Key point

An English scheme for a company that has a "sufficiently close connection" with the jurisdiction can be proposed albeit recognition in Poland is at the discretion of the Polish courts.

The Facts

Zlomrex International Finance SA (the "Company") a French registered company, within a group of Polish companies, moved its principal place of business to London. It took phone lines, acquired English premises, English directors and opened a bank account in England.  The Company was not able to repay certain loan notes (subject to New York Law) on their due date. The alternative to a scheme of arrangement was some form of insolvency process. The application invited the court to convene a meeting of one class of creditors of the Company.

Decision

The Court was satisfied that the Company had a sufficiently close connection with England and that the scheme was not a futile exercise because it could be recognised in both Poland and New York if necessary.

Comments

The Polish courts will give effect to schemes of arrangement as foreign judgments even though the Polish courts still maintain an element of discretion in this regard. Relief could also be granted in New York enabling a proposed scheme to be enforced in the US via Chapter 15 of the US Bankruptcy Code.

Zlomrex International Finance S.A., Re