity is another key consideration in structuring large financing transactions in Nigeria. Exchange control exists in Nigeria and many of the borrowers generate revenue in Naira. Structuring transactions to deal with this currency mismatch and access to FX early on in transactions would ensure that foreign exchange risks and payment default risks are largely mitigated in transactions.
(b) Other considerations include perfection requirements such as stamping and how parties plan to mitigate stamping costs. Stamping could create huge and unanticipated costs for the transactions, and since these sorts of costs are borne contractually by the borrower, it is important to consider how payment of stamping costs could be addressed in the transaction. Other factors to consider would include regulatory issues where the borrower is a regulated entity; tax exemptions that could apply in view of a lender’s status, or structuring transactions in a manner that ensures that they qualify for tax exemptions.
(c) It is also important to keep in mind the disbursement/closing timeframe of the parties and to ensure that all corporate searches and due diligence are completed and conditions precedent documents or evidence are provided as early as possible so the transaction can reach financial close at the estimated timeline intended by the parties.
As a lawyer, understanding each party’s commercial objective would help in completing the transaction timely, overcoming obstacles and bottlenecks and significantly reducing negotiating time.
Bottlenecks are typical in large transactions, especially where a lender is not familiar with the relevant jurisdiction. To mitigate such bottlenecks, it is important that the lawyers in the transaction inform the relevant parties about the peculiarities of the jurisdiction that could impact the transaction. Identifying these issues and discussing them with the parties will help address most obstacles that could cause delays or even truncate transactions. In relation to this transaction, some of these key considerations which I mentioned above were identified and addressed promptly and this helped overcome one or two obstacles that could have impacted the transaction significantly.
I would say that we have garnered a lot of experience advising on major transactions and have been involved in some major telecommunication financing, as well as transactions involving development finance institutions such as the lender. In summary, our experience spoke for us, and in the Nigerian market we are well known for our expertise in banking and finance. Our team is comprised of experienced and knowledgeable partners and associates who have been ranked globally and have advised on several cross-border transactions. We have also advised many leading banks, financial institutions and large corporates and multinationals. Our experience and knowledge were brought to bear on this financing.
The successful completion of this financing round is expected to enhance MTN’s network infrastructure and contribute to its growth and provide better connectivity for the Nigerian telecommunications industry.
Do you have any other comments to make about this operation?
We thoroughly enjoyed working with EIB and MTNN on this transaction, as well as other local and foreign counsel, and we look forward to working on more transactions that would lead to growth in the telecommunications industry as well as in the overall Nigerian economy.
The airline was left with $2.2 billion of liquidity and a debt reduced by $6 billion, or 35%. The operation involved a total of $16 billion in liabilities and 38 debtors, including the airline’s passenger and cargo subsidiaries.
Based out of Santiago, Chile, LATAM was created through the merger of Chilean and Brazilian airlines LAN and TAM in 2012. It filed for restructuring under Chapter 11 in May 2020 after a loss in demand created by COVID-19 pandemic restrictions and began raising funds to stay afloat. In June 2022 the airline received court approval for an $8 billion capital increase, including exit financing, which it had raised through the issuance of convertible bonds.
To facilitate the completion of the Chapter 11 process, LATAM obtained an exit financing package for a total of $4.25 billion. This included a $500 million revolving credit facility and a $1.1 billion five-year term loan, in addition to a bond issue in two tranches for a total of $1.15 billion. These tranches will mature in 2027 and 2029 respectively. LATAM was also awarded two bridge loans for a total of $1.5 billion, which will mature in five and seven years from the restructuring closing date of 18 October 2022. LATAM Airlines used the funds obtained to settle its existing debtor-in-possession lines of credit, with the remainder used for general corporate purposes.
Local bondholders were supported by White & Case, while the official committee of unsecured creditors was represented by Dechert. The ad hoc group of claimants (who are now LATAM’s largest shareholder, as a group) were advised by Kramer Levin Naftalis & Frankel in the US, and by the Santiago-based firm Bofill Escobar Silva Abogados. Coeymans, Edwards, Poblete & Dittborn also advised the ad hoc group.
Bofill Escobar Silva Abogados advised the claimants with a team comprising partners Jorge Bofill, Ricardo Escobar, Vanessa Facuse and Sebastián Yanine, as well as associates Cristóbal Cibie, Mirenchu Muñoz, Stefan Goecke, Sebastián Contreras and Sebastián Bofill.
Jorge Bofill, Bofill Escobar Silva Abogados:
Our team oversaw all Chilean legal issues and provided strategic advice for the ad hoc group of claimants. Eventually, the ad hoc group of claimants became the largest holder of LATAM claims in the Chapter XI procedure, to the extent it had the ability to singlehandedly approve or reject any reorganisation plan proposed by LATAM.
From very early on, we engaged Arturo Poblete and his team from Coeymans, Edwards, Poblete & Dittborn to assist with the corporate law and securities law aspects of the advice, while we took the lead on the cross-border insolvency issues. Our team also assisted with anti-trust, insolvency and civil procedural law and tax law analysis, especially during the design and implementation of the plan.
The needs of our client required addressing a myriad of highly technical issues. We advised in the use of barely tested cross-border insolvency rules, the paths for enforcement of a foreign reorganisation plan, the structuring of new financing for the debtor during the Chapter XI proceedings, the backstopping of the debtor’s exit financing, the negotiation of support for the debtor’s reorganisation plan, among other major tasks that required involving experts from all our firm’s practices, who all rose to the occasion.
This speaks very highly of the diversity and quality of our professionals, and their strong international background, which is at the heart of our firm’s well-known expertise in complex cross-border cases.
The vast experience of our cross-border litigation team in the recognition and enforcement of foreign judgments, insolvency-related measures and arbitral awards proved critical in assessing the strength of each party’s position during the plan’s negotiation phase. In addition, our international mindset and excellent specialty practices like anti-trust, administrative law and tax helped the ad hoc group of claimants to understand and negotiate agreements effectively with the various parties involved. This was something we could only do thanks to our firm’s boutique approach to clients, which significantly reduces the potential for conflict of interest.
The needs of our client required addressing a myriad of highly technical issues.
The key objective was recovery for our client, the ad hoc group of claimholders. In achieving this, financial and commercial considerations tend to drive negotiations, but any proposal must first be structured in a legally feasible and practical way, and then once accepted, the agreement must be documented and implemented impeccably.
In this exercise, key considerations include reconciling conflicts between laws of the jurisdictions involved, accurately estimating the process and timing for implementation, navigating government agencies, documenting agreements that protect your client and anticipating and mitigating risks of all sorts.
The biggest challenge was producing a reorganisation plan that reconciled two very different legal systems in matters of shareholder rights and public policy limitations, and that afforded creditors their fair share of payment.
Under US federal bankruptcy law, creditors are entitled to full payment before any shareholder recovers anything. This rule is called the ’absolute priority rule’ and because it belongs to a federal statute, it trumps the corporate law of a state. Since shareholder rights are a matter of state law in the US, these are overridden by the absolute priority rule. Thus, in a US reorganisation, voting quorums and pre-emptive rights of shareholders are not an obstacle for the implementation of a plan of reorganisation.
However, implementing in Chile a reorganisation plan that involved overriding Chilean shareholder rights was uncharted territory. While strong legal arguments may have ultimately led to successful enforcement of the plan in Chile, there were material risks of delays based on a potential expansive interpretation of public policy controls by lower-tier courts on implementation of foreign cross-border insolvency measures and reorganization plans.
On this issue, our firm played a key role in assessing the strength of the ad hoc group of claimants’ position if they pursued a reorganisation plan on their own and its ensuing implementation in Chile. This helped in convincing LATAM and other parties that this was a feasible alternative that our client was prepared to undertake if LATAM chose not to accommodate the ad hoc group of claimants’ expectations in the debtor’s reorganisation plan. Ultimately, our client and LATAM found common ground and the ad hoc group of claimants supported LATAM’s reorganisation plan.
Our firm played a key role in assessing the strength of the ad hoc group of claimants’ position
Not all parties were left satisfied with the proceedings. Our role was to assist Kramer Levin in the push for a reorganisation plan that was feasible under US and Chilean law, and that gave the ad hoc group of claimants the best value they could get, understanding that an impairment of their claims was inevitable.
This involved talks with legal and financial advisors to parties with opposing interests. Our focus in these conversations was in assessing the strength of the other parties’ positions and curbing their expectations through providing them with recurrent reality checks.
Likewise, we provided the ad hoc group of claimants with legal advice that provided the necessary confidence in their position to push for better terms from LATAM, who was brokering the deal for a reorganisation plan with all parties involved.
The airline’s high executives explained that the reorganisation plan ensures LATAM’s long-term sustainability, and that the airline emerged from the reorganisation with a strengthened financial position and its unrivaled connectivity network in South America. Analysts explained that LATAM emerged as a more efficient group, leaner and with a modernised fleet, with the most extensive connection network and loyalty program in South America.
I can imagine this does not please LATAM’s competitors, but one would expect this to be good for the industry, as it will be pressed to continue improving.
From the stakeholders’ side, the reorganisation plan meant a considerable change in its shareholder structure. A large group of creditors accepted convertible notes in payment of their claims, and many invested new money in LATAM together with other parties. The success of these bets is tied to LATAM delivering on its business plan, which was key in determining the economics of the reorganisation plan.
[ymal]
In my view, the reorganisation proceedings laid bare critical shortcomings of the Chilean insolvency system, which hopefully leads to its revision. My focus would be in allowing additional time to reach a reorganisation agreement for cases of higher complexity, and to include UNCITRAL-based regulation that allows swift implementation of foreign reorganization plans.
Beth Brindley at Blacks Solicitors discusses legal apprenticeships, her experience and why more people should consider non-traditional routes into the legal sector.
As a vocational career, many people often have an idea that they want to work within the legal sector, but there can be barriers that are presented by the more traditional routes, such as university. Legal apprenticeship schemes allow for diversity and can give people who might not be able or want to go to university the opportunity to still achieve their dream career.
Legal apprenticeships have seen a huge increase as more people become aware of the opportunities that are available. In fact, according to The Lawyer Portal, there has been a 40% increase in the number of apprenticeship opportunities made available in 2021, and there are an estimated 2,000 apprenticeships offered nationally across around 400 employers. They present an alternative way to become a lawyer, paralegal, or chartered legal executive without having to study law at university.
Legal apprenticeships are government-backed and employer-designed schemes that involve working and studying. Ultimately, a legal apprentice should be able to end up qualifying in whichever legal field they find most interesting.
There are a number of legal apprenticeships that are available. For example, at Blacks Solicitors there is a choice of three apprenticeships schemes: Level Three Paralegal, Level Seven Solicitor and Graduate Solicitor. The Level Three Paralegal apprenticeship takes two years to complete and the entry level is 96 UCAS points. The Level Seven Solicitor apprenticeship takes six years to complete and is suitable for anyone with no prior legal education. The entry level is 128 UCAS points. And finally, the Graduate Solicitor Apprenticeship takes 2.5 years to complete and is suitable for those who’ve already completed their law degree or PGDL.
After realising that I wanted to become a lawyer and that university was not for me, I carried out a lot of research to understand the different options that were available, which at the time were not well publicised. I found the solicitor apprenticeship route via BPP University, which led me to Blacks Solicitors.
Ultimately, a legal apprentice should be able to end up qualifying in whichever legal field they find most interesting.
I am the first apprentice to qualify at the firm through the Level Seven Solicitor Apprenticeship, and I was one of the first to apply when it was first offered at Blacks in 2016. The course gave me significant opportunities to experience life in a variety of different teams, gain valuable experience in a well-respected law firm and receive payment as I learned.
In general, as a legal apprentice you are likely to spend around 80% of your time working in the firm and 20% studying with the academic provider.
The scheme is designed to present apprentices with the opportunity to gain a range of experience to develop legal skills, commercial awareness and knowledge of different areas of law. However, it is important to remember that each apprenticeship will differ in terms of roles and responsibilities.
For example, I started as a Solicitor Apprentice in September 2016 and throughout my apprenticeship I gained experience across a variety of teams before qualifying in the Corporate and Commercial team. My apprenticeship gave me the required skills to specialise in commercial contracts including T&Cs, supply contracts, distribution contracts and licence agreements. I have also secured expertise in intellectual property and trade mark registrations.
For anyone who knows that university is not for them, it is important to remember that there are still options when it comes to achieving their dream career. As with many sectors, the apprenticeship route presents a fantastic opportunity to leave the traditional education system and learn on the job.
Whilst academia and learning is critical for a job in the legal sector, the workplace requires an additional set of skills which are not currently taught in our education system. Apprenticeships offer the best of both worlds, with the academia broken up with practical, hands-on experience.
After six years, I have the same qualifications as somebody who has followed the ‘traditional route’, in addition to no student debt and an invaluable skill set that most university graduates do not have.
[ymal]
Working closely with a provider such as BPP University and a good law firm that places its people at the heart of business decisions will also mean that apprentices are able to balance their time between study, work and general life. This in turn means that not only are you being paid, but that you can still experience the same things that university students do.
As with any route into a new career, there are always important considerations to take into account. Always make sure to research the company that you are planning to apply to. Whilst the apprenticeship route presents lots of opportunities and benefits, it can be very stressful.
A good law firm that appreciates its people will ensure that you have a good work-life balance and that the proper support is there whenever you need it. This also includes the culture – working somewhere with a good culture where employees get involved and socialise with each other will make settling into the job more straightforward and enjoyable.
Securing as much experience as possible will also be extremely beneficial to anyone looking to apply for a legal apprenticeship. For example, during my application process, I went to the local magistrates’ court and sat in, and also became involved in a week-long mock case at my college.
You should not be scared to throw yourself into the legal world, but at the same time, that is not always possible. Using resources such as social media platforms and networking events can also contribute to an impressive CV and show your dedication to the profession that you have chosen. More information on legal apprenticeships can also be found on the Blacks Solicitors website.
Beth Brindley, Solicitor
City Point, 29 King Street, Leeds, LS1 2HL, UK
Tel: +44 01133 222809 | +44 07542 684721
Beth Brindley is a solicitor in the Corporate and Commercial team at Black Solicitors. She deals with a range of commercial matters including the drafting and reviewing terms and conditions and other commercial contracts, advising on intellectual property-related matters and assisting with an array of music law matters.
Blacks Solicitors is a 28-partner firm that provides a wide range of legal services to commercial and private clients in Yorkshire and across the UK. Blacks provides advice on corporate and commercial law, commercial property, leasehold enfranchisement, planning and highways law, employment and human resources, commercial and civil dispute resolution and litigation, residential and Buy-to-let conveyancing, wills and probate and family law.
Yoshie Midorikawa, partner at Miura & Partners, provides her own insights on the Japanese ADR landscape in this article. What developments are on the horizon for this year?
Traditionally, most legal disputes between Japanese companies were solved either before Japanese courts or by voluntary settlements between the parties privately. With the increasing number of Japanese companies doing business globally, the forum for dispute resolution for Japanese companies has slightly shifted from Japanese courts to international arbitration. In litigation before Japanese courts, the parties need to present their case in Japanese, which becomes an issue when Japanese companies wish to choose the forum for dispute resolution in an international contract with international business partners.
Aside from this, the lack of a global mechanism to ensure enforceability of foreign judgments is also a reason why arbitration might be a preferable method of international dispute resolution. Therefore, I observe that more Japanese companies have begun taking ADR, and especially international arbitration, more seriously.
The JIDRC was launched in 2018 as the first ever organisation designed for international arbitration or other types of ADR in Japan. Before the launch of the JIDRC, it was not easy for parties of arbitration in Japan to find an appropriate place to conduct hearings and other conferences. The JIDRC offers a state-of-the-art experience for the dispute resolution process, and it streamlines hearings both online and in person.
When it comes to dispute resolution procedures in Japan, litigation has been chosen in most cases, but as mentioned earlier, Japanese parties often choose arbitration due to the enforceability of awards under the New York Convention. Although Japan has not often been chosen as a seat of arbitration, an increasing number of Japanese companies are recognising the advantages of resolving disputes in their place of business. To respond to this demand, the Japanese government has been supporting the promotion of arbitration in Japan since 2017. The establishment of the JIDRC was also supported by the government.
Civil conciliation (minji chotei) is a dispute resolution procedure that differs from mediation (a private dispute resolution procedure facilitated by a neutral third party without the involvement of the state). Civil conciliation under Japanese law is a court procedure, and thus requires the involvement of the state. However, civil conciliation shares some of the characteristics of mediation in the sense that it aims to resolve disputes privately and by agreement of the parties.
I observe that more Japanese companies have begun taking ADR, and especially international arbitration, more seriously.
Even though Japanese litigation procedures can be time-consuming, Japanese companies have often chosen litigation for resolving disputes, likely due to both the fact that there is trust in the court process and trust that the court will take initiative to encourage settlements within the litigation process. Civil conciliation, in which the court is also involved and aims for settlement in a closed-door procedure, seems to match the needs of Japanese companies, which tend to prefer avoiding the excessive process of proving their claims.
In the case of litigation, it is common that the parties need to submit pleadings multiple times, and in some cases, if the legal or factual issues are complicated, it may take years before the court renders the judgment at the court of first instance. Such a procedure is not required for civil conciliation, allowing a more flexible resolution of the dispute.
To date, our team has often been involved in cases that are large in scale and extremely complex, such as accounting fraud, energy-related investments, information technology services and construction projects, where not only legal arguments but also fact-finding to support the claims are often important. In order to pick up meaningful facts and evidentiary materials from a complex series of events, an understanding of industry practices and business models is essential. It is not an easy task, as each case requires a new understanding of the energy industry, the construction industry, the information technology industry, and other businesses.
However, in a highly complicated dispute about oil field development that I handled when I was a junior associate, the manager of the client told me one day that I understood the facts and background of the case better than he did, despite the fact that it was he who was in charge of the project. At that moment, I felt that while reconstructing and presenting the case to the decision makers in the dispute resolution process was challenging, it was also fulfilling when I did it right. Since then, I have followed a simple principle in doing my job: “Understand the case better than your client”.
[ymal]
Civil litigation procedures in Japan are currently done mostly offline. For example, lawyers still need to file a case by hand or by post, and online hearings are not available. Court proceedings came to a temporary halt in 2020 when COVID-19 placed restrictions on this routine. Not only have court proceedings normalised after this critical situation, but in 2022, the Diet passed a bill to amend the Code of Civil Procedure to accommodate the demands for enabling civil litigation procedures to be conducted online. The reform of the related legislation will be implemented in a few phases, enabling, among other things, online submission of documents and online witness hearings in Japanese litigation. Part of this reform will come into force on 1 March 2023.
In addition, a bill will be submitted to the Diet this year to amend the Arbitration Act to align it with the UNCITRAL Model Law on International Commercial Arbitration (2006) and to bring it in line with the Singapore Convention, which gives enforceability to settlements based on a certain degree of mediation. On a more practical note, in 2022, a ‘business court’ has been established in Tokyo for the first time in Japan to aim to handle business-related and international cases involving intellectual property, commercial matters and bankruptcy. As the dispute resolution field in Japan becomes increasingly international and digital, I expect that the updated system will offer an effective dispute resolution experience both domestically and internationally. I hope to be able to be part of this change by representing clients before Japanese courts.
Yoshie Midorikawa, Partner
3F East Tower Otemachi First Square 1-5-1, Otemachi, Chiyoda-ku, Tokyo 100-0004
Tel: +81-3-6270-3515
Fax: +81-3-6270-3501
E: yoshie.midorikawa@miura-partners.com
Yoshie Midorikawa was admitted to the Bar in Japan in 2007 and New York in 2015. Her areas of expertise include many aspects of litigation, alternative dispute resolution, corporate governance and commercial disputes, and her insights on Japanese law have been published widely. The Legal 500 Asia Pacific listed her as one of the Next Generation Partners in Japan for Dispute Resolution in 2023.
Miura & Partners was established in 2019 as an independent law firm in Tokyo with the aim of creating a new platform for innovative and business-minded professionals. Ever since, the team has handled various cutting-edge cases in the areas of commercial disputes and M&A. Asian Legal Business has listed Miura & Partners as one of the FAST 30: Asia’s fastest-growing law firms in 2021 and 2022.
In light of the ruling, Rosling King partner Kate Rigby examines the prospect of success regarding perversity of findings when trying to challenge the assignment of claims in the event of insolvency.
The Supreme Court has recently refused permission to appeal on the basis that the application, in the case, did not raise an arguable point of law which could lead to a successful outcome for the appellant and that the appellant had no real prospect of success on the issue as to perversity. This was the outcome in Lock v Stanley and Another (Re Edengate Holmes Ltd) [2022] (16 September 2022).
This decision sends a strong message reinforcing the high threshold required to successfully challenge the assignment of claims, as well as the Courts’ hesitance to interfere in the commercial decisions of insolvency practitioners.
The claimant, Mrs Lock, was a creditor and former director of Edengate Homes (Butley Hall) Ltd (in Liquidation) (‘the company’), a firm whose only asset was a claim against her and members of her family. In March 2012, Mrs Lock and her husband formed the company as a special purpose vehicle to acquire and develop Butley Hall, Prestbury, Cheshire, which was a Grade II listed mansion house. The company was unable to raise sufficient funds to meet its liabilities under the project and by November 2015 was insolvent. On 26 November 2015, the company went into creditors’ voluntary liquidation and liquidators were appointed.
Following an investigation by the liquidators, it was discovered that there were potential transactions at an undervalue and statutory preference claims against the claimant, her husband and others. The liquidators went on to assign these causes of action and statutory claims to a specialist insolvency litigation financing company, Manolete Partners plc (‘Manolete’).
Mrs Lock sought an order to set aside this assignment under Section 168(5) Insolvency Act 1986 (‘the application’), which states that if any person is aggrieved by an act or decision of the liquidator, that person may apply to the Court, and the Court may confirm, reverse or modify the act or decision complained of, and make such order in the case as it thinks just. The application was based on the notion that (a) Mrs Lock had the required standing and (b) the liquidator’s decision to enter into the Assignment was perverse due to his failure to take legal advice or appropriately survey the market for potential assignees (including allowing the claimant to make a competing offer).
His Honour Judge (HHJ) Halliwell, of the Supreme Court, first considered whether as creditor of the company, Mrs Lock did in fact have the standing to make the application. On examination, he concluded that she did not. He agreed with the liquidators’ argument that she did not have standing as her own interest was adverse to the class of interest of the creditors as a whole. Her interest was in relation to herself and her complaint was in fact with the “proceedings against herself and her family as opposed to the contractual relationship between the liquidator and Manolete”.
This decision sends a strong message reinforcing the high threshold required to successfully challenge the assignment of claims, as well as the Courts’ hesitance to interfere in the commercial decisions of insolvency practitioners.
Whilst HHJ Halliwell held that Mrs Lock did not have the required standing to bring the application, he did consider whether the assignment itself should be set aside for perversity. Following the test set out in re Edencote Ltd [1996] 2 BCLC 389, HHJ Halliwell considered “whether the liquidator’s conduct [amounted] to something so utterly unreasonable and absurd that no reasonable person would have done it”. He also noted the judgment of Sir John Vinelott in Edennote where he stated: “it is only in very exceptional circumstances that the court will interfere with the exercise by a liquidator of his discretion to sell the assets of an insolvent company”.
Ultimately, it was held that the test had not been satisfied. The liquidator had approached another creditor and there was no evidence to prove that better terms may have been achieved with another party. Therefore, the assignment to Manolete could not be considered perverse. Mrs Lock went on to appeal both aspects of the judgment in the Court of Appeal.
The Court of Appeal upheld the decision of HHJ Halliwell and refused to set aside the assignment to Manolete. In doing so, they agreed with his reasoning that Mrs Lock did not have standing nor had the threshold for perversity been met.
The Supreme Court dismissed the application, concluding that it did not raise an arguable point of law which could lead to a successful outcome for the appellant and that the appellant has no real prospect of success on the issue as to perversity.
The decisions of both the Court of Appeal and the Supreme Court reflect the Courts’ longstanding reluctance to interfere with the commercial decisions made by office holders, including commercial decisions made by an insolvency practitioner such as a liquidator.
Ultimately, the liquidator is appointed to act instead of the directors of a company and in doing so they will take commercial decisions for the benefit of the company/liquidation.
Furthermore, it confirms that any party seeking to challenge an assignment made during insolvency proceedings must clear a very high threshold to satisfy the test of perversity – a fact which is likely to give confidence to both insolvency practitioners and litigation funders alike.
Kate Rigby, Partner
55 Ludgate Hill, London, EC4M 7JW, UK
Tel: +44 02072 468012
Kate Rigby is a partner in Rosling King’s Dispute Resolution Group. Kate has wide-ranging experience in general commercial litigation, commercial fraud and asset tracing, professional indemnity cases and property litigation.
Rosling King LLP is a London-based law firm specialising in serving the needs of financial institutions, corporates and individuals.
What new challenges does the art world face amid rising digitalisation and continuing global conflict? Below, Professor Felicity Gerry KC & Fahrid Chishty take a close look at these developments and their impact on cultural heritage.
As modern criminal lawyers, we have found that the art and antiquities trade deserves close attention. This multi-billion-dollar market increasingly gives rise to questions of criminal law. For instance, how should domestic laws combat art fraud carried out on cryptocurrency platforms? How are private collectors to guard against purchasing ‘blood antiquities’ linked to transnational organised crime? And how does the international community respond to the destruction of cultural heritage in conflict zones?
According to studies, the annual transaction volume in art and antiquities is approximately $60 billion. During the COVID-19 pandemic, the contemporary art market proved remarkably resilient and witnessed an appreciation in the region of 15.1%. Post-pandemic, the art market continues to boom, with projections pointing towards more economic growth in the wings.
The imperviousness of the art market to economic decline may owe to the proliferation of online auctions in recent years, which not only served as a saving grace during the height of lockdowns, but also established a long-term infrastructure for executing and expediting end-to-end transactions between art houses and purchasers. For buyers and sellers, these are welcome developments. But art market participants would do well to keep an eye of the novel challenges looming on the horizon.
In terms of digitisation, the focus falls inevitably on the digital marketplace. A significant inflection point for the global economy, the digital marketplace has revolutionised our commercial practices. It has provided new platforms for transacting, which have expanded and accelerated business operations internationally. But its advent has also initiated strict controls at the domestic level, which often take the form of complex legal and regulatory regimes targeting a triad of evils: money laundering, terrorism financing and antiquities trafficking. Whilst necessary, these legal frameworks impose stringent duties on art market participants, which can create obstacles in terms of compliance, due diligence and risk management.
Art market participants would do well to keep an eye of the novel challenges looming on the horizon.
In much the same vein, the entry of cryptocurrencies and non-fungible tokens (NFTs) into mainstream economy has reconfigured traditional approaches to law and dispute resolution in the art market. It has blurred the contours of contract and fraud law, allowing their substantive provisions to bleed into one another. For instance, we are seeing litigation play out in which digital assets are increasingly implicated in disputes relating to fraudulent misrepresentation vis-à-vis the provision of services. Evidently, cases of this nature require holistic, sophisticated solutions that draw on expertise in the criminal law in addition to traditional commercial principles.
On the international stage, the nexus between organised crime and the trafficking of cultural property is becoming increasingly visible. Over the past decade, terrorism networks have carried out acts of mass pillage at cultural heritage sites across the Middle East and South-Central Asia. Very often, the looted assets have been commodified and smuggled into western art markets with the assistance of collaborators in various jurisdictions.
For example, during Daesh’s occupation of large swathes of Iraq and Syria in 2014-19 countless Assyrian, Mesopotamian and Graeco-Roman artworks were reported to have been trafficked nautically into Europe. More recently, Taliban rule in Afghanistan has seen a rise in the illicit export of Hellenic and Buddhist statues across the porous border into Pakistan, and from there into the Middle East, Europe, and the US, where they sell for millions often under the auspices of reputable institutions. As such, there is a real risk that cultural assets from the MENA and South-Central Asia region have passed through criminal hands in transit to western art markets and are connected to terror financing and even narcotics and firearms trafficking.
The nexus between terrorism, transnational organised crime and the arts is inextricably bound to policy positions assumed by both governments and non-state actors. This brings to the fore the realisation that illicit trafficking experience ebbs and flows, corresponding with the policies on cultural heritage protection and export controls enacted in each jurisdiction. In regions where regimes with militant or iconoclastic ideologies prevail, the risk of trafficking and destruction of cultural heritage remains at its highest.
On the international stage, the nexus between organised crime and the trafficking of cultural property is becoming increasingly visible.
Against this landscape, criminal law has a critical role to play in developing protocols for the prevention of trade in blood antiquities. In much the same vein, private collectors need to monitor compliance with domestic legal frameworks when purchasing cultural assets whose provenance is tied to conflict zones or high-risk jurisdictions, the trade in which can come with significant criminal sanctions and financial confiscation.
Internationally, again there is an interaction between law and art. Treaties and legal instruments prohibit the destruction of cultural heritage and impose duties on contracting states to positively protect these sites. Consider, for instance, the Hague Convention for the Protection of Cultural Property in the Event of Armed Conflict 1954, which imposes safeguarding duties on States Parties amid military hostilities. Meanwhile, International Criminal Law has complemented these protective measures with a penal regime. The Rome Statute 1998 makes plain that the destruction of cultural heritage may constitute war crimes in particular circumstances involving attacks on historic monuments and buildings dedicated to religion, education, art, science, or charitable purposes where they are not military objectives. Attacks directed at civilian objects and the act of pillaging, respectively are also proscribed.
Against this backdrop, it is pertinent to reflect on the situation in Ukraine. Since February 2022, Ukrainian authorities have repeatedly reported that Russian forces have deliberately destroyed cultural heritage sites and looted ancient antiquities from its museums. If the preliminary evidential picture is inculpatory, foreshadowing criminal charges, the testing of this will increase the international jurisprudence on cultural heritage crimes and should cause collectors to increase wariness over objects for sale.
[ymal]
The world of art and antiquities is rife with criminal law issues in 2023. Advancements in the digital marketplace have given rise to unprecedented opportunities and novel challenges for buyers, sellers and domestic governments in kind. Meanwhile, terrorism, black markets and war have opened new vectors for the illicit transmission and trafficking of artefacts and cultural goods. Afghanistan and Ukraine are hotspots of risk where cultural heritage is in danger of destruction, deconstruction or pillage and we anticipate a greater need for criminal law advice for collectors in this specialist area.
Professor Felicity Gerry, Barrister
Fahrid Chishty, Advocate
20 Old Bailey, London, EC4M 7AN, UK
Tel: +44 07956 853737
E: fgerryqc@libertaschambers.com
Professor Felicity Gerry KC is an international KC at Libertas Chambers, London and Crockett Chambers, Melbourne, largely defending in serious and complex criminal trials and appeals, often with an international element. She is a high-profile barrister who is regularly sought out by broadcasters for media commentary upon international legal issues, especially related to international crimes, terrorism and homicide and corporate responsibility for human rights abuses.
Fahrid Chishty is an advocate with Libertas Chambers and practices across its core specialisations, with particular focus on serious and organized crime, fraud and financial crime and public international law. Beyond his Court practice, Fahrid has also developed an extensive advisory practice and has been instructed by business magnates, politicians and members of foreign royalty.
Libertas Chambers are specialists in business crime, professional discipline and asset recovery. Its team offers a range of expertise across a national presence. Libertas Chambers emphasises its modern approach to legal services, utilising new technology and a streamlined business model to assist major corporates, financial institutions and individual clients in complex cases.
