Cheyne European Special Situations Fund Investments SCA & Ors v TMF Trustee Limited & Anor [2026] EWHC 2091 (Ch)

“Between April and June 2024, the Company acting with and/or for the benefit of Redwood Master Fund, Ltd. and Redwood Drawdown Master Fund III, LP took various steps in breach of the terms of the Indenture and with the consequence that €186,075,000 of SSNs held by Redwood (the “Redwood SSNs”) were irrevocably cancelled and €186,075,000 of new notes with purported seniority to the remaining SSNs were purportedly issued by the Company for the benefit of Redwood (the “Up-Tiered Notes” and the “Up-Tiering Transaction” respectively).”

“(a) The Purported Enforcement and Distressed Disposal Steps were invalid and ineffective because the Security Agent was not validly instructed to enforce the Luxco 2 Share Pledge by an Instructing Group. 29. Paragraph 5 of the Enforcement Notice states that the Security Agent was instructed by an Instructing Group to enforce the Luxco 2 Share Pledge. However, no such valid instructions existed and the Purported Instructions are not valid or effective: 29.1 Pursuant to the terms of the ICA, the Instructing Group must comprise both the Super Majority Super Senior Creditors and the Majority Senior Secured Creditors. The Majority Senior Secured Creditors are Senior Secured Creditors holding more than 50% of Senior Secured Credit Participations. 29.2 No such valid Instructing Group gave instructions to the Security Agent to enforce the Luxco 2 Share Pledge, because: i. Instruction was given by the Purported Instructing Group, being Redwood only. ii. Redwood was not and cannot have been the Majority Senior Secured Creditors as at the date of the Purported Instructions because they did not hold more than 50% of the aggregate Senior Secured Credit Participations of all Senior Secured Creditors at that date. iii. The Up-Tiered Notes are not (and were not) valid Senior Secured Credit Participations – with the result that Redwood as holder of the Up-Tiered Notes was not a Senior Secured Creditor – because: (a) the Up-Tiered Notes are invalid and issued in breach of the terms of the Indenture (as will be a matter for expert evidence and submissions in due course); or (b) the Redwood SSNs are not (and were not) valid Senior Secured Credit Participations because they had been irrevocably cancelled on 10 June 2024, such that Redwood as the former holder of Redwood SSNs was not a Senior Secured Creditor by then. iv. At the relevant time, the AHG, including the Claimants, collectively held 54.8% of the Senior Secured Credit Participations, being €84,325,000 of the SSNs, out of a total of €153,925,000 Senior Secured Debt, comprising the €86,425,000 SSNs and the €67,500,000 Bridge Facility. v. Accordingly, the Instructing Group cannot have held more than 50% of Senior Secured Credit Participations and therefore cannot have issued a valid instruction to the Security Agent for the purpose of the Purported Enforcement and Distressed Disposal Steps. (b) Alternatively and/or in addition, the Purported Enforcement and Distressed Disposal Steps were invalid and ineffective because the Instructing Group’s instruction to the Security Agent was invalid and ineffective as, in giving the instruction, Redwood did not act bona fide in the interests of the class of Senior Secured Creditors as a whole, but in a manner that was oppressive or otherwise unfair to the minority Senior Secured Creditors. Redwood’s exercise of their powers under the ICA was in bad faith, and for an improper, collateral purpose. 30. The Purported Enforcement and Distressed Disposal Steps resulted in an unjustified and improper transfer of value (i.e. the Hunkemoller Group) to Redwood. This transfer was to the unlawful detriment of the Claimants and the AHG, by way of Redwood, as Purported Instructing Group, enforcing over and appropriating the Shares and transferring certain Liabilities to itself for its sole benefit, without pro rata benefit to other creditors of the Company who, in the case of the Claimants and the AHG, received no value for their Senior Secured Debt. 31. This was achieved by Redwood purporting to exercise powers under the ICA as Majority Senior Secured Creditors in a manner that was in the interests of Redwood only, and not in the interests of the class of Senior Secured Creditors as a whole, and was oppressive and unfair to the minority Senior Secured Creditors, including the Claimants. Redwood’s purported instructions as Majority Senior Secured Creditors were given in bad faith and for an improper, collateral purpose, being the extraction of value only for itself and with the effect of rendering the interests of other creditors valueless. 32. The ability of the Majority Senior Secured Creditors to give an instruction to the Security Agent under the ICA is a power for the Majority Senior Secured Creditors to bind the minority Senior Secured Creditors. The power was at all times subject to the requirement that the majority exercise the power, and give instructions pursuant to the ICA, bona fide in the interests of the Senior Secured Creditor class as a whole and not in a manner that is oppressive or otherwise unfair to a minority (the “Assenagon Term”). The Assenagon Term is to be implied into the ICA either because it is required for business efficacy purposes, and/or because it is necessary to give effect to the reasonable expectation of the parties, and/or because such a term is customarily implied in provisions giving powers to majorities to bind minorities. 33. At the time that Redwood purported to give instructions on behalf of the Senior Secured Creditors for the Security Agent to take the Purported Enforcement and Distressed Disposal Steps, the consequence of the intended enforcement would be that no recoveries would be made by the Senior Secured Creditors, including Redwood (in that capacity). The Purported Enforcement and Distressed Disposal Steps were manifestly not in the interests of the Senior Secured Creditors because they would result in their Senior Secured Credit Participations becoming immediately worthless. 34. In giving instructions to the Security Agent to take the Purported Enforcement and Distressed Disposal Steps, Redwood was not acting in the interests of the Senior Secured Creditors, but in its own interests to acquire the Company at an undervalue.”

“47. The underlying risk of abuse of power by a majority at which this principle is aimed may be combated otherwise than by the direct invocation of the principle itself. It may for example lead the court to a purposively restrictive construction of apparently torrential words in the instrument creating the power… 48. Alternatively, even in provisions conferring wide powers, the parties may include bespoke restrictions designed to avoid its exercise otherwise than for the benefit of the relevant class. It is common ground in the present case that the disenfranchisement of notes beneficially held by or for the account of the issuer or any subsidiary was designed with that objective in mind, because of the likelihood that any such notes would be voted so as to serve the interests of the bank rather than the noteholders. 49. Finally, statute may also intervene. There is in England and Wales the statutory remedy for unfairly prejudicial conduct now to be found in Part 30 of the Companies Act 2006. In the USA, the US Trust Indenture Act of 1939 provides at section 316(b) a general prohibition against the modification of payment terms without the unanimous consent of all the holders of securities issued and registered with the SEC under the US Securities Act of 1933. There are however no statutory safeguards against abuse of power by a majority of the 2017 noteholders in the present context.”

“In all the circumstances, the Purported Enforcement and Distressed Disposal Steps were contrary to and in breach of the terms of the ICA, and are therefore invalid.”

“22. It is averred that the Claimants are contractually prohibited by Section 6.06 of the Indenture from seeking to contest the validity of the Up-Tiering Transaction by way of litigation in New York or England. As to this, it is the Security Agent’s understanding that: (1) On 21 November 2024, the Trustee (i.e., BNY Mellon Corporate Trustee Services Limited as trustee for the SSNs) notified the Claimants that it had received letters dated 5 September 2024 and 19 November 2024 from a majority of the SSN holders which waived the defaults alleged by the Claimants (the “Waiver”) and which instructed the Trustee not to pursue litigation in relation to the Up-Tiering Transaction (the “Counter-Direction”). (2) By virtue of the Counter-Direction, the Claimants are prohibited from seeking to contest the validity of the Up-Tiering Transaction in these proceedings. This follows from Section 6.06 of the Indenture (on its true construction as a matter of New York law). (3) It is noted that substantially the same issue will be determined by the NY State Court in the NY Proceedings. On 17 July 2025, the NY State Court directed that issues relating to Section 6.06 would not be determined on the basis of the Plaintiffs’ allegations (and the issues will therefore be determined by summary judgment or trial of the NY Proceedings in due course).”

“40. The Security Agent appointed Grant Thornton as its Financial Advisor under the ICA. On 21 March 2025, Grant Thornton delivered a Financial Advisor’s Opinion which stated as follows: “● the Enforcement is the optimal method of enforcing the Transaction Security so as to achieve the Security Enforcement Principles and maximise the recovery of any such Enforcement Action; ● the proceeds to be received from the Proposed Transaction are fair from a financial point of view after taking into account all relevant circumstances; and ● the proceeds of the Proposed Transaction to be received represent the best price reasonably obtainable having regard to the prevailing market conditions.” “[…]” 42. Grant Thornton also prepared a detailed valuation report that accompanied the Financial Advisor’s Opinion (the “Valuation Report”). The purpose of the Valuation Report was to identify the value of the assets that were proposed to be transferred to Redwood Bidco, viz. the share capital of Luxco 2 (the “Luxco 2 Shares”) and the relevant secured debt claims (the “Transferred Debt”) as at 21 March 2025 (the “Valuation Date”). Grant Thornton reached the following conclusions: (1) As at the Valuation Date, the value of the Luxco 2 Shares was nil. This is because the value of the Hunkemöller Group was wholly insufficient to repay the debts owing to creditors (amounting to approximately €466 million). (2) As at the Valuation Date, the value of the Transferred Debt was €58.9 million. This figure was calculated as follows: (a) Grant Thornton began by valuing the Hunkemöller Group on a going concern basis as at the Valuation Date. Grant Thornton used a discounted cashflow method, cross-checked via a market approach by reference to guideline public company multiples. On that basis, Grant Thornton concluded that the enterprise value of the Hunkemöller Group as a going concern was between €141.7 million and €155.3 million (with a mid-point of €148.2 million). (b) The enterprise valuation did not, however, reflect (i) the distressed circumstances of the Hunkemöller Group (which required a discount to be applied to the enterprise valuation: see below) or (ii) the Hunkemöller Group’s urgent need to raise €45 million of new money (which would again reduce the attractiveness of the Hunkemöller Group to a prospective purchaser). (c) To account for these factors, Grant Thornton identified the valuation of the Hunkemöller Group in an accelerated M&A process (an “AMA” valuation). The AMA valuation was determined by applying a distressed sale discount of 40% to the going concern enterprise valuation, and by applying various other adjustments. After applying a discount of 40% and the relevant additional adjustments, Grant Thornton determined that the “Adjusted Group EV” was between €82.6 million and €90.7 million, with a mid-point of €86.5 million. (d) Finally, it was necessary to deduct the sums owing under the Interim Facilities (€27.6 million). This is because the Interim Facilities were not subject to the ICA and were incapable of being released or transferred by the Security Agent. In addition, Hunkemöller B.V., a subsidiary of the Second Defendant and the borrower of the Interim Facilities, is an important company with a structurally senior position in the Hunkemöller Group, such that it could not simply be left behind as part of a security enforcement. After deducting the Interim Facilities, the remaining value available for the holders of the Transferred Debt was €58.9 million. (e) Although the value of the Transferred Debt was €58.9 million, Redwood Bidco agreed to pay cash consideration of €86.7 million to acquire the Transferred Debt. In other words, the price paid by Redwood Bidco was materially higher than the real value, representing a premium of about 47%. (f) It was for these reasons, amongst others, that the Security Agent concluded that it was entirely appropriate to execute the Enforcement and Distressed Disposal Steps. 43. It follows that the Claimants are contractually estopped from asserting that the steps taken by the Security Agent did not properly maximise the recoveries for the Senior Secured Notes Creditors.” “● the Enforcement is the optimal method of enforcing the Transaction Security so as to achieve the Security Enforcement Principles and maximise the recovery of any such Enforcement Action; ● the proceeds to be received from the Proposed Transaction are fair from a financial point of view after taking into account all relevant circumstances; and ● the proceeds of the Proposed Transaction to be received represent the best price reasonably obtainable having regard to the prevailing market conditions.” “[…]”

“3. As to paragraph 2, it is denied that the issues in the present claim are “substantially dependent” on the outcome of the NY Proceedings. The Claimants accept that the validity of the Up-Tiering Transaction is a matter of NY law, and is currently the subject of the NY Proceedings. However, the validity of the Up-Tiering Transaction is not something the New York court has exclusive jurisdiction to determine: for the purposes of these proceedings, it is a matter which falls to be determined by the English Court and is one that the English Court would be competent to determine on the basis of the factual and expert evidence adduced by the parties. The allegations in paragraphs 20 and 32(4) that the validity of the Up-Tiering Transaction necessarily “falls to be determined by the NY State Court” are denied for the same reasons. 4. Further, whether Redwood was in breach of the Assenagon Term in giving the instructions it gave as a Senior Secured Noteholder is a matter of construction of the ICA, which is governed by English law. It is not dependent on the outcome of the NY Proceedings. Further, whether (a) the Security Agent was on actual notice or had blind eye knowledge that the instructions of the Instructing Group were invalid and/or ineffective, and (b) the Purported Enforcement and Distressed Debt Disposal Steps were therefore invalid and/or ineffective are matters of English law and not dependent upon the outcome of the NY Proceedings. 5. As to the final sentence of paragraph 19(8) and paragraph 32(3), the Claimants’ case that the Up-Tiering Transaction was in breach of the terms of the Indenture is sufficiently and properly pleaded: the actions of the Company set out in paragraph 22.1 and 22.2 of the Particulars of Claim are the relevant factual matters which resulted in the breaches of the Indenture. These actions constituted breaches of Sections 2.01, 3.02, 4.18, and 9.02 of the Indenture. The relevant issues of New York law will be addressed in expert evidence and other issues of law will be addressed in submissions in due course.”

“20. As to paragraph 45(4): 20.1 the Security Agent’s assertion that the claims of the Senior Secured Claims were entirely “out of the money” is premised on the conclusions on reached in the Valuation Report. For the reasons set out above at paragraph 17 above is denied that the Security Agent was entitled to rely on the Valuation Report or that its conclusions provide any proper basis for any such assertion. The Security Agent is put to proof that the Senior Secured Claims were out of the money and had no value at all, and/or that they could properly be transferred by the Security Agent to Redwood Bidco for nil or nominal consideration.”

“B.5 Case management stays 82. The court has a discretion to order a stay to await the outcome of foreign proceedings in the exercise of its case management powers pursuant to section 49(3) of the Senior Courts Act 1981 and/or CPR r 3.1(2)(f). The principles relevant to the exercise of this discretion can be summarised as follows: (1) The court has a discretion to stay an action pending the resolution of a claim pending in another forum, but a stay should only be granted in “rare and compelling circumstances”: Reichhold Norway ASA v Goldman Sachs International [2000] 1 WLR 173, 186. (2) “Exceptionally strong grounds” are required to justify a stay on case management grounds where the parties have conferred exclusive jurisdiction on the English court: Mazur Media Ltd v Mazur Media GmbH [2004] 1 WLR 2966, paras 69–70 (Lawrence Collins J); Jefferies International Ltd v Landsbanki Islands HF [2009] EWHC 894 (Comm) at [26]. The danger of inconsistent judgments is not a legitimate consideration amounting to exceptional circumstances and does not justify a stay in a case where the court has jurisdiction under Parliament and Council Regulation (EU) No 1215/2012 (“BIR”), especially exclusive jurisdiction: Mazur, para 71. (3) The court's power to stay proceedings cannot be used in a manner which is inconsistent with Council Regulation (EC) No 44/2001 (“the Judgments Regulation”): Mazur, para 69; Jefferies, para 26. A defendant should not be permitted “under the guise of case management, [to] achieve by the back door a result against which the ECJ has locked the front door”: Skype Technologies SA v Joltid Ltd [2011] IL Pr 8, para 22 (Lewison J). (4) A stay will not, at least in general, be appropriate if the other proceedings will not bind the parties to the action stayed or finally resolve all the issues in the case to be stayed, or the parties are not the same: Klöckner Holdings GmbH v Klöckner Beteiligungs GmbH [2005]EWHC 1453 (Comm) at [21] (Gloster J). B.6 The BIR 83. Articles 29 and 30 of the BIR provide as follows: “Article 29 “1. Without prejudice to article 31(2), where proceedings involving the same cause of action and between the same parties are brought in the courts of different member states, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established.” “Article 30 “1. Where related actions are pending in the courts of different member states, any court other than the court first seised may stay its proceedings. “2. Where the action in the court first seised is pending at first instance, any other court may also, on the application of one of the parties, decline jurisdiction if the court first seised has jurisdiction over the actions in question and its law permits the consolidation thereof. “3. For the purposes of this article, actions are deemed to be related where they are so closely connected that it is expedient to hear and determine them together to avoid the risk of irreconcilable judgments resulting from separate proceedings.” 84. Pursuant to article 30, in order for two sets of proceedings to be “related”, they must be capable of being heard and determined together in the same court in the same country: EuroEco Fuels (Poland) Ltd v Szczecin and Swinoujscie Seaports Authority [2019] 4 WLR 156, paras 46–53. 85. Mr Manès has not made any application to have the English Proceedings stayed on the basis that either article 29 or article 30 of the Judgments Regulation is applicable.”

“169. Firstly, MAD International's claims in the English proceedings are brought pursuant to the JVA, which contains an exclusive jurisdiction clause in favour of England. In such circumstances exceptionally strong grounds are required justifying a case management stay. This is for two reasons: (1) Parties should generally be held to their contractual bargain that England is the only jurisdiction to hear the claims: SCB [2016] 1 All ER (Comm) 233; [2016] 2 All ER (Comm) 740 and National Westminster Bank v Utrecht-America Finance Co [2001] 3 All ER 733, endorsed in SCB by Flaux J at paras 129 and 131. Both of those cases concerned non-exclusive jurisdiction clauses in favour of England: the argument against granting a stay is even stronger in the present case, as the JVA contains an exclusive jurisdiction clause, so the contracting parties do not even contemplate any proceedings outside England under the JVA. (2) A case management stay should not be used to undermine the effect of article 25 of the BIR in giving the English court jurisdiction. This argument relates to Mr Manès's contention that he should not face the increased costs and danger of inconsistent judgments which he contends exist because he is facing the same factual allegations in two separate jurisdictions. These are factors that one could rely on to displace an exclusive jurisdiction clause in a forum non conveniens context: such factors cannot be relied upon where (as here) article 25 designates England as having jurisdiction: doing so would amount to using the court's inherent power to stay proceedings on case management grounds inconsistently with the BIR: see Mazur Media [2004] 1 WLR 2966, 2983, paras 69–70, Lawrence Collins J. In any event, Mr Manès makes no application to challenge the English court's jurisdiction pursuant to the relevant articles: he has accepted that he cannot (because of article 25) challenge jurisdiction established by an English choice of court clause on forum non conveniens grounds. I do not consider that the very same grounds would justify a case management stay. 170. Secondly, I consider that the granting of a case management stay in the present case would subvert the operation of articles 29 and 30 of the BIR. Those articles provide for the circumstances in which claims within the EU must be stayed (because they are the same cause of action with the same parties), or may be stayed (because they are related actions). Mr Manès has not made any applications under those articles to stay proceedings no doubt because the requirements of article 29 are not satisfied (the parties are not the same); and those of article 30 are not satisfied (because the claims under the JVA cannot be heard and consolidated with proceedings in France due to the exclusive English jurisdiction clause). 171. Thirdly, neither Mr Manès nor MAD International will be bound, in the English Proceedings, by the conclusions in the French Civil Proceedings as a matter of issue estoppel: the French Civil Proceedings will not finally resolve the issues between the parties to the English Proceedings for the reasons set out above and the claims in the English proceedings are significantly broader than the claims brought in the French Civil Proceedings. Both of these are powerful reasons militating against the grant of a case management stay: see Gloster J in Klöckner Holdings GmbH v Klöckner Beteiligungs GmbH [2005] EWHC 1453(Comm) at [21(iv)] and [21(v)].”

“75. It seems to me that the Secretariat's submission that the appellants’, or at any rate Mr Mincione's, real dispute was with the OPJ was a distraction. Clearly there is a dispute between the OPJ and Mr Mincione as to whether he engaged in criminal conduct, including in relation to the Transaction. That dispute is the subject of the criminal proceedings in the Vatican City Court. However, the existence of that dispute does not preclude the existence of a dispute between the appellants and the Secretariat as to whether the appellants are under any civil liability to the Secretariat, for example to pay compensation, as a result of entering into the Transaction. 76. In those circumstances, it seems to me that far from there being a compelling reason to stay the present claim, there is every reason why it should be permitted to proceed. It is a claim which the judge found to be justiciable, over which the English court has exclusive jurisdiction in accordance with the Judgments Regulation. He said that, if it is to be tried at all, it should be tried in England, but the effective result of the stay which he imposed is that it will not be tried in England but in the Vatican. The judge found also that to allow the proceedings here to continue will not interfere with the criminal proceedings in the Vatican (so that one concern which might have led to the grant of a stay did not arise) and that the appellants have a valid reason for wishing the proceedings here to continue, namely to vindicate their position (if they can) in the parties’ chosen forum in order to mitigate the regulatory and reputational pressures resulting from the allegations which have been made. 77. It must be recognised that, as matters stand, the result of allowing the case to proceed here will be that there are parallel proceedings concerning the same subject matter (i e the appellants’ liability to compensate the Secretariat as a result of the Transaction) both here and in the Vatican. In my judgment, however, that is not a reason to refuse to allow the case to proceed in the parties’ chosen forum, namely the English court.”

“59. That decision was affirmed on appeal but with the caveat that since a claimant with a bona fide claim not tainted with abuse, oppression or any vexatious quality, is entitled to sue in England any defendant over whom the court has jurisdiction, that entitlement should not be subject to any restriction greater than the interests of justice can properly justify, so that in the ordinary course stays would only be granted in "rare and compelling circumstances" ( per Lord Bingham CJ at [2000] 1 WLR 173 at 183H and186B-C).”

“177. The claimant chose to start an arbitration under UNCITRAL Rules and having started the arbitration that is a factor in allowing that process to run its course prior to the determination by the English courts. This is reinforced by this court's finding that, at least in part, the challenges before the curial court have a realistic prospect of success and are not bound to fail. 178. As Henshaw J concluded at paras 213–214 in Hulley [2021] 1 WLR 3429, one of the advantages of a stay (and in his view one of the key advantages which led to his decision) was: “where a challenge in the curial court has a realistic prospect of success, of allowing that process to run its course, in the interests of comity, avoidance of inconsistent decisions and efficiency.”

“212. As I indicated in the course of the hearing, I was very concerned about the length of the potential delay in this case if the Stay Application was granted and the prejudice to the claimant which, as discussed above, will result from that delay. 213. Having considered (above) the individual factors for and against a stay and in particular in this case the risk of conflicting judgments (taking into account the merits of the challenge in the Annulment Proceedings), I find that the balance lies in granting a stay but that the potential prejudice to the claimant can be mitigated by ordering a stay only until the determination of the Annulment Proceedings by The Hague Court of Appeal and not until the final determination of the Annulment Proceedings. 214. I recognise that there is a risk that one of the parties may seek to extend the stay beyond the decision of The Hague Court of Appeal but I am also of the view that the decision of The Hague Court of Appeal, especially if it confirms the decision of the tribunal, may resolve matters or at least may narrow the issues and the risk of inconsistent judgments will be reduced (though not eliminated). 215. Further by limiting the stay in this way the English courts will retain a measure of control over the progression by the parties of the proceedings in the Netherlands as, if a further stay is sought, the parties will be obliged to satisfy the court that the matter is being progressed with appropriate expedition and the court will also be able to reassess whether a stay is appropriate, weighing the relevant factors at that time which will include the merits of the issues in light of the decision of The Hague Court of Appeal. 216. I will also give liberty to the claimant to apply so that if the Dutch proceedings are not pursued with due expedition the Stay Application can be brought back before the court.”

“43. What I take from the authorities in this area is the following: (1) That, putting aside for the moment the issue of the statutory effect of the 1999 Act, which is an argument considered later, the answer to the question of whether a jurisdiction clause covers claims by or against a non-party depends only on an exercise of contractual construction and implication. It does not depend on “some more general legal doctrine or policy … which prioritises maximising the efficacy of the forum selection agreement” over such an exercise: Karonis, paras 93–97. (2) That in the absence of express words as to the jurisdiction clause extending to claims by and against third parties, the starting point in interpreting a jurisdiction clause is that only the parties to the contract are covered: Clearlake, para 24. What may be called the Fiona Trust presumption—that rational businessmen are likely to have intended that all disputes arising out of their relationship should be decided in the same court—cannot apply with the same force when the question is whether they intended to constrain claims by or against a non-contracting third party: Team Y&R, para 82(2). (3) The issue is nevertheless one of construction, which is to be conducted on a conventional basis. There will be cases in which the terms of the contract as a whole, taken with the nature of the relations between the parties and the non-parties, dictate an interpretation of the exclusive jurisdiction clause whereby, even though it does not deal expressly with claims by and against non-parties, nevertheless it covers such claims: Global Partners Fund, Millen.” “45. Despite the force of these points, I have reached the conclusion that Mr Campeau’s construction of clause 18.2 is to be preferred. (1) The wording of clause 18.2 is very wide (“any dispute which may arise out of or in connection with this deed (including any dispute relating to any non-contractual obligations …”)). This language is wide enough to embrace claims by and against third parties. A dispute arising between a party and one of those non-parties identified in clause 10.3 as to the effect of that clause can readily be said to be a “dispute” which “[arises] out of or in connection with” the SPA. (2) Mr Campeau’s interpretation accords with the commercial sense of the provision, in context. A clear purpose of clause 10.3 of the SPA is to provide Geco, and the directors, officers etc brought within its group, comfort that GEHCL will not be devalued by claims made against GEHCL, its subsidiaries and officers by OE Waste. Otherwise, Geco might pay OE Waste for the asset, only for its value to be diminished by subsequent claims brought by OE Waste. One context in which this might be important, it would reasonably have been understood, was if there were warranty claims. Geco might wish to be able to claim under the warranties in the SPA without there being contribution claims made by OE Waste against GEHCL, its subsidiaries or officers. This is a situation which arose, for example, in Macquarie Internationale Investments Ltd v Glencore (UK) Ltd [2008] 2 BCLC 565. The parties would not have been reasonably understood to wish, or to be agreeing, that warranty claims and any resulting contribution claims and defences under clause 10.3 should be resolved in different courts. (3) If clause 18.2 is not given the meaning contended for on behalf of Mr Campeau, it leads to another anomaly. Geco would itself be entitled to seek to enforce OE Waste’s undertaking in clause 10.3 not to sue, inter alios, Mr Campeau. Such a claim would clearly be subject to clause 18.2 and be subject to the exclusive jurisdiction of the English court. The parties would not have intended, or be reasonably understood to be agreeing with each other, that the same issue could be litigated in a different court if Mr Campeau were to seek to rely on clause 10.3 himself. (4) The case is similar to that in Global Partners Fund . The context here, as there, is that the SPA itself confers rights on identified non-parties, including by way of exculpatory provisions. The present case is if anything a fortiori Global Partners Fund , in that in the present case the SPA does provide for certain rights to be available to third parties under the 1999 Act. 46. I should add the following point. As discussed below, I have reached the conclusion that the effect of the 1999 Act was to oblige Mr Campeau to enforce rights under the SPA given to him by the 1999 Act subject to the exclusive jurisdiction provision in clause 18.2. If this is right, then the parties should be taken to have contemplated that the rights conferred on third parties under clause 10.3 would necessarily be subject to the jurisdiction provision. This, to my mind, bolsters a construction of clause 18.2 as applying to disputes arising in relation to such third party rights. On this basis the parties would have contemplated that the third party would necessarily be constrained by the jurisdiction provision, and interpreting clause 18.2 as an agreement, between the parties, that such disputes would be subject to the exclusive jurisdiction of the English courts would cohere with this.”

“8. Clearstream, like Euroclear based in Belgium, operates an electronic trading system for interests in securities. It is established in Luxembourg and operates under Luxembourg law. 9. Typically, as in this case, the securities are represented by a bearer note that is physically held on a permanent basis by a custodian. In this way, the note is said to be "immobilised". It is not the bearer note, but interests in the note, that are traded through the Clearstream system. This is achieved through a descending succession of interests. The custodian holds the note for the Clearstream system. Clearstream maintains accounts for members (banks and others) which hold and deal in interests in securities as Account Holders. Each Account Holder's interests in securities at any time are recorded by Clearstream. The interests are fungible and are traded between Account Holders through electronic book entries. Account Holders may hold interests for themselves as principal or to the order of their customers (Account Owners). 10. The system operates on the basis of a "no look through" principle, whereby each party has rights only against their own counterparty. Payments of sums due on the securities are made by the issuer or other payer to Clearstream which then makes payment to the Account Holders in respect of their recorded interests. The Account Holders pass on the appropriate sums to their Account Owners. 11. Typically, as in the present case, Account Holders will become entitled to a direct interest in notes only if there has been default in the payment of principal due on the notes or if Clearstream were closed permanently or for a continuous period of 14 days.”

“47. The only party entitled to sue is the holder of the Notes represented by the PGS, ie BNYM, unless one of a limited number of specified events has occurred. The obligations of Credit Suisse are owed to the bearer for the time being of the PGS. The Programme Memorandum provides that the holder would "be deemed to be and may be treated as its absolute owner for all purposes" (emphasis added). The persons shown in the records of Clearstream (ie the Account Holders, not Account Owners) must look solely to Clearstream "for his share of each payment made by the Bank and in relation to all other rights arising under the Global Securities" (emphasis added). This is, as Secure Capital accepts, the no look through provision which is fundamental to the workings of the settlement systems in interests in immobilised securities. Secure Capital's submission that it is limited in its effect to payment obligations is incompatible with the emphasised words. This provision is concerned with the rights of an Account Holder, which in the present case was RBSL. It would be eccentric to suggest that Account Holders, who may hold interests on their own account, must look only to Clearstream or other settlement system but Account Owners, who are even more removed from the underlying Notes, are not so constrained.” “55. I have struggled, unsuccessfully, to understand the principle that could justify this approach. In the case of immobilised securities, Clearstream and other settlement systems exist to facilitate efficient trading in interests in securities, not in the securities themselves. The fact that security issues are organised in this way so as to facilitate such trading is nothing to the point. Participants in the market know that they are trading in interests, not in the underlying securities. They are interests in contractual arrangements constituted by the Notes and ancillary documents. The documents expressly provide for English law to be the proper law and expressly identify the parties who may either generally or in limited circumstances sue for breach of the terms of the Notes. Those provisions are as much part of the package of rights as the payment terms and any other terms of the Notes. Market participants trade in interests in that total package of rights.”

“60. Though payment to counterparties and onwards down the chain may be the consequence, it seems to me that the question raised by this case is subtly different from whether contractual rights exist and can be enforced by the Claimants. As is common ground, the Claimants have no contractual rights. The question is whether, in circumstances in which a disagreement has arisen about rights under the Notes, which uncertainty affects the Claimants' interests, the Claimants are precluded from seeking a determination of those issues because of their lack of contractual rights – notwithstanding (if it is the case) that the declarations would otherwise serve a useful purpose and be the most effective and just way of resolving the issues. I do not accept that the disagreement has gone away just because the Custodians have not themselves taken further steps to establish their rights. It plainly has not, in view of the Claimants' claims. 61. Given that there is no contract precluding the Claimants from doing so, I find it hard to see why a genuine dispute about rights under the Notes should not be determined at the instance of the Claimants, if (but only if) they have a sufficient and legitimate interest and other considerations (to which I will turn) are satisfied. The fact that the consequence of that may be repayment of those Claimants who have already served acceleration notices does not mean that the Claimants are seeking illegitimately to enforce payment from the Defendants. Rather, as Mr Smith submitted, they are seeking to give effect to the structure, by establishing that rights to accelerate exist, which has various predetermined consequences.” “78. The position of the clearing systems is different. It can safely be assumed that they have no interest other than to comply with instructions that are given to them, in accordance with the terms of the Notes and the terms agreed with the account holders. No useful purpose would be served by joining the clearing systems. 79. A further point is that non-parties to the claim will not be bound by the outcome, whether or not declarations are made. That means that if the Defendants were to succeed, the Custodians, if instructed by other account owners to do so, or in their own interest as investors, could seek to establish the contrary in different proceedings. The chances of that occurring are, perhaps, limited if the court is satisfied that all relevant arguments will be presented at the trial, but the possibility remains that more litigation will follow. However, that would be so even if some of the Custodians had brought this claim. 80. The possibility of further disputes would probably be reduced if the Claimants' Custodians were joined. While the declarations sought can be said still to serve a useful purpose, in that the court will give what Millett LJ termed "something approaching an advisory declaration", the benefit would probably be increased by joinder of the Custodians, as claimants if willing or as defendants if unwilling. This is sometimes done to give an equitable assignee title to sue, or where a trustee in breach of duty has failed to bring a claim ( Vanderpitte v Preferred Accident Insurance Corp of New York [1933] AC 70). The same course can be taken if joinder is necessary to make declarations serve a useful purpose. 81. The effect would be to make it more likely, in the real world, that the declarations would have effect. That is the most effective way of disposing of the disputed issues, to use the language of Lewison LJ in JP Morgan . To proceed without the Custodians is arguably a less effective way, though if in fact the Custodians have nothing to add and no position to take, not joining them would be justified on the ground of saving unnecessary costs. 82. While I can acknowledge the possibility of a judge at trial deciding not to make declarations, in the exercise of their discretion, in the absence of the Custodians or without clarity as to their position, I am unable to conclude that that is bound to happen, so that the Claimants have no real prospect of success. The evaluation of the ultimate question of whether the declarations would serve a useful purpose may be affected by further evidence or documents disclosed, even in a Part 8 claim. The evidence is not yet closed. 83. I will therefore dismiss the application to set aside the Order of Miles J because there is a serious issue to be tried.”

“A foreign judgment can give rise to issue estoppel: Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853, 918B, 927G, 967B (Lords Reid, Hodson and Wilberforce). The conditions which must be satisfied in such a case are: (1) the judgment relied on as creating the estoppel must be (a) by a court of competent jurisdiction ; (b) final and conclusive; and (c) on the merits; (2) the parties (or their privies) must be the same in both sets of proceedings; (3) there must be a clear determination of the issue by the judgment—it must not be merely collateral or obiter comment; (4) the issue in the later action must be the same as the issue decided by the judgment in the earlier proceedings : see DSV Silo und Verwaltungsgesell -schaft mbH v Owners of The Sennar (The Sennar) (No 2) [1985] 1 WLR490, 499.”

“60. At the outset, the Defendants acknowledge that the Up-Tiering Case relates to a transaction (i.e. the Up-Tiering Transaction) which took place in July 2024, whereas the Assenagon Case relates to a separate transaction (i.e. the Distressed Disposal) in March 2025. However, it simply does not follow that the Up-Tiering Transaction is irrelevant to the Distressed Disposal. 61. To see why, it is critical to understand the nature of the allegations made by the Claimants in relation to the Assenagon Case: (1) The Claimants’ core allegation is that Redwood committed an abuse of majority power by instructing the Security Agent to transfer the Super Senior Liabilities and the Senior Secured Liabilities to Redwood Bidco for €87.6 million. (2) Under the ICA, the Super Senior Creditors were entitled to receive the entire consideration of €87.6 million. However, Redwood elected to allocate a sum of €1.7 million to the Senior Secured Creditors (despite the fact that they were hopelessly “out of the money”). (3) Of the €1.7 million allocated to the Senior Secured Creditors, a rateable proportion €1.357 million was allocated to the SSNs (and the balance was allocated to the Bridge Facility). The sum of €1.357 million allocated to the SSNs is described as the “Notes Agreed Amount”. (4) The Claimants assert that the Notes Agreed Amount is “de minimis” and did not represent adequate consideration for the transfer of the SSNs to Redwood Bidco. In contrast, the Defendants maintain that the Notes Agreed Amount materially exceeded the economic value of the SSNs. This is because the secured debt under the ICA had a market value of only €58.9 million (according to GT), and a far greater amount of debt ranked ahead of the SSNs under the ICA. 62. Pausing there, it will be apparent that one of the central pleaded issues on the Assenagon Case is whether the Notes Agreed Amount materially exceeded the economic value of the SSNs. If the answer to that question is “yes”, then the Court might well conclude that the Notes Agreed Amount was a fair form of consideration for the transfer of the SSNs (and, by the same token, that Redwood did not act abusively by instructing the Security Agent to transfer the SSNs on those terms). On the other hand, if the Court concludes that the economic value of the SSNs exceeded the Notes Agreed Amount, then the Claimants will doubtless argue that Redwood committed an abuse of majority power. 63. The centrality of this point is apparent from the parties’ pleadings. The Defendants plead that the SSNs “were entirely “out of the money” and had no value at all”

“The Security Agent’s assertion that the [SSNs] were entirely “out of the money” is premised on the conclusions on [sic] reached in the Valuation Report … [it] is denied that the Security Agent was entitled to rely on the Valuation Report or that its conclusions provide any proper basis for any such assertion. The Security Agent is put to proof that the Senior Secured Claims were out of the money and had no value at all, and/or that they could properly be transferred by the Security Agent to Redwood Bidco for nil or nominal consideration.” 64. As a result, the parties have agreed that expert evidence of valuation will be required to determine the Assenagon Case. 65. If the Court accepts that the secured debt under the ICA had a market value of only €58.9 million (as stated by GT), i.e. below the value of the Super Senior Liabilities, then the Up-Tiering Transaction will be largely irrelevant (although it would still be relevant to deciding whether the Claimants should receive a share of the Notes Agreed Amount). 66. However (and without prejudice to the Defendants’ case that GT’s valuation is “conclusive evidence” under the terms of the ICA ), there can be no guarantee that the Court will accept GT’s valuation. This will be a matter for trial. If the Court concludes that a higher valuation is appropriate, then the validity of the Up-Tiering Transaction could be critical to assessing whether the SSNs held by the Claimants had any economic value – which, in turn, could be critical to understanding whether Redwood committed an abuse of majority power. 67. In this regard, it is helpful to consider the expert evidence of valuation filed by the Claimants in the NY Proceedings: (1) The Claimants have relied on several valuations to quantify the damages resulting from the alleged breaches of the Indenture. One such valuation (produced by Ms Austin, one of the Claimants’ expert witnesses) calculates that the Company’s enterprise value was REDACTED as at March 2025 based on certain assumptions. To be clear, this is a fallback valuation – the Claimants have put forward other (higher) valuations in New York. But it is one of the valuations upon which the Claimants rely. (2) As Ms Austin explains, an enterprise valuation of REDACTED would mean that the SSNs held by the Claimants would be worth REDACTED if the Up-Tiering Transaction had not occurred. By contrast, if the Up-Tiering Transaction is valid, then the Claimants’ SSNs were worthless, since they ranked behind some REDACTED of debt comprising the Super Senior Liabilities (with a total face value of REDACTED), the 2024 Global Note (with a face value of REDACTED), and a rateable part of the Bridge Facility with a face value of approximately REDACTED (which would have been satisfied pari passu with the SSNs under the ICA waterfall). (3) The value of the Claimants’ SSNs is therefore highly sensitive to whether the Up-Tiering Transaction is valid. This sensitivity arises on any enterprise valuation between REDACTED (the face value of the Super Senior Liabilities) and REDACTED (the face value of the Super Senior Liabilities and all Senior Secured Liabilities), and the sensitivity is particularly acute for any enterprise valuation between REDACTED and REDACTED (since the validity of the Up-Tiering Transaction would then determine whether the Claimants’ SSNs had any value at all). 68. In light of the foregoing, it will be apparent that there is a fundamental problem with the suggestion to hive off the Assenagon Case from the Up-Tiering Case. The problem, in summary, is that: (i) a central pleaded issue on the Assenagon Case is whether the Claimants’ SSNs had any economic value; (ii) the answer to that question is directly linked to the validity of the Up-Tiering Transaction, particularly for an enterprise valuation between REDACTED (see above); and (iii) although the Defendants contend that the enterprise valuation is below that range, it is impossible to know whether the Court will accept that contention at trial (since GT’s valuation is strongly disputed by the Claimants). It may therefore be impossible for the Court to determine the Assenagon Case without also determining whether the Up-Tiering Transaction is valid.” “The Security Agent’s assertion that the [SSNs] were entirely “out of the money” is premised on the conclusions on [sic] reached in the Valuation Report … [it] is denied that the Security Agent was entitled to rely on the Valuation Report or that its conclusions provide any proper basis for any such assertion. The Security Agent is put to proof that the Senior Secured Claims were out of the money and had no value at all, and/or that they could properly be transferred by the Security Agent to Redwood Bidco for nil or nominal consideration.”

“MR JUSTICE LEECH: I mean, I just wonder if you need to go actually that far. I mean, leaving aside the actual textual construction, I mean, what you have in your favour is that the parties to the intercreditor deed chose this jurisdiction to regulate their affairs. This is all about the regulation of the legal rights of the intercreditors −− of the individual creditors with each other under the ICA. Where else would you come to, to get a decision on what they are or are not allowedto do? LORD WOLFSON: That's my third argument, my Lord. That's really, if I may say, respectfully, another way of putting my third argument.”

“Now, I don't want to get −− This is a CMC. I don't want to get into a sort of "he said, she said" type set of submissions, but the short point is this: we started proceedings in New York. True. While those proceedings were going on in New York, they started the enforcement action. That's what's led to the proceedings in England. So the idea that they were going to −− and I won't use the more colourful terms in the pleadings, but I think "aggressive" is quite a fair term, or certainly controversial, enforcement steps would not be met by a claim in this jurisdiction under the ICA −− which, as my Lord was exchanging with my learned friend , that is the contract which gives rise to the Assénagon claim −− of course it was going to give rise to that claim. That's why the English proceedings were started. So, again, the other way of looking at it is we started in New York. They then started the enforcement proceedings. We reacted to that, and they now want to stay everything in England. I mean, that's the other way of looking at it . So, I mean, you end up with a "he said, she said", and I'm not sure it really takes us any further.”

“a) A stay of the Proceedings would delay the granting of the relief being sought by the Claimants, namely declarations as to the invalidity of the Purported Enforcement and Distressed Disposal Steps and the restoration of their SSNs (PoC, relief (1)(b)-(c)). It is inevitable that the longer the resolution of the claims is delayed, the more complicated it will likely be to effect the relief sought by the Claimants. b) Further: i) Until final resolution of the Proceedings and the clarity on the status of the SSNs that will be brought by such resolution, the Claimants do not know whether they hold valid SSNs or the value of those SSNs. This means that their valuation and risk-management processes across their portfolios must be less effective and is impaired. This uncertainty extends beyond the Claimants themselves: fiduciary duties are owed to the funds managed, and through them, to the underlying investors. ii) A delay in determination of the Proceedings may be even more prejudicial for the Claimants where they or a relevant fund reaches its end of life whilst the Proceedings are pending (and that risk becomes more likely to occur if the resolution of the Proceedings is delayed). If a Claimant or a relevant fund reaches the end of its life before the Proceedings are resolved, the administration of that fund is liable to be materially affected: the fund may be required to extend its life, to establish a continuation vehicle, or to adopt some other form of resolution. Any such step gives rise to a real risk that any benefit subsequently obtained by way of the Proceedings could not properly be returned to the investors who suffered the impact of the invalid events and steps that are the subject of the Proceedings This is a live risk for: Cheyne European Strategic Value Credit RAIF, with fund Cheyne European Strategic Value Credit Fund II, which has end of life due for 30 June 2027. c) In addition, any stay would carry the usual prejudicial consequences of delay, including the risk of lost or deteriorated documentary evidence and faded witness recollection.”