THE HIGH COURT  
COMMERCIAL  
[2020] IEHC 523 
 [ 2019 No. 6256 P ] 
BETWEEN  
APPERLEY INVESTMENTS LIMITED, TAILWIND INVESTMENTS 
LIMITED AND MARTINA INVESTMENTS LIMITED  
 
PLAINTIFFS  
AND  
MONSOON ACCESSORIZE LIMITED  
 
DEFENDANT  
AND  
THE HIGH COURT  
COMMERCIAL  
 [ 2019 No. 5745 P]  
BETWEEN  
R.E.S. A.M. CORK U.C. AND R.E.S.A.M. PROPERTIES LIMITED  
 
PLAINTIFFS  
AND  
MONSOON ACCESSORIZE LIMITED AND MONSOON ACCESSORIZE 
IRELAND LIMITED  
 
DEFENDANTS  
 
JUDGMENT of M r. Justice Denis McDonald  delivered on 20th October , 2020 
Introduction  ................................ ................................ ................................ ....................  3 
Relevant facts  ................................ ................................ ................................ .................  7 
The effect of the CV A on the leases  ................................ ................................ ..............  9 

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The objections of the Cork and Dublin landlords  ................................ ........................  11 
The approval of the CVA at the creditors’ meeting  ................................ .....................  15 
The legal effect under the UK Insolvency Act of the approval of the CVA  ...............  16 
The commencement of proceedi ngs in Ireland by the Cork and Dublin landlords  ..... 19 
The Recast Insolvency Regulation  ................................ ................................ ...............  20 
Article 7  ................................ ................................ ................................ .......................  23 
Article 11  ................................ ................................ ................................ .....................  24 
The interaction between Article 7 and Article 11  ................................ ........................  27 
The arguments as to the meaning and effect of Article 11  ................................ ..........  29 
The obligation on the court to recognise and give effect to the CVA  .........................  36 
Article 19  ................................ ................................ ................................ .....................  36 
Article 20  ................................ ................................ ................................ .....................  37 
Article 32  ................................ ................................ ................................ .....................  38 
Discussion and analysis of the issues which arise in respect of Article 32  .................  39 
The effect of the obligation imposed by Article 32 to recognise the CVA  .................  52 
The public policy exception under Article 33  ................................ ..............................  57 
The case made by  the Irish landlords under Article 33  ................................ ...............  64 
The procedural fairness issue  ................................ ................................ .......................  65 
The failure to give the Irish landlords an opportunity to be heard before the votes of 
creditors were cast  ................................ ................................ ................................ ........  77 
The suggestion that the availability of a court challenge cured any want of fair 
procedures  ................................ ................................ ................................ ....................  79 
Conclusion in relation to public policy  ................................ ................................ ........  84 
Estoppel  ................................ ................................ ................................ ........................  85 
The guarantee claim against MAIL  ................................ ................................ .............  87 
The relief to be granted  ................................ ................................ ................................  92 
 
 
 
 
 
 
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Introduction  
1. In circumstances w here the principal issues which arise for consideration in 
both of the above proceedings are identical, both sets of proceedings were directed to 
be tried together.  The trial took place before me, by way of a remote hearing, on 19th 
and 20th May, 2020.  A lthough both proceedings were commenced by plenary 
summons, the hearing, save to a very limited extent took place on the basis of 
affidavit evidence.  There is substantial agreement between the parties as to the 
underlying facts.  The only significant fact ual dispute which arose between the parties 
was in relation to certain aspects of English law.  In circumstances where the parties 
sought to rely on English law to some extent in support of their respective positions, 
English law (like any other foreign la w) fal ls to be proved as a matter of fact.   
2. The relevant details concerning the parties are as follows :- 
(a) Apperley Investments Ltd and its co -plaintiffs in the first set of 
proceedings are the landlords of premises occupied by the defendant at 
74 Grafton S treet, Dublin 2  (“the Dublin premises”)  under the terms of a 
lease dated 10th February, 2005 made initially between Michael Enoch, 
Lorraine Enoch and Martina Investments Ltd trading as The Town 
Partnership as landlord and the defendant as tenant ( “the Dublin lease”).  
The Dublin lease is for a term of 25 years from 20th August, 200 4.  The 
reserved basic rent was initial ly €750,000 which was subject  to review 
on 1st March 2009, 1st March 2014 and 1st March 2019.  The rent has 
since been reviewed and now stands at €825,000 per annum  as from 1st 
March 2014.  Apperley Investments Ltd an d its co -plaintiffs ( “the 
Dublin Landlords”)  now hold the lessor’s interest in the Dublin lease.   
(b) The defendant, Monsoon Accessorize Ltd (“Monsoon”) is a company 
organised and existing under the laws of England & Wales. In the course 
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of 2019, it underwent  a company voluntary arrangement ( “CVA”) in 
England under the terms of the Insolvency Act, 1986 (UK)  (“the UK 
Insolvency Act” ) which took effect on 3rd July, 2019.  By its terms, the 
CVA purported to modify certain provisions of the Dublin lease (and the 
Cork lease as described below) and in particular it purported to effect 
very significant reductions in the  amount of rent payable by Monsoon  
under the Dublin lease.   
(c) R.E.S.A.M. Cork U.C. and its co-plaintiff in the second set of 
proceedings ( “the Cork landlords”) are the landlords of the premises  
situated at  35, 36 and 37 Patrick’s Street, Cork ( “the Cork premises”)  
which are the subject of two leases .  The first named plaintiff in these 
proceedings is the owner of that part of the freehold of  those premises 
which are the subject of a lease dated 26th May, 1977 ( “the 1977 lease”) 
between Cordelia Investments, as landlord, and Associated Restaurants 
(Ireland) Ltd, as tenant.  The 1977 lease was for a term of 33 years from 
1st February,  1977 subj ect to the initial yearly rent of IR£15,000.  The 
tenant’s interest under the 1977 lease wa s subsequently transferred to the 
second named defendant in the proceedings (“ MAIL”)  which is an Irish 
company with a registered office at the address of the Dublin premises 
above.  In turn, t he tenant’s interest was assigned by MAIL to Monsoon  
which is the same entity as the defendant named in the Dublin 
proceedings.   
(d) The second named plaintiff is the owner of the freehold in the remaining 
interest in  35, 36 and 37 Patrick’s Street, Cork which is  the subject of a 
lease dated 26th January, 2005 made between the second named plaintiff 
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as landlord and MAIL as tenant ( “the 2005 Lease”).   Under the 2005 
Lease, Monsoon was named as guarantor.  However, on 21st June, 2013, 
the tenant’s interest under the 2005 Lease was assigned to Monsoon.  As 
part of that arrangement, MAIL guaranteed the due performance of the 
2005 Lease by M onsoon.   
(e) The total annual rent payable under both the 1977 and the 2005 leases is 
€735,000.   
(f) Although MAIL is no longer a tenant of the Cork premises, it is pursued 
by the plaintiff pursuant to the guarantees given by it in 2013 in respect 
of Monsoon’s o bligations as tenant under both the 1977 Lease and the 
2005 Lease.  In due course, it will be necessary to examine the terms of 
the guarantees in more detail.  It should be noted that both guarantees are 
governed by Irish law.  It should also be noted that  MAIL was not a 
party to the CVA involving Monsoon.   
3. Subsequent to the hearing in May 2020, I was informed in June 2020 that 
Monsoon had been placed in administration in the United Kingdom and that MAIL 
had been placed in liquidation in Ireland.  Notwiths tanding  these events, I was 
nonetheless requested to complete my judgment on the basis that the issues raised in 
the proceedings were  said to be  important and  it was also suggested that , in any event, 
my judgment on the issues would assist in the quantific ation of the claims to be made 
by the Cork and Dublin landlords in the administration of Monsoon  and in the 
liquidation of MAIL respectively.  In addition, it was submitted that a judgment 
remained necessary  in order to address the liability for the costs of these proceedings.  
Thus, although there was no longer any urgent need to deliver judgment, I agreed to 
prepare a judgment addressing the issues which were debated before me in May 2020.   
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4. The main claim made both in the Dublin proceedings and in the Co rk 
proceedings is a declaration that the terms of the leases continue in full force and 
effect and are unaffected by any modification  arising  under the  terms of the  CVA.  In 
the alternative, a declaration is sought pursuant to Article 33 of Regulation (EU)  
2015/848 of 20th May, 2015 on Insolvency Proceedings (Recast) ( which I will refer to 
either as “the Recast Insolvency Regulation”  or “the Regulation” ) that the CVA, 
insofar as it purports to effect any variations of or modifications to the terms of the 
leases, is not entitled to be recognised or enforced in the State on the grounds that its 
enforcement would be manifestly contrary to the State’s public policy.   
5. Specific performance is also sought of the leases (in their unmodified terms) 
as against Monsoo n.  In addition, insofar as the Cork  proceedings are concerned, a 
declaration is sought that the obligations of MAIL , as a surety,  in respect of the 1977 
and 2005 Leases are not released, determined, discharged or in any way lessened by 
any purported varia tion of those leases pursuant to the CVA.  
6. In response, Monsoon has defended the proceedings on the basis that, 
pursuant to Articles 19, 20 and/or 32 of the Recast Insolvency Regulation, the court is 
required to recognise and enforce in full the terms of th e CVA.  In addition, objection 
is taken on the basis that none of the plaintiffs sought to challenge the terms of the 
CVA before the courts of England & Wales whether pursuant to s. 6 (1) of the UK 
Insolvency Act or otherwise and that the initiation or pro secution of these proceedings 
by the plaintiffs is prohibited by the doctrine of res judicata , the doctrine of issue 
estoppel and/or the rule in Henderson v. Henderson  (1843) 3 Hare 100.  
7. In reply , the plaintiffs have alleged that Monsoon and MAIL are estop ped 
from objecting to the institution and prosecution of t hese proceedings in Ireland by 
reason of the contents of a letter sent by its Birmingham Solicitors, Messrs. 
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Shoosmiths , on 2nd July, 2019.  That letter was sent in response to letters sent by the 
solicitors acting for the respective Cork and Dublin plaintiffs on 30th June, 2019 and 
1st July, 2019 in which issues were raised in respect of the operation of Article 11 of 
the Recast Insolvency Regulation.  In response, Messrs. Shoosmiths stated that, if the 
position taken in the correspondence from the plaintiff’s solicitors is correct with 
regard to Article 11, then the proposed CVA “is of no effect in relation to the Lease.”  
The co rrespondence in question is addressed in more detail below.   
Relevant facts  
8. Before addressing the legal issues in any more detail, it is necessary to 
summarise the relevant facts.  Although the parties are in dispute as to the effect of the 
guarantees giv en by MAIL (and as to the effect of the CVA, if any, on the 
guarantees), there is no dispute between the parties as to the existence of the leases or 
as to their terms and the legal effect of their obligations absent the CVA.  If one 
ignores any potential effect of the CVA, the combined rent due in respect of the Cork 
premises amounts , as noted above,  to €735,000 per annum .  Assuming the leases 
continued to the date of their scheduled expiry, there would be a total sum of more 
than €3.5 million due.   
9. As fu rther noted above, i n the case of the Dublin premises, the current rent is 
€825,000 per annum .  If that lease were to continue until its scheduled expiry, the 
amount of rent falling due would exceed €8 million.   
10. On 20th June, 2019, the directors of Monsoo n issued proposals for a CVA 
under the UK Insolvency Act.  The CVA process (which does not involve any active 
supervision by a court) bore record number CR -2019 -BHM -000514 and was 
supervised by Mr. Ian Colin Wormleighton and Mr. Mathew David Smith of Deloi tte 
LLP of Birmingham.  For this purpose, s. 1 (2) of the UK Insolvency Act requires that 
8 
 
the CVA process must be supervised by a person who is qualified to act as an 
insolvency practitioner.   
11. At the time the CVA proposals were issued in June 2019, Monsoo n had a 
substantial leasehold property portfolio mainly situated in the United Kingdom but 
also including the Cork and Dublin premises.  In the summary statement of affairs as 
at 31st May, 2019 scheduled to the CVA proposal, landlords are the largest categ ory 
of creditors  of Monsoon .  It was estimated that the total owed to landlords was of the 
order of £62.4 million sterling.  A stated purpose of the CVA was to rationalise 
Monsoon’s leasehold obligations, restore the viability of its business, improve its 
liquidity and balance sheet and enable it to meet its financial obligations and return to 
profitability.   
12. Although the CVA process is not supervised by a court, the nominees 
supervising the process (in this case Mr. Wormleighton and Mr. Smith) were requir ed, 
within 28 days after notice of the proposal for the CVA, to submit a report to the High 
Court of England & Wales  stating whether, in their opinion, the proposed CVA had  a 
reasonable prospect of being approved and implemented and whether the proposal 
should be considered by meeting s of the company and of  the company’s creditors.  As 
a matter of English law, t he report was required to state why the supervisors 
considered that the proposal did or did not have a reasonable prospect of being 
approved and imp lemented and why the members should or should not be invited to 
consider the proposal.  This follows from the provisions of ss. 2 of the UK Insolvency 
Act and Rule 2.9 (2) of the Insolvency Rules 2016 (UK) ( “the UK Insolvency 
Rules”).   
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The effect of the C VA on the leases  
13. The proposed CVA divided Monsoon’s leasehold portfolio into seven 
categories of landlords, determined by reference to the commercial and strategic 
importance of each premises.  Both the Cork and Dublin leases were listed within 
category 6 which comprised those premises where Monsoon needed flexibility  and a 
period of time to determine whether the premises could be financially viable.  In 
summary, under the terms of the proposed CVA, leases within category 6 would be 
dealt with as follows:  
(a) The rent payment date would be moved to monthly in advance;  
(b) The rent would be reduced by 65 %, but if no notice to terminate is given by 
either the landlord or Monsoon within a period of six months after 3rd July, 
2019 , the rent would be reduced to zero;  
(c) The landlords would be given break rights at any time after 3rd July, 2019 by 
giving 60 days’  prior notice to Monsoon;  
(d) Equally, Monsoon, as tenant, would be given break rights by giving 60 days’  
prior notice to the landlord at any time after 3rd July, 2019;  
(e) Dilapidations  would be compromised but only in the event that the landlord 
exercised one of its break options, in re turn for Monsoon paying 50% of the 
value of the Dilapidations  claims;  
(f) Business rates were to be compromised in return for 20% of business rates 
which would become due during the remainder of the current business rates 
year (as defined);  
(g) With effect from 3rd July, 2019, any provisions in the leases that provided for a 
right of early termination, or forfeiture by virtue of the entry into the CVA 
would be waived and released and the landlords would have no right to 
determine or amend the leases as a result of the CVA;  
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(h) With effect from 3rd July, 2019, each landlord would waive and release 
Monsoon from any breaches or defaults of any terms of the lease that may 
have arisen or might arise as a result of any event relating to the CVA.   
14. Under s. 3 of  the UK Insolve ncy Act and Rule 15 of the UK Insolvency Rules, 
a decision must be sought from the creditors of a company proposing a CVA as to 
whether the creditors approve the proposal.  The decision of the company’s creditors 
on that issue is to be made by a “qualifyin g decision procedure”  which allows 
decisions to be made by a number of different procedures .  According to the evidence 
as to English law before the court, a physical meeting of creditors usually takes place.  
At the respective meetings of the company and of the company’s creditors, the CVA 
can be approved with or without modifications.  A CVA (and any modification) will 
only be approved when three quarters or more (in value) of the creditors who respond 
vote in favour of it.  In addition, a proposed CVA wi ll not be approved if more than 
half of the total value of the unconnected creditors vote against it.  Where the 
creditors have approved the CVA by the requisite majority, then the decision takes 
effect.  Once the decision takes effect, s. 5 (2) of the UK Insolvency Act provides that 
the CVA will bind every person who, in accordance with the rules, was entitled to 
vote in the qualifying decision procedure, by which the creditor’s decision to approve 
the CVA was made as if that person was a party to the volu ntary arrangement.  As 
explained in more detail below, t his has been described in a number of English 
decisions as a type of “statutory contract”.   
15. In Monsoon’s case, f ollowing the circulation of the proposals for a CVA on 
20th June, 2019, A&L Goodbody So licitors wrote on behalf of the Cork landlords, to 
the directors of Monsoon and to the joint supervisors contending that the purported 
effect of the proposals and leases in Ireland was contrary to Article 11 of the Re cast 
11 
 
Insolvency Regulation .  At this po int, it should be noted that Article 11 addresses 
contracts relating to immovable property.  It will be necessary, at a later point in this 
judgment, to examine its provisions in more detail.  It is sufficient to note, at thi s 
stage, that under Article 11 (1), the effects of insolvency proceedings on a contract 
relating to immovable property are governed solely by the law of the member state 
within the territory where the property is situated.  Article 11 (2) nonetheless gives 
jurisdiction to the “court” which opened main insolvency proceedings, in certain 
circumstances. Again, the provisions of Article 11 (2) are examined in more detail 
below.   
The objections of the Cork and Dublin landlords  
16. In the letter from A&L Goodbody of 27th June, 2019, it was noted that the 
proposed CVA proceeds on the basis that, if approved, it would bind all of Monsoon’s 
creditors including the Cork landlords and that the CVA would be effective in Ireland 
in varying the terms of the Cork leases and in limiting Monsoon’s liabilitie s to the 
Cork la ndlords under those leases.  In the  letter , A & L Goodbody contended that the 
proposal was misconceived and that the CVA would not be recognised or enforced in 
Ireland.  The letter continued:  
“While a UK   … CVA falls within the scope of ‘ma in insolvency proceedings” 
in the … Regulation … and thus must be recognised under Article 19, in all 
other EU Member States …, it remains clear, under Article 11 …, that Irish 
law continues to apply to all Irish leases, being contracts conferring the righ t 
to make use of immovable property.   
Any purported interference with our clients’ property rights under the CVA 
would constitute an impermissible interference with, and unjust attack upon, 
12 
 
our clients’ constitutionally protected property rights and would therefore be 
at variance and unaccepta ble under Irish law.   
Irish law … does not confer any power or competence upon an ‘with out of 
court’ body (such as a CVA) to terminate a contract conferring the right to 
acquire or make use of Irish immovable property.  Indeed, under Irish law, a 
lease m ay be ‘repudiated’ in insolvency proceedings at the instance of the 
debtor (in the context of an examinership), but only where the prior approval 
of the … High Court has been obtained … and only where specific statutory 
preconditions are met.  While a leas e can, in those circumstances be 
‘repudiated’ …, Irish law prohibits the inclusion of provisions varying 
obligations of lessees …. These protections form a fundamental part of Irish 
law in relation to property rights, which the Irish courts are duty bound to 
vindicate.   
In light of the foregoing, the [regulation] cannot give the CVA proposal the 
effect you assert it has.  Accordingly, we call on you to confirm that the 
provisions of the CVA proposal, insofar as they purport to impact on our 
clients’ rights  and entitlements, are hereby withdrawn. …  
Please note that if we do not receive the requested confirmation and 
undertaking before 5 p.m. on … 1st July, 2019, our clients reserve the right to 
take all steps necessary to protect its interests, including (if  necessary) the 
issuing of proceedings before the Irish High Court to  vindicate its property 
rights….”.  
17. A similar letter was written by Walkers, solicitors, on behalf of the Dublin 
landlords, on 1st July, 2019.  That letter also referred to Article 11 of t he Recast 
Insolvency Regulation and the point was made that it was clear, under Irish law, that it 
13 
 
is not possible to modify terms of a lease in an examinership or liquidation process in 
Ireland.  The letter continued in the following terms:  
“8. Furthermor e, we do not understand how proposals for a CVA … could be 
put forward to creditors for their vote without first making an application to 
the English Courts for the requisite order under Section (sic) 11 and all rights 
are reserved  in this regard. …  
9. In any event, even if it is envisaged that the application is made following 
the creditors’ vote but before the schemes’ effective date, you would expect 
that at a minimum the English Court will require the filing of an A ffidavit of 
laws detailing the Irish legislative position … and the limitations on the use of 
repudiation and/or disclaimer powers ….  
10.  Accordingly, the … CVA shall have no force of law in Ireland.  Please 
therefore co nfirm by return that reference s to the Landlord and to the Lease 
will be  removed from the terms of the … CVA.  If such confirmation is not 
received by 2 p.m. on Tuesday 2nd July, 2019, the Landlord reserves its rights 
to take all steps necessary to protect its interests, including (if necessary) the 
issuing of proceedings  before the Irish High Court. … “.  
18. Shoosmiths Solicitors of Birmingham responded to both letters on 2nd July, 
2019.  The substantive part of the response is identical in both letters.  It begins by 
noting the posit ion taken by the landlords that the leases cann ot be varied under the 
terms of the CVA by virtue of Article 11 of the Recast Insolvency Regulations.  The 
letter then continues in the following terms:  
“We do not agree that the position in relation to the efficacy of the … CVA on 
the Lease is as clear cut as you make out.  Article 11 of the … Regulation must 
be considered in light of the other provisions of the … Regulation, a number of 
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which directly co ntradict Article 11.  For example, Article 7 (2) … states that 
the law of the State of the opening of proceedings shall determine the 
conditions for the opening of those proceedings, their conduct and their 
closure.   
In particular, pursuant to Clause 7 (2 ) (e) of the … Regulation, the law of the 
State of the opening of the proceedings  shall determine the effects of 
insolvency proceedings  on current contracts to which the debtor is party.   
It should be noted that, whilst Article 7 (1) is expressed to apply  ‘Save as 
otherwise provided in this Regulation’, the same caveat has not been applied 
to Article 7 (2), leading to the conclusion that Article 7 (2) was intended to 
apply, notwithstanding any provisions of the contrary in the … Regulation.   
As such, the position in relation to the applicability of the … CVA on the terms 
of the Lease is not quite as straightforward as you have asserted.   
Turning to the remainder of your letter, your position appears to be somewhat 
confused.  In the first instance, you claim that the … CVA, insofar as it relates 
to your client, is of no effect.  You then request that the Company withdraws 
the terms of the … CVA , insofar as they relate to Your Client, and then 
threaten Court proceedings if such confirmation is not forthcoming …. 
We make the following comments in relation to these provisions of your letter:  
• If your position is correct as regards Article 11 … (whic h is denied), 
then the … CVA is of no effect in relation to the Lease.  On that basis, 
there is no need for the Company to withdraw the terms of the … CVA 
insofar as they relate to your client.   
• The threat of Court proceedings  at this time is wholly unnec essary and 
inappropriate.  The Proposed CVA will only become operative if it is 
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approved by the Company’s creditors and member s at the meetings 
due to take place on … 3rd July, 2019. As such, and at this time, any 
Court proceedings would be premature, as t here is nothing which 
could be challenged under such proceedings; and  
• In the circumstances , and in particular in light of the financial position 
of the Company, as outlined in the Proposed CVA, we suggest that the 
interests of all parties would be better s erved by engaging in a 
meaningful and constructive manner in order to reach a mutually 
beneficial solution to the matter.  In this regard, we confirm that our 
client is open to such discussions with your client.   
We look forward to hearing from you”.  
19. Ther e was no response to the Shoosmiths letter from either A & L Goodbody 
on behalf of the Cork landlords or from Walkers on behalf of the Dublin landlords.  
Nor was any court challenge taken by any of the landlords at that time.   
The approval of the CVA at t he creditors’ meeting  
20. The meeting of creditors took place on 3rd July, 2019 followed by a meeting 
of members on 8th July, 2019.   
21. On 8th July, 2019, Mr. Wormleighton, on behalf of the joint supervisors, 
submitted a report to the High Court of England & Wal es as required by ss. 4 (6) and 
4 (6A) of the UK Insolvency Act.  The submission of this report does not involve any 
hearing before the court.   
22. In his report, Mr. Wormleighton, listed the creditors who attended the 
creditors meeting.  None of the Dublin o r Cork landlords attended  either in person or 
by proxy .  Of the creditors  who did attend, unconnected creditors owed a total of 
£88,186,672.73 sterling (representing 84.1% in value of those who attended either in 
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person or by proxy ) voted in favour of the proposal while creditors owed a total of 
£16,620,262.01 (representing 15.9% in value of those who attended  either in person 
or by proxy ) voted against the proposal.  As more than three quarters in value of the 
creditors who responded voted in favour of the  proposed CVA, the CVA was 
approved.  The report to the English High Court records that two modifications to the 
CVA  were proposed but they were not accepted by Monsoon  and were not the subject 
of a vote .   
The legal effect under the UK Insolvency Act of t he approval of the CVA  
23. Under s. 4A ( 2) of the UK Insolvency Act, a CVA takes effect once the 
creditors have approved it.  Fur thermore, under English law, a  CVA will thereafter 
bind all of the creditors including those who did not vote.  Section 5 of the UK 
Insolvency Act makes this clear.  Section 5 provides as follows:  
“(1) This section applies where a decision approving a voluntary arrangement 
has effect u nder section 4A.]  
(2) The voluntary arrangement — 
(a) takes effect as if made by the company at the time the creditors decided to 
approve the voluntary arrangement, and  
(b) binds every person who in accordance with the rules — 
(i) was entitled to vote in the qualifying decision procedure by which the 
creditors’ decision to approve the voluntary arrangement was made, or  
(ii) would have been so entitled if he had had notice of it,  
as if he were a party to the voluntary arrangement ”. 
24. As a consequence of s. 5, the English authorities have characterised CVAs as 
giving rise to a type of statutory contract  albeit a non -consensual one insofar as 
17 
 
dissentients and non -participating creditors are concerned .  In Re Br elec Installations 
Ltd [2001] BCC 421 at p. 423, Blackburn e J. explained the position as follows:  
“…the effect of the creditors’ approval of the debtors’ proposal is, as is well -
established, to give rise to a species of statutory contract between the creditors 
bound by the arrang ement on the one hand and the debtor on the other”.   
25. Similar observations were made by Peter Gibson L.J. in Re: NT Gallagher & 
Son Ltd [2002] 1 WL R 2380 who said, at para. 4 of his judgment that a CVA:  
“operates as a form of statutory contract to which ev en dissentients and non -
voters receiving notice of and entitled to vote at the meeting are treated as 
parties”.  
26. The position of dissentients was explained in more detail by Chadwick L.J. in 
Johnson v. Davies  [1999] Ch. 117 at p. 138 in the context of indi vidual voluntary 
arrangements (which are the equivalent of CVAs in the case of personal insolvency) 
in the following terms:  
“Unlike the earlier legislation , s.260 (2) … does not, in terms, impose the 
arrangement on the dissenting creditor whether or not he  has agreed to its 
terms; rather, he is bound by the arrangement as the result of the statutory 
hypothesis.  The statutory hypothesis requires him to be treated as if he had 
consented to the arrangement.  The consequence … is that the legislature must 
be taken to have intended that both the question of whether the debtor is 
discharged by the arrangement and the question whether co -debtors and 
sureties are discharged by the arrangement were to be answered by treatin g 
the arrangement as consensual; that is to  say, by construing its terms as if 
they were terms of the consensual agreement between the debtor and all those 
18 
 
creditors who, under the statutory hypothesis, must be treated as being 
consenting parties”.   
27. As noted previously, the approval of a CVA does not require any court 
involvement. As a consequence, any creditor aggrieved by a CVA, does not have any 
right or opportunity to make representations to a court before the CVA is voted on and 
approved.  Once a CVA has been approved  by the requisite majority  of unconnected 
creditors , a disgruntled creditor would have the ability to bring an application under s. 
6 of the UK Insolvency Act.  However, such an application may only be made once 
the CVA has taken effect.  Thus, the court will only have a role after  the event.  There 
is no statutory mechanism by which the court can be involved prior to the approval of 
a CVA by the requisite majority of unconnected creditors.   
28. Section 6 (1) envisages two specific grounds of challenge namely  (a) unfair 
prejudice or (b) some material irregularity at or in relation to the meeting or in relation 
to the procedure by which the company’s creditors decided whether to approve the 
CVA.  Insofar as relevant, s. 6 (1) provides as follows:  
“(1) Subject to this section, an applicat ion to the court may be made, by any of 
the persons specified below, on one or both of the following grounds, 
namely — 
(a)that a voluntary arrangement  which has effect under section 4A  unfairly 
prejudices the interests of a creditor, …;  
(b)that there has been some material irregularity at or in relation to the 
meeting of the company, or in relation to the relevant qualifying decision 
procedure.”  
29. Section 6 (2) makes clear that a person entitled to vote in the relevant 
qualifying decision procedure (namely t he procedure by which creditors decide 
19 
 
whether to approve a voluntary arrangement) will be entitled to apply to the court 
under s. 6 (1) on either or both of the grounds specified in that subsection.   
30. In theory, a creditor could also attend the meeting of  creditors and make 
representations to that meeting and propose a modification to the proposed CVA.  
Under Rule 15.34 (3) (a) of the UK Insolvency Rules, such a modification would 
require approval by at least three quarters (by value) of the creditors voti ng on the 
CVA.  However, as Mr. Tom Smith Q.C. observed in his expert report on behalf of 
the landlords, the practical ability of a creditors meeting to take into account 
representations made by any one or more creditors (or to consider any proposed 
modifi cation) may well be impeded by the fact that many votes are cast through 
proxies given in advance (often to the chairman of the meeting).  Furthermore, 
creditors are entitled to vote on the proposed CVA and  on any proposed modification 
in what they conside r to be  their own best interests.   
The commencement of proceedings in Ireland by the Cork and Dublin landlords  
31. No attempt was made by either the Dublin landlord or the Cork landlords to 
attend the creditors’ meeting and seek a modification of the proposal .  Nor was any 
application brought by any of the landlords, in the English courts, under s.6 of the UK 
Insolvency Act.  Instead, the present proceedings were brought by plenary summons 
issued on 19th July, 2019 (in respect of the Cork Landlords) and on 7th August, 2019 
(in respect of the Dublin landlord).  As noted previously, the claim made by each of 
the landlords is for a declaration that the relevant lease continues in full force and 
effect and is unaffected by any purported modification or variation ma de pursuant to 
the CVA.  Alternatively, a declaration is sought pursuant to Article 33 of the Recast 
Insolvency Regulation that the CVA, insofar as it purports to effect any variations of 
or modifications to the terms of the respective leases, is not entit led to be recognised 
20 
 
or enforced in the State on the grounds that the CVA is manifestly contrary to the 
public policy of the State.   
32. In making their  case, the landlords rely principally on Article 11 of the Recast 
Insolvency Regulation (which specifically  deals with contracts relating to immovable 
property).  The landlords’  reliance on Article 33 (dealing with public policy reasons 
for refusing to enforce a judgment handed down in another Member State) has been 
put forward as an alternative basis to the  principal case made by  them  with reference 
to Article 11.  In this context, it may seem odd that a CVA could be regarded as a 
“judgment”.   However, the Recast Insolvency Regula tion expressly extends to the 
CVA procedure in the United Kingdom.  F or the reason s explained in more detail 
below , a CVA constitutes “insolvency proceedings” for the purposes of the Recast 
Insolvency Regulation.  It should also be noted that, for this purpose, a “court” is 
defined in the Regulation as including not just a judicial body  but any other competent 
body empowered in a Member State to open insolvency proceedings or to confirm 
such opening or to take decisions in the course of such proceedings.   
33. In order to understand the issues which arise, it is necessary to consider the 
terms of the Recast Insolvency Regulation.  As an EU Regulation, this has binding 
force in Ireland.   
The Recast Insolvency Regulation  
34. Recital 66 to the Recast Insolvency Regulation tells us that the Regulation is 
intended to set out “ uniform rules on conflict of laws which replace, within their 
scope of application, national rules of private international law”.   The same Recital 
also specifies that, unless otherwise stated, the law of the Member State of the 
opening of insolvency proceedings should  be applicable (which the Regulation refers 
to as the lex concursus ).  Recital 66 continues in the following terms:  
21 
 
“This rule on confl ict of laws should be valid both for the main insolvency 
proceedings and for local proceedings. The lex concursus determines all the 
effects of the insolvency proceedings, both procedural and substantive, on the 
persons and legal relations concerned. It go verns all the conditions for the 
opening, conduct and closur e of the insolvency proceedings”.  
35. Notwithstanding the provisions of Recital 66, the Regulation recognises in 
Recital 67 that the approach described in Recital 66 “may interfere with the rules 
unde r which transactions are carried out in other Member States”.  For that reason, 
Recital 67 continues in the following terms:  
“To protect legitimate expectations and the certainty of transactions in 
Member States other than that in which proceedings are ope ned, provision 
should be made for a number of  exceptions to the general rule”.  
36. Thereafter, a number of Recitals deal with particular forms of exception to the 
general principle stated in Recital 66.  These include rights in rem  (addressed in 
Recital 68), p ayment systems and financial markets (addressed in Recital 71) and 
employment rights (which are the subject of Recital 72).  There is no specific Recital 
addressing contracts relating to immoveable property (such as leases) but these are 
addressed in Artic le 11 (dealt with below).   
37. Article 2 of the Regulation prov ides a number of important definitions.  These 
include the definition of “insolvency proceedings” which are defined by reference to 
the proceedings listed in Annex A.  In the case of the United Ki ngdom, Annex A 
expressly includes “voluntary arrangements under insolvency legislation”.  Thus, 
CVAs under the UK Insolvency Act, are included among “ insolvency proceedings ” 
for the purposes of the Regulation.  As noted above, the definition of “court” in 
Article 2 (6) (ii) expressly extends not only to a judicial body but also “any other 
22 
 
competent body of a Member State empowered to open insolvency proceedings , to 
confirm such opening or to take decisions in the course of such proceedings ”.   
38. In turn, Arti cle 2 (7) defines a “judgment opening insolvency proceedings” as 
including “the decision of any court to open insolvency proceedings…”.  Given the 
definition of “court”, it appears to follow that a judgment opening insolvency 
proceedings is capable of bein g taken by a non -judicial body.  This is reinforced by 
Recital 20 which states:  
“Insolvency proceedings do not necessarily involve the intervention of a 
judicial authority. Therefore, the term ‘court’ in this Regulation should, in 
certain provisions, be gi ven a broad meaning and include a person or body 
empowered by national law to open insolvency proceedings. …” 
39. Article 3 (1) provides that the courts of the Member State in whose territory 
the centre of main interests of a debtor is situated are to have jur isdiction to open 
insolvency proceedings.  These are known in the Regulation as “main insolvency 
proceedings” .  For this purpose,  the centre of main interests is the place where the 
debtor conducts the administration of its interests on a regular basis and which is 
ascertainable by third parties.  In the case of corporate bodies, there is a rebuttable 
presumption that its centre of main interests is located at its registered office.  There is 
no dispute between the parties here that the centre of main interests of Monsoon is in 
the jurisdiction of England & Wales.  As explained in para. 42 this has the 
consequence that English law ap plies, except where the Regulation otherwise 
provides.   
40. Article 3 also envisages that secondary proceedings in another Member State 
may be necessary.  This is consistent with Recitals 22 and 23.  Recital 22 
acknowledges that, as a result of wide differenc es between the substantive laws of the 
23 
 
Member States, it is not practicable  to introduce insolvency proceedings with 
universal scope throughout the EU.  Furthermore, Recital 23 recognises that, in order 
to protect the diversity of interests, secondary inso lvency proceedings ( to run in 
parallel with the main insolvency proceedings)  may be opened in a Member State 
where a debtor has an establishment.  Recital 23 makes clear that the effects of 
secondary insolvency proceedings are  limited to the assets located  in that State.  
Article 3 (2)  thus provides that the courts of another Member State will have 
jurisdiction to open insolvency proceedings against  a debtor “only if it possesses an 
establishment within the territory of that other Member State” in which cas e the 
effects of those proceedings “ shall be restricted to the assets of the debtor situated in 
the territory of the latter Member State”.  
41. Article 4 requires a court (which is asked to open insolvency proceedings ) to 
examine, of its own motion, whether it  has jurisdiction pursuant to Article 3.  In 
addition, Article 5 permits the debto r or any creditor to challenge  the decision opening 
main insolvency proceedings.   
Article 7  
42. Consistent with Recital 66, Article 7 (1) provides that, save as otherwise 
provid ed in the Regulation, the law applicable to insolvency proceedings and their 
effects is to be that of the Member State of the territory in which such proceedings 
have  been opened.  In turn, Article 7 (2) provides that the law of the State of the 
opening of  proceedings is to determine the conditions for the opening of the 
proceedings, their conduct and their closure and in particular is to determine a number 
of specific matters.  Among the matters there enumerated are the effects of insolvency 
proceedings on  current contracts to which the debtor is party (expressly provided for 
in Article 7 (2) (e)), the conditions for and the effects of closure of insolvency 
24 
 
proceedings “in particular by composition” (this is expressly  addressed in  Article 7 
(2) (j)) and cre ditors’ rights after the closure of insolvency proceedings (which is 
expressly identified in Article 7 (2) (k)).   
43. As pre figured in Recital 68, Article 8 (1) provides that the opening of 
insolvency proceedings is not to affect the rights in rem  of creditor s or third parties in 
respect of tangible or intangible, moveable or immov eable assets which are situated 
within the territory of another Member State at the time of opening of the 
proceedings.  However, Article 8 (2) suggests that rights in rem have a par ticular 
meaning.  None of those meanings appear to be immediately relevant in the context of 
the issues which arise in respect of the Cork and Dublin leases.  In those 
circumstances , I do not believe that it is necessary to address Article 8 in any detail.  It 
is sufficient to note that Article 8 is clearly an exception to the provisions of Article 7.  
As noted in para. 42  above, Article 7 (1) provides that the law of the State of th e 
opening of proceedings will  govern the insolvency proceedings “save as otherwise 
provided in this Regulation”.  Further exceptions to this general rule are to be found 
in Article 12 (which expressly provides that the rights and obligations of parties to a 
payment or settlement system or to a financial market are governed solely by the law 
of the Member State applicable to that system or market) and Article 13 (which 
provides that the effects of insolvency proceedings on employment contracts and 
relationsh ips is governed solely by the law of the Member State applicable to the 
contract of employment).   
Article 11  
44. A further exception is to be found in the  provisions of Article 11 of the 
Regulation.  Article 11 is of crucial importance for present purposes. A rticle 11 
25 
 
expressly deals with contracts relating to immoveable property.  Article 11 (1) 
provides as follows:  
“The effects of insolvency proceedings on a contract conferring the right to 
acquire or make use of immoveable property shall be governed solely by the 
law of the Member State within the territory of which the immoveable property 
is situated”.  
45. The rationale underlying Article 11 can be traced back to the Virgos Schmidt 
report of May 1996 (in respect of what was then intended to be a Convention on 
Insolvency  Proceedings ).  At p. 80 of their report, the authors provided commentary 
on Article 8 of that Convention which was in identical terms to  Article 8 of the 
Insolvency Regulation 2000 (Council Regulation (EC) No. 1346/2000), the 
predecessor to the R egulation, and which was also in identical terms to  Article 11 (1) 
of the Regulation.  At paras. 117 -118 of their report, the authors stated as follows:  
“117.  The general rule on conflicts of law is that it falls to the law of the … 
State of the opening o f proceedings to regulate the effects of the proceedings 
on current contracts to which the debtor is a party ….  
To this extent, the applicable national insolvency law interferes with and 
overlaps the rules applicable to contracts, which derive from the la w 
applicable under the 1980 Rome Convention.   
118.  This rule, which overall is positive for the general interest of the 
creditors may be detrimental to other interests.  In all the Contracting States, 
contracts covering immoveable property are subject to  special rules, both of 
conflict of laws as well as of international jurisdiction, in order to take into 
account several interests: those of the parties to the contract (e.g. tenants) and 
26 
 
the general interests protected by the State in which the immoveable  property 
is to be found.   
Protection of these specific interests justify an exception to the application of 
the law of the State of the opening of proceedings.  Hence Article 8 makes the 
effect of the insolvency proceedings exclusively  subject to the law of the … 
State where the … property is located.   
Solely means that only the law of the … State on location of the immoveable 
(including its insolvency law), and not the ‘lex concursus’ … is applicable to 
establish these effects”.  
46. A similar explanation is given by Moss, Fletcher & I saacs on the EU 
Regulation on Insolvency Proceedings (3rd ed., 2016) at para. 8.239 where the authors 
state:  
“The general principle of the Regulation is that the law of the Member State of 
the opening of proceedings applies  to govern those proceedings including 
determining the effects of the proceedings on any contracts to which the 
debtor is a party …. However, it was recognized that there is an equally 
important interest in permitting the relevant national law to apply to contracts 
concerning immovable property.  In particular, contracts relating to 
immovable property encompass a number of special factors, inclu ding of 
course the fact that the property is permanently located within a particular 
state, and the fact that contracts relating to immovable property are subject to 
special rules in many states, which makes the application of relevant national 
law desirab le.  Article 8 … therefore gives effect to this by providing that 
effects of insolvency proceedings on a contract conferring the right to acquire 
or make use of immoveable property shall be governed solely by the law of the 
27 
 
Member State within the territor y of which the immoveable property is 
situated.  The reference to the law of that Member State includes a reference 
to its insolvency law.   
Article 8 … applies to contracts to ‘acquire’ or ‘make use’ of immovable 
property and it therefore applies to both contracts for the use of immovable 
property (such as leases) and contracts covering the sale and transfer of 
immovable property’.   
The interaction between Article 7 and Article 11  
47. Although Moss,  Fletcher & Isaacs refer in the above  passage to Article 8  of 
the 2000 Regulation , their observations app ly with equal force to Article 11  (1) which , 
as noted above, is in identical terms to Article 8.  Notwithstanding these observations 
by the authors of the Virgos Schmidt report and of Moss, Fletcher &  Isaacs, the re was 
a debate at the hearing as to the interaction between Article 7 and Article 11.  It will 
be recalled in this  context , that in the Shoosmiths’ letters of 2nd July, 2019 (quoted in 
para. 18  above) it was argued that Article 11 must be considered in li ght of the other 
provisions of the Regulation including Article 7 (2).  In the course of the hearing, 
certain aspects of Article 7 (2) were emphasised by counsel for Monsoon including 
the provision contained in Article 7 (2) (j) that the law of the State o f the opening of 
proceedings is  to determine the conditions for and the effects of closure of those 
proceedings (in particular by composition).  In the Shoosmiths’ letter of 2nd July, 
2019, the argument was made that, whilst Article 7 (1) is expressly to a pply “ save as 
otherwise provided in this Regulation ”, the same caveat has not been applied to 
Article 7 (2) and it was suggested that this supports the conclusion that Article 7 (2) 
was intended to apply notwithstanding any provisions to the contrary in th e 
Regulation.  I do not believe that such an argument is sound.  It seems to me that 
28 
 
Article 7 (2) is simply an enumeration of the matters which can be determined, in 
accordance with Article 7 (1) by the law of the State of the opening of insolvency 
procee dings.  I do not believe that there is any plausible basis to suggest that the 
matters identified in Article 7 (2) can be said to operate notwithstanding any provision 
to the contrary elsewhere in the Regulation.  Thus, for example, there can be no doubt 
that Article 11 is an exception to the provisions of Article 7 (2) (e) which provides 
that the law of the State of the opening of insolvency proceedings is to determine the 
effects of those proceedings on “current contracts to which the debtor is party”.  In 
my view, it is clear that Article 11 specifically provides a different rule in relation to 
contracts which fall within its ambit.  In those circumstances, it seems to me to follow 
that Article 11 displaces the application of Article 7 (2) (e) in any cas e covered by 
Article 11.  That is the unsurprising view taken, for example, by Bork & Mangano in 
European Cross -Border Insolvency Law (2016 ) at para. 4.81 where they say:  
“4.81… Art. 11 (1) states that ‘the effects of insolvency proceedings on a 
contract c onferring the right to acquire or make use of immoveable property 
shall be governed solely by the law of the Member State within the territory of 
which the immoveable property is situated’.  Thus, the law of the State of the 
opening of proceedings cannot c ompel performance or termination of the 
contract; only the law of the State in which the immoveable property is 
situated (lex rei sitae) can do that.  This is therefore an exception to the 
general rule stated in Art. 7 (2) (e), which provides that the lex fori concursus 
shall govern the effects of the insolvency proceedings on current contract.  The 
exception is justified by the particular and distinct regimes Member States 
have in relation to contracts concerning immoveable property as well as the 
particul ar vulnerabilities of parties to those contracts, especially tenants”.  
29 
 
48. That said , Article 11 will only dis apply the provisions of Article 7 to the extent 
that Article 11 makes contrary provision to Article 7.  Thus, for example, Bork & 
Mangano, in para. 4. 82, suggest that Article 11 is not an exception to Article 7 (2) (m) 
which deals with rules relating to voidness, voidability or unenforceability of legal 
acts detrimental to the general body of creditors.  It might, accordingly, be argued 
that, likewise, Article 11 does not address the conditions for or the effects of closure 
of insolvency proceedings and that, accordingly, it cannot be said to be an exception 
to Article 7 (2) (j).  However, if the closure of insolvency proceedings in accordance 
with the l aw of the State of the opening of such proceedings  affects a contract falling 
within Article 11 in a manner inconsistent with the law of the State where the 
immoveable property the subject of that contract is situated, that would have the 
potential to lead  to a conflict between the two provisions and, in such circumstances, 
it would seem to me to follow that Article 11 (to the extent that it is inconsistent with 
Article 7 (2) (j)) would have to prevail.  Whether there is such a conflict  in this case  
will re quire careful analysis of the meaning and effect of Article 11 and , in particular , 
Article 11 (2) (addressed further below).   
The arguments as to the meaning and effect of Article 11  
49. There was also some debate at the hearing as to whether the provi sions o f 
Article 11 (1) extend  to a lease.  In my view, there  is no doubt that Article 11 (1) does 
extend to a lease.  In simple terms,  a lease is a contract conferring the right on a lessee 
to make use of immoveable property.  The lease therefore falls within th e express 
words of Article 11 (1).  It was argued on behalf Monsoon that, while Article 11 (1) 
specifically mentions the right to acquire and make use of immovable property, it 
does not refer to other rights that might be involved in such a contract and th erefore 
cannot extend to the issues wh ich arise between the parties to  these proceedings  
30 
 
insofar as the CV A purports to interfere with the rights of the landlords under the 
Cork and Dublin leases .  I cannot accept that argument.  Article 11 (1) is quite cl ear in 
its terms.  It creates an exception to Article 7 (1) in respect of contracts conferring the 
right to acquire or m ake use of immoveable property .  The exception is not limited to 
those aspects of the contract which are concerned solely with the right  to acquire or 
make use of the immoveable property.  The reference in Article 11 (1) to “the right to 
acquire or make use of immoveable property” is there to  identify the type of contract 
which is subject to the exception created by Article 11 (1).  If a contract falls within 
the ambit of those words, then it follows, having regard to the language used in 
Article 11 (1) that the effects of insolvency proceedin gs on that contract will be 
governed solely by the law of the Member State within whose territory the 
immoveable property, the subject matter of that contract, is situated.  Thus, if Article 
11 (1) stood on its own, one could readily conclude that the law of Ireland applied to 
the issue as to the effects of the CVA process on the Cork and Dublin leases.   
However, Article 11  (1), unlike its predecessor provision contained in Article 8 of the 
Insolvency Regulation 2000 does not stand on its own.  Article 11 (1) must now be 
read in conjunction with Article 11 (2).     
50. Article 11 (2) now envisages that the “court” which opened main insolvency 
proceedings may have a role  notwithstanding that the law governing the effects of 
insolvency proceedings on  the relevant  contract is the law of a different Member 
State .  In particular, Article 11 (2) contemplates that the “court”  which opened main 
insolvency proceedings will  have jurisdiction to approve the termination or 
modification of a contract relating to immoveable p roperty where two specific 
conditions are satisfied.  Article 11 (2) provides as follows:  
31 
 
“The court which opened main insolvency proceedings shall have jurisdiction 
to approve the termination or modification of the contracts referred to in this 
Article wh ere: 
(a) the law of the Member State applicable to those contracts requires 
that such a contract may only be terminated or modified with the 
approval of the court opening insolvency proceedings; and  
(b) no insolvency proceedings have been opened in that Member State .” 
51. Moss, Fletcher & Isaacs, at para. 8.597 address Article 11 (2) in the following 
terms:  
“Whereas Article 11 (1) is a general exclusion from the effects of insolvency 
proceedings on a contract relating to immoveable property, causing the 
contract to be governed solely by the law of the Member State within the 
territory of which the immoveable property is situated, Article 11 (2) … 
creates an exception to that exception.  It confers jurisdiction on the court 
which has opened main insolvency  proceedings to approve the termination or 
modification of contracts relating to immoveable property in certain 
circumstances .  The relevant circumstances  are where the law of the Member 
State applicable to the contract requires that the contract may only be 
terminated or modified with the approval of the court opening insolvency 
proceedings and where no insolvency proceedings have  been opened in that 
Member State.  Without this conferral of jurisdiction, a serious problem may 
have arisen in such a case, if, for example, it were not possible to open 
secondary proceedings in the Member State within the territory of which the 
moveable  property was situated.  In any event, even where the opening of local 
32 
 
territorial proceedings is possible in such a case, it would be an unnecessary 
expense and complication, which is avoided by this additional provision”.  
52. A similar explanation is provide d by Bork & Mangano who say, at para. 4.84:  
“Art. 11 (2) operates where the law applicable to the contract under Art. 11 
(1) (the lex rei sitae) states that a termination or modification of the contract 
is subject to the approval of the court opening insol vency proceedings, and no 
insolvency proceedings have  been opened in the relevant Member State.  In 
such a case, the court which opened main insolvency proceedings may 
approve the termination or modification.  Art. 11 (2) does not alter the effect 
of Art. 11 as a whole, which is to make the lex rei sitae the applicable law.  
The effect is to enhance the applicability of the lex rei sitae by making sure 
that where it has a procedural effect which is impossible to fulfil, the court 
opening proceedings can tak e the place of the court designated under it and 
therefore fulfil it”.  
53. Counsel for the landlords placed some reliance on the use of the word 
“where” in Article 11 (2).  He argued that the opening words of Article 11 (2) will 
only be engaged where the prov isions of para. (a) and (b) are both satisfied.  
Accordingly, c ounsel submitted that the allocation of competence to the “court” 
which opened the main proceedings is not automatic.  The two conditions  for its 
operation (namely those described in paras. (a)  and (b))  must be satisfied.  Counsel 
argued that this followed from the clear language of Article 11 (2).  For the avoidance 
of any doubt, he also referred, in this context, to  Brinkmann’s “European Insolvency 
Regulation” (2019) at p. 143 where the author s expressly describe the provisions of 
Article 11 (2) as requiring that two conditions must be cumulatively met for the 
provision to bite.  He therefore submitted that a conscious decision has to be made by 
33 
 
the relevant  “court” as to whether those conditio ns have, in fact, been satisfied before 
any decision can be made to apply Article 11 (2).   
54. Counsel for the landlords stressed  that, under Article 11 (2), the “court” 
which opened the main insolvency proceedings does not have the power to apply its 
own law  in relation to contracts relating to immoveable property.  He argued that 
Article 11.1 makes very clear that the law governing such a contract is solely the law 
of the Member State within whose territory the immoveable property is situated.  
Counsel for t he landlords relied, in this context, on the observations made by Bork & 
Mangano (quoted above) to the effect that, where Article 11 (2) applies, the court 
opening proceedings takes the place of the court designated under Article 11 and 
fulfils the functio n of the latter.  Counsel suggested that the court opening proceedings 
acts as a proxy for the court of the jurisdiction in which the immoveable property is 
situated. Counsel adopted, as part of his submission, the following statement by 
Brinkmann at p. 14 4: 
 “9. The legal consequence of para. 1 is that the la w of the Member State in 
whose  territory immoveable property is located is exclusively determinative 
for the effects of the insolvency proceedings on a contract conferring the right 
to acquire or use that property. ‘Exclusively’ means that only the law of the 
State where the property is situated (including that State’s insolvency law) is 
applicable, but not the lex fori concu rsis in accordance with Art icle 7 ….  
 10.  Where the conditions  contained in para. 2 are met, the approval 
requirements in the State in which the property is located will be recognised, 
but the competence to provide such approval will be allocated to the court that 
it opened the mai n insolvency proceedings.  Consequently, the court that has 
opened the insolvency proceedings must  apply for in law, i.e. the law of the 
34 
 
Member State in  which the property is situated  when approving or modifying 
such contracts.” ( Emphasis added) . 
55. Counsel f or the landlords therefore argu ed that, in this case, if the CV A 
process was to comply with the requirements  of the Regulation , the relevant 
conditions  contained in Article 11 (2) would have to be met as part of that process 
and, in particular, Irish law w ould have to be applied in addressing the effect of the 
CVA process on the rights of the Irish landlords under the Cork and Dublin leases.  
He suggested that the proposed modification of the Irish leases by the CVA could not 
be achieved applying Irish law.   In making that argument, counsel referred to the 
provisions of s. 544 (1) of the Companies Act, 2014 dealing with the posit ion of 
leases in an examinership (which is the nearest equivalent process in Ireland to a 
CVA).  Under s. 544 (1) of the 2014 Act, proposals for a compromise or scheme of 
arrangement in an examinership “shall not contain, nor shall any modification by the 
court under Section 541 of such proposals result in their containing” a provision 
which provides for either (or both) a reduction i n the amount of any rent reserved 
under the lease or a requirement that the lessor shall not (in the event of non-payment  
of rent or a failure to comply with any other covenant or obligation of the lease) 
exercise any right to recover possession of the lan d or to forfeit the lease or recover 
the amount of the rent or claim damages in respect of the failure to comply with such 
a covenant or obligation.   
56. In contrast, counsel for Monsoon argued that, once the conditions to the 
operation of Article 11 (2) have been triggered, the court opening main insolvency 
proceedings must be entitled to apply its own law.  He submitted  that there is nothing 
in the langua ge of Article 11 (2) which suggests that the jurisdiction  of the “court” 
which  open ed main insolvency proceedings to  approve the termination or 
35 
 
modification of a contract relating to immovable property is in any way confined to 
the jurisdiction to exercise the law of the Member State within whose territory the 
property in question lies.  He contrasted the language used in Article 11 (2) with the 
equivalent provision (dealing with employee rights) contained in Article 13 ( 2) which 
expressly provides that the courts of the Member State in which secondary insolvency 
proceedings relating  to employment relationships may be opened “shall retain 
jurisdict ion to approve the termination or modification of the contracts referred to in 
this Article even if no insolvency proceedings have b een opened in that Member 
State”.  
57. Counsel for Monsoon also argued that if the “court” opening main insolvency 
proceedings is  to exercise a jurisdiction given by Article 11 (2), it must do so in 
accordance with its own insolvency law.  Counsel submitted  that Article 11 (1) has to 
be read in the context of Article 11 (2) and the jurisdiction conferred by the latter.  He 
suggested  that it makes sense that the “court” having jurisdiction over the main 
proceedings  should be entitled,  as part of the “overall integrity” of the insolvency 
proces s being managed by that court, to vary or terminate the relevant contracts (in 
this case the Cork and Dublin leases).  
58. I have to say that I find it difficult to see how the arguments advanced on 
behalf of Monsoon (as outlined in paras. 56 to 57 above) can be reconciled with the 
clear language of Article 11.  In the first place, Article 11 (1) expre ssly provides that 
the law of the situs of the immoveable property must be applied.  Article 11 (2) does 
not, by its terms, give the court, before which the main proceedings were opened, the  
ability to apply its own law. Article 11 (2) merely confers on th at court jurisdiction to 
approve the termination or modification of a contract  falling within Article 11 (1) 
where the condition s set out in para. (a) and (b) are satisfied.  While the court opening 
36 
 
main insolvency proceedings will  be entitled to exercise jurisdiction, there is no 
mandate within Article 11 conferring any power on that court to apply its own law.  
Article 11 (1) is not modified in any way.  Thus, the effects of insolvency proceedings 
on a contract falli ng within Article 11 (1) remain  governe d “solely by the law of the 
Member State within the territory of which the immoveable property is situated” .   
 
 
The obligation on the court to recognise and give effect to the CVA  
59. In the circumstances outlined in para. 58  above, I must reject the argument 
made by counsel for Monsoon in relation to Article 11 (2). However, that is not the 
end of the enquiry.  C ounsel for Monsoon has highlighted  and invoked  the provisions 
of the Regulation dealing with mutual recognition.  H e argued that it was a key 
principle of the Regulation that this court must recognise the “judgment” and the 
composition with creditors embodied in the CVA (as approved at the creditors’ 
meeting) and that it is not open to the landlords to argue that some part of the CVA 
process was invalid or was arrived at contrary to the provisions of Article 11.  
Counsel submitted that, if such an argument was to be made, the only appropriate 
mechanism by which this could be done by the landlords was to raise it before the 
courts of England & Wales.  In the context of this submission on behalf of Monsoon, 
the provisions of Articles 19, 20 and 32 of the Regulation are relevant.   
Article 19  
60. Article 19  sets out the governing principle relating to the recognition of the 
opening of insolvency proceedings  in another Member State.  In this context, the 
current author of Goode on the Principles of Corporate Insolvency Law  (5th ed., 2019) 
37 
 
at para. 15 – 40 confirms that, in the case of a CVA, the  proceedings are opened upon 
the CV A taking effect.  Article 19 provides as follows:  
“1. Any judgment opening insolvency proceedings handed  down by a court of 
a Member State which has jurisdiction pursuant to Article 3 shall be 
recognised in all other Member States from the moment that it b ecomes 
effective in the State of the opening of proceedings….  
2. Recognition of the proceedings referred to in Article 3(1) shall not preclude 
the opening of the proceedings referred to in Article 3(2) by a court in another 
Member State. The latter procee dings shall be secondary insolvency 
proceedings wi thin the meaning of Chapter III”.  
Article 20  
61. In addition, the provisions of Article 20  should be noted .  It addresses the 
effects of recognition of a judgment opening insolvency proceedings and provides as 
follows:  
“1.  The judgment opening insolvency proceedings as referred to in Article 
3(1) shall, with no further formalities, produce the same effects in any other 
Member State as under the law of  the State of the opening of proceedings, 
unless this Regulation provides otherwise and as long as no proceedings 
referred to in Article 3(2) are opened in that other Member State.  
2.  The effects of the proceedings referred to in Article 3(2) may not be 
challenged in other Member States. Any restriction of creditors' rights, in 
particular a stay or discharge, shall produce effects vis -à-vis assets situated 
within the territory of another Member State only in the case of those credito rs 
who have given their  consent”.  
38 
 
62. For completeness, it should be noted that no secondary proceedings were ever 
opened under Article 3 (2) in this case and that accordingly the references to Article 3 
(2) in Article 20 are not immediately relevant for present purposes.   
Article 32 
63. Counsel for Monsoon placed particular emphasis upon the provisions of 
Article 32 which addresses the recognition and enforceability of “other judgment s”.  
The reference to “other judgments” relates to judgments other than those concerned 
with the openin g of insolvency proceedings.  Article 32 also expressly  extends  to 
cover  compositions  approved by the  “court” which opens the main  insolvency 
proceedings . Article 32 provides as follows:  
“Recognition and enforceability of other judgments  
1.   Judgments handed down by a court whose judgment concerning the 
opening of proceedings is recognised in accordance with Article 19 and which 
concern the course and closure of insolvency proceedings, and compositions 
approved by that court, shall also b e recognised with no further formalities. 
Such judgments shall be enforced in accordance with Articles 39 to 44 and 47 
to 57 of Regulation (EU) No 1215/2012.  
The first subparagraph shall also apply to judgments deriving directly from 
the insolvency proceed ings and which are closely linked with them, even if 
they were handed down by another court.  
The first subparagraph shall also apply to judgments relating to preservation 
measures taken after the request for the opening of insolvency proceedings or 
in conn ection with it.  
39 
 
2.   The recognition and enforcement of judgments other than those referred to 
in paragraph 1 of this Article shall be governed by Regulation (EU) No 
1215/2012 provided that th at Regulation is applicable”.  
Discussion and analysis of the issues which arise in respect of Article 32  
64. Counsel for Monsoon submitted that the decision taken by the meetings of 
creditors of Monsoon to approve the CVA constituted a judgment which concerned 
the course and closure of the insolvency proceedings under  the UK Insolvency Act 
and that it was also a “composition”  approved by a  “court”  within the meaning of the 
Regulation .  Counsel therefore submitted that the “judgment” fell within the clear 
terms of Article 32 (1) such that the court must recognise it witho ut any further 
formality.  In my view, this aspect of the argument made by counsel for Monsoon is 
correct.  As noted in para. 37 above, the definition of “court” in Article 2 (6) (2) 
expressly extends not only to a judicial body but also to “any other comp etent body of 
a Member State empowered to open insolvency proceedings, to confirm such opening 
or to take decisions in the course of such proceedings”.  This is also strongly 
reinforced by the provisions  of Recital 20 (quoted in para. 38  above) which makes  it 
very clear that insolvency proceedings do not necessarily involve the intervention of a 
judicial authority and that, accordingly, the term “ court ” should be given a broad 
meaning and include a person or body empowered by national law to open insolvency  
proceedings.  Annex A to the Regulation expressly provides that, in the case of the 
United Kingdom, voluntary arrangements  under insolvency legislation (which would 
include  the CVA) are to be taken as “insolvency proceedings ” for the purposes of 
Article 2  (4).  In this context, it seems to me that the following observation by the 
current author of Goode on  Principles of Corporate Insolvency Law  at para. 15 -13 
represents a correct statement of the law:  
40 
 
“As to CVAs, which do not involve the court at all exce pt where an 
application is made under s. 4A of the Insolvency Act, it might appear hard to 
see how the conclusion of a CVA could be regarded as the opening of 
insolvency proceedings or how the participating creditors and members could 
collectively constitu te ‘the court’.  But voluntary arrangements are included in 
the list of insolvency proceedings in Annex A, while the supervisor of a CVA 
features in the list of insolvency practitioners in Annex B, and these inclusions 
would be deprived of all meaning if the coming into force of a CVA were not 
to be treated as the opening of insolvency proceedings by a ‘court’ consisting 
of the parties to the CVA.  In Re. Salvage Association Ltd, Blackburn e J. held 
that the parties to a CVA did indeed constitute  a ‘court’ for the purposes of the 
Regulation.  By contrast, purely consensual restructurings (work -outs) fall 
outside the Regulation, as do schemes of arrangement falling within Pt 26 of 
the Companies Act, 2006 …”.  
65. In support of his submissions  in relatio n to the significance of Article 32 , 
counsel for Monsoon relie d on a work by Bork & Van Z wieten namely their 
“Commentary on the European Insolvency Regulat ion” where the authors explain  the 
effect of Article 32 (1) at paras. 32.10 to 32.12 as follows:  
“32.10 Article  32 (1) sub -paragraph 1 provides for the recognition and 
enforcement of decisions by the court whose judgment concerning the opening 
of proceedings is recognised in accordance with Article 19. … However, the 
difference between recognition accordi ng to Article 19 and recognition 
according to Article 32 (1) is practically irrelevant simply because both 
provisions provide for the same legal consequences; that is, an automatic 
recognition.  For instance, certain limitations of creditors rights might e ither 
41 
 
be a legal consequence of the opening of the proceedings according  to the lex 
fori concursus or may result from a (subsequent) court decision.  
Nevertheless, this is irrelevant, as in both cases such effects apply 
automatically and are only limited b y the public policy exception under Article 
33.   
32.11  Article 32 (1) sub -paragraph 1 provides for a few demonstrative 
examples of judgments coming within the scope of these provisions: judgments 
concerning the course and closure of insolvency proceeding s, and those for 
the approval of compensation arrangements.  The scope of Article 32 (1) sub -
paragraph 1, however, is not limited to these cases, although the wording 
‘course and closure’ is extremely broad in any case.  In addition, the exact 
delineation of the scope of Article 32 (1) sub -paragraph 1 is not important in 
practice, as its second sub -paragraph provides for a much broader scope for 
the application of these provisions’ principles on the recognition and 
enforcement of judgment. …  
32.12  The fact  that Article 32 (1) refers to ‘compositions approved by that 
court’ might create the impression that only composition arrangements 
approved by a court are subject to recognition… This, however, would be 
wron g; on the contrary, all such arrangements in the  widest sense need to be 
recognised under the Regulation, irrespective of whether they were approved 
or simply ordered by a court or whether they came into effect on the basis of a 
creditors’ vote or agreement or simply because a reduction of debts is 
prescribed by law; the only relevant issue is whether such an arrangement or 
debt discharge is valid under the applicable lex fori concursus of proceedings  
falling within the scope of the [Regulation]”.  
42 
 
66. Counsel for Monsoon argued that this passage provided st rong support for his 
contention that the CVA and , in particular , the decision of the creditors to approve the 
CVA should be given automatic recognition in Ireland and that , if the landlords had 
wished to challenge the vires  of the meetings of creditors to proceed in the way that 
they did, they ought to have  brought an appropriate challenge before the courts of 
England & Wales.  In this context, counsel referred to the decision of the CJEU in 
Case C -341/04 Eurofood IFSC Ltd  [2006] ECR I -3854 where the CJEU s tressed the 
obligation of mutual trust, in the context of the recognition of a judgment opening 
insolvency proceedings.  In that case, an issue arose as to whether the High Court in 
Ireland or an Italian Court in Parma had jurisdiction to open main insolve ncy 
proceedings in  respect of an Irish registered subsidiary of the Parmalat Group in Italy.  
At the time of the events  in issue , the 2000 Regulation was in place.  It contained, in 
Article 16 (1) a provision in substantially the same terms as Article 19 ( 1) of the 
Regulation under consideration in these proceedings.   
67. In paras. 39 -44 of its judgment, the CJEU stressed the importance of mutual 
recognition .  In doing so, the CJEU referred, with some emphasis, to Recital 22 to the 
2000 Regulation (which is now found in Recital 65 to the Recast Regulation which is 
quoted in para . 72 below).  The CJEU said : 
“39.  As is shown by the 22nd recital of the Regulation, the rule of priority laid 
down in Article 16 (1) …, which provides that insolvency proceedings ope ned 
in one Member State are to be recognised in all the Member States from the 
time that they produce their effects in the State of the opening of proceedings, 
is based on the principle of mutual trust.   
40.  It is that mutual trust which has enabled a co mpulsory system of 
jurisdiction to be established, which all the courts within the purview of the 
43 
 
[Brussels] Convention are required to respect, and as a corollary the waiver 
by those States of the right to apply their internal rules and recognition and 
enforcement of foreign judgments in favour of a simplified mechanism for the 
recognition and enforcement of decisions handed down in the context of 
insolvency proceedings ….  
41.  It is inherent in that principle of mutual trust that the court of a Member 
State hearing an application for the opening of main insolvency proceedings 
check that it has jurisdiction having regard to Article 3 (1) of the Regulation, 
i.e. examine whether the centre of the debtor’s main interests is situated in that 
Member State.  In t hat regard, it should be emphasised that such an 
examination must take place in such a way as to comply with the essential 
procedural guarantees required for a fa ir legal process….  
42.  In return, as the 22nd recital of the Regulation makes clear, the prin ciple 
of mutual trust requires that the courts of the other Member States recognise 
the decision opening main insolvency proceedings, without being able to 
review the assessment made by the first court as to its jurisdiction.   
43.  If an interested party,  taking the view that the centre of the debtor’s main 
interest is situated in a Member State other than that in which the main 
insolvency proceedings were opened, wishes to challenge the jurisdiction 
assumed by the court which opened those proceedings, it may use, before the 
courts Member State in which they were opened, the remedies prescribed by 
the national law of that Member State against the opening decision.   
44. The answer to the … question must therefore be that, on a proper 
interpretation of the f irst subparagraph of Article 16(1) of the Regulation, the 
main insolvency proceedings opened by a court of a Member State must be 
44 
 
recognised by the courts of the other Member States, without the latter being 
able to review the jurisdiction of  the court of the opening State”.  
68. Counsel for Monsoon drew attention, in particular, to the terms of paras. 43 
and 44 of the judgment and he argued that, by analogy, a similar approach must be 
taken to the composition embodied in the CVA in the context of Article 32 (1)  of the 
Regulation.  As the extract from Bork & Van Zwieten (quoted in para. 65 above) 
suggests, the difference between recognition according to Article 19 (formerly Article 
16 in the 2000 Regulation) and recognition according to Article 32 (1) is “practic ally 
irrelevant simply because both provisions provide for the same legal consequences; 
that is, an automatic recognition”.   
69. In response, counsel for the landlords submitted that the decision in Eurofood 
is relevant only to judgments opening main insolven cy proceedings and  in the specific 
context of the automatic recognition provisions contained in Article 19.  In particular, 
he highlighted that, before a judgment can be made opening main insolvency 
proceedings,  the court in question must examine, of its own motion, whether the 
centre of main interests of the insolvent debtor is within its jurisdiction.  He stressed 
that, in contrast, subsequent decisions of the “court” which opened the  main 
insolvency proceeding s (which would include a decision to exercise the jurisdiction 
conferred by Article 11  (2)) do not contain any equivalent requirement . He noted that, 
in Eurofood , the CJEU expressly relied on Article 4 of the Regulation  which provides  
that the court which is requested to open  main  insolvency proceedings is required, of 
its own motion, to examine whether it has jurisdiction pursuant to Article 3.   
70. Counsel for the landlords also suggested, by reference to Recital 67 to the 
Regulation, that it creates an exception to the rule of automatic recognition.  I do not 
accept this submission.  As counsel for Monsoon correctly submitted, it is clear from 
45 
 
the c ontext of Recital s 65 to 68 that the exception envisaged by Recital 67 is an 
exception to the general rule referred to in Recital 66 (namely that the law of the 
Member State of the opening of proceedings should be applicable  to the insolvency 
proceedings ).  When Recitals 65 to 68 are read in sequence and in context, I believe 
that the submission made by counsel for Monsoon is correct.  Recital 65 (quoted in 
para. 72 below) contains the crucially im portant principle  that the recognition of 
judgments delivere d by the courts of the Member States under the Regulation should 
be based on the principle of mutual trust.  It is of some significance that t his principle 
is not described in Recital 65 as a “rule”.  The first  reference to a “rule” in this 
context is in Recital 66 . The latter sets out the gene ral requirement  as to the 
application of the law of the State of the opening  of proceedings.  In my view, it is 
very importan t to note that, here, in contra distinction to Recital 65, the requirement 
that the law of th e Member State of the opening of proceedings should be applied is 
expressly described as a “rule on conflict of laws”.  It is true  that Recital 67 
recognises that automatic recognition of insolvency proceedings to which the law of 
the State of the opening of proceedings normally  applies may interfere with the rules 
under which certain transactions are carried out in other Member States.  Counsel for 
the landlords argued, on this basis, that the exceptions subsequently described in 
Recital 67 must relate to the principle of automatic recognition.  I do not believe that 
this argument is correct.  On the contrary, it appears to me that the first sentence of 
Recital 67 does no more than recognise that, if Recital 65 and 66 stood on their own, 
this would have the  capacity to interfere with the rules under which transactions are 
carried out in other Member States.  This is entirely logical.  As noted above, 
Regulation 65 requires that judgments should be recognised on the basis of mutual 
trust.  In turn, t he rule e mbodied in Recital 66 envisages that, unless otherwise stated, 
46 
 
the law of the Member State of the opening proceedings should be applicable.  If 
those two principles were applied  without exception , there would be no scope, at any 
stage, for the application of the law of any other Member State (save in the context of 
the public policy provisions discussed further below).  In order to overcome this 
difficulty, Recital 67 provides that, in order to pr otect legitimate expectations and the 
certainty of transactions in other Member States, provision should be made for a 
number of exceptions to the “general rule ”. For the reasons outlined above, i n my 
view, this is clearly a reference to the general rule envisaged by Recital 66  that the 
law of the Member State of the opening of proceedings should be applicable.   
71. This conclusion is confirmed by a consideration of Recital 68 which expressly 
refers to one of the exceptions to the general rule  as to the applic ation of the law of 
the Member State of the opening of proceedings - namely rights in rem .  Recital 68 
therefore provides that, in the case of rights in rem , they should normally be 
determined according to the lex situs.  They are accordingly an exception to the 
general rule envisaged by Recital 66.   
72. That said, the reference in Recital 67 to the automatic recognition of 
insolvency proceedings is  nonetheless important.  It is consistent with Article 19 and 
Article 32 which, by their terms, expressly provide  for automatic recognition.  This is 
strongly reinforced by a consideration of Recital 65 which states:  
“This Regulation should provide for the immediate recognition of judgments 
concerning the opening, conduct and closure of insolvency proceedings which 
fall within its scope, and of judgments handed down in direct connection with 
such insolvency proceedings. Automatic recognition should therefore mean 
that the effects attributed to the proceedings by the law of the Member State in 
which the proceedings wer e opened extend to all other Member States. The 
47 
 
recognition of judgments delivered by the courts of the Member States should 
be based on the principle of mutual trust. To that end, grounds for non -
recognition should be reduced to the minimum necessary. Thi s is also the 
basis on which any dispute should be resolved where the courts of two 
Member States both claim competence to open the main insolvency 
proceedings. The decision of the first court to open proceedings should be 
recognised in the other Member St ates without those Member States having 
the power to s crutinise that court's decision”.  
73. While Recital 65 places specific emphasis on decisions to open proceedings, it 
is clear that the first part of the Recital is concerned with automatic recognition of 
judgments concerned not only with the opening of proceedings but  also the conduct 
and closure of proceedings and of judgments handed down in direct connection with 
such proceedings.  Recital 65 therefore extends to decisions such as that of the 
creditors her e to approve the CVA.   
74. However, counsel for the landlords not only argues that a distinction should be 
made between the recognition of judgments opening proceedings and other 
judgments, but he also submits that there is, in fact, no judgment by any “court ” 
exercising the new jurisdiction available under Article 11 (2).  For the purposes of this 
argument, h e reiterated the s ubmission (summarised in para 53 above ) that Article 11 
(2) is not  an automatic jurisdiction but depends upon the satisfaction of what he 
described as the threshold conditions contained in paras. (a) and (b).  He stressed that 
a court  in which  the main insolvency proceedings are opened (in this case the  CVA) 
must act, under Article 11 (2) as a proxy f or an Irish court.  He argued  that, as a 
matter of Irish law, the rights of the landlords could not have abrogated  in the manner 
provided for in the CVA.  As noted above, the case made by the landlords is that 
48 
 
examinership is the closest procedure availabl e in this jurisdiction to a CVA and, 
under the 2014 Act, an arrangement  with creditors  in an examinership could not 
involve the imposition of a reduction in the amount of any rent reserved under a lease 
or a requirement that the lessor should not (in the e vent of non -payment of rent or a 
failure to comply with any other covenant or obligation of the lease) exercise any 
right to recover possession of the property the subject of the lease.  He therefore 
argued that one of the essential preconditions to the op eration of Article 11 (2) was 
not met  in this case .  Moreover, he argued that there is no material to be found 
anywhere in the CVA proposals which suggest that the creditors were ever asked to 
exercise any jurisdiction or competence under Article 11 (2).  He submitted that the 
only competence which they assumed under the CVA proposals is an English law 
competence under Article 7.  He therefore argued that there could be no question of 
the mutual trust principle applying to the “ decision” embodied in the CVA  insofar as 
Article 11 is concerned.   
75. In the ci rcumstances described in para. 74 above, counsel for the landlords 
argued that Article 11 (2) had never been applied  as part of the CVA process .  He 
accordingly  argued that there is no judgment before the cou rt on the Article 11 issue 
which requires to be recognised here. He submitted that, in circumstances where 
Article 11 (2)  had not been applied, Article 11 (1) continues to apply such that the 
effect of the insolvency proceedings on  the Cork and Dublin leas es remains governed 
solely by the law of Ireland.     
76. Counsel for the landlord also argued that, even if one were to treat the CVA 
proposals as a judgment exercising what he described as a “mistaken competence 
under Article 11” (which he suggested  could  not be the case because the creditors 
were never told anything about Article 11) it was impossible to conclude , even as a 
49 
 
matter of English law, that any aspect of the CVA could be characterised as  a 
judgment arrived at under Article 11  (2).  In simple terms , his argumen t was that, 
under Article 11  which has direct effect in the United Kingdom,  English law must 
apply Irish law to the question as to the effects of the CVA on the Cork and Dublin 
leases.  Counsel submitted that this was supported by the evidence  given b y the 
experts as to English law.   
77. In the context of this submission, counsel for the landlords sought to rely on  
the “extension principle” under which, he submitted, the court has to decide whether 
or not there is before it a judgment capable of b eing recognised in Ireland.  In 
referring to the extension principle, counsel made clear that he was referring to the 
manner in which the effect of a judgment in one Member State is extended to the 
whole territory covered by the Regulation.  This was first articulated in the Virgos 
Schmi dt report at para. 143 where the authors, in the course  of their commentary on 
Article 17 of the Convention (now Article 20 of the Regulation) said:  
“Article 17 lays down a model of recognition based on the extension of  the 
effects of the judgment in a Contracting State to the whole territory covered by 
the Convention.  Proceedings opened in another Contracting State will not, as 
regards their effects, be equated with national proceedings but will be 
recognised in other Contracting State s with the same effects attributed to them 
by the law of the State of the opening (= ‘extension model’).   
The law of the State of the opening (and not the law of the requested State) 
shall be applicable to determine those effects.  This s hall apply to all the 
effects of the proceedings in another Contracting State , both procedural and 
substantive …. The substantive effects are included by virtue of the general 
applicability which the Convention attributes to the law of the state of the 
50 
 
opening … and they are therefore subject to the same exceptions as are 
provided for by the Convention in respect of that law …”.  
78. In invoking the extension principle, c ounsel for the landlords  submitted that, in 
accordance with well-established  principles of EU law, the Regulation has direct 
effect in all parts of the United Kingdom and accordingly, insofar as the jurisdiction 
of England & Wales is concerned, forms part of English law.  On that basis, he  argued 
that, as a matter of English law, the CVA could n ot have the effect of interfering with 
the landlords’ rights under the Cork and Dublin leases.  His contention was that 
Article 11 (2) forms a directly applicable provision of English law which had not been 
applied during the CVA process.  The failure to e xercise competence under Article 11 
(2) has the effect (so counsel argued) t hat, as a matter of English law, the CVA could 
not, in circumstances where the creditors never purported to exercise a competence 
under Article 11 (2), have the lawful effect of mo difying the leases in the manner set 
out in the terms of the CVA.  Counsel argued that , accordingly, under the extension  
principle , the CVA (insofar as it purports to adversely affect the landlord’s rights 
under the Cork and Dublin leases) could never be e ffective and recognised in Ireland.  
It would only be required to be recognised in Ireland, under the extension principle, 
where the CVA was effective, as a matter of English law, to modify the leases.  
Counsel suggested that this proposition was supported  by the evidence given by Mr. 
Briggs (the English law expert who provided affidavit evidence and reports on behalf 
of Monsoon) where, in his first report, Mr. Briggs note d the decision of Norris J. in 
Discovery (Northampton) Ltd v. Debenhams Retail Ltd  [2020] EWHC 260 (Ch) .  In 
that case, Norris J.  deleted certain provisions of a CVA which  he held were , as a 
matter of English law,  unlawful notwithstanding that the CVA had been approved by 
the requisite majority of creditors.  Counsel for the landlords, by a nalogy, argued that 
51 
 
any provisions of the CVA in this case which are contrary to English law, should 
likewise be treated as though they had been deleted from the CVA.  Counsel 
submitted that the clauses of the CVA that were inconsistent with Irish law must  also 
be treated as contrary to English law given the effect of Article 11 in English law.   
79. Counsel also drew attention to what was said by Mr. Smith Q.C. in paras. 47 
to 48 of his first report in which he suggested that the relevant parts of the CVA whic h 
exceed the jurisdiction provided for in Article 11 (2) are invalid and ineffective.  In 
those paragraphs, Mr. Smith also said that a challenge to the CVA in the English 
courts on the grounds that the creditors meeting had no jurisdiction under Article 11  
to terminate or modify contracts relating to the use of a moveable property located in 
Ireland would not fall within the concept of unfair prejudice or material irregularity 
under s. 6 of the UK Insolvency Act.  Mr. Smith added:  
“…to the extent that such a challenge was brought before the English courts, 
it would be brought by way of a claim or application for a declaration that the 
relevant parts of the CVA exceed the jurisdiction provided for by Article 11 
and to that extent are invalid and ineffective.  I should add, for the avoidance 
of doubt, that I do not consider that as a matter of English law the English 
court would have exclusive jurisdiction in relation to such a claim or 
application for a declaration.  In particular, there is in my opinion as a matter 
of English law no reason why such a claim or application would not be 
brought in the forum where the relevant real property was situate”.  
80. There was a significant difference of opinion between Mr. Smith and Mr. 
Briggs (who provided a witness statement and reports on behalf of Monsoon) as to 
whether a challenge could be brought in  the courts of England & Wales under s. 6 of 
the UK Insolvency Act or under the ordinary jurisdiction of the courts of England & 
52 
 
Wales.  While Mr. Briggs had initially  suggested that only declaratory proceedings 
could  be brought under the ordinary jurisdiction of the English courts, he 
subsequently concluded that it would have been open to the landlords to challenge the 
CVA under s. 6 of the UK Insolvency Act  and he lat er expressed the view that a s. 6 
application was the only route available to the landlords by which to mount a 
challenge to the CVA  on the ground that the relevant parts of the CVA exceed the 
jurisdiction provided under Article 11 .  He further expressed t he opinion that the 
failure of the landlords to challenge the CVA under s. 6 now has the consequence that 
the CVA is binding upon the landlords under the “statutory contract” principle 
(described in paras. 24 to 26 above) under which even dissenti ents and non-voting 
creditors are bound by the outcome of a majority vote in favour of a CVA.   
The effect of the obligation imposed by Article 32  to recognise the CVA  
81. While I fully acknowledge the ingenuity of the argument made by counsel on 
behalf of the landlord s, I believe it is very difficult to reconcile his argument with the 
express requirement placed on this court under Article 32.  As noted in para. 64 
above, I have come to the conclusion that the approval of the CVA constitutes a 
judgment “handed down by a  court whose judgment concerning the opening of 
proceedings is recognised in accordance with Article 19” and which concerns a 
composition approved by that “court” such that it falls within Article 32.1 of the 
Regulation.  In accordance with the obligation of mutual trust, it is therefore a 
judgment which, subject to the public policy exception contained in Article 33 
(addressed below) must be recognised in all of the Member States.  While I fully 
accept that the judgment of the CJEU in Eurofood  was concerne d with recognition of 
a judgment opening insolvency proceedings, the judgment makes very clear that the 
obligation of mutual trust requires the courts of the Member States to recognise and 
53 
 
give effect to the judgment of the court which opened the main inso lvency 
proceedings.  I recognise that there are elements of the Eurofood decision which can 
be distinguished.  In particular, I recognise and accept that, in its judgment in that 
case, the CJEU referred to the obligation which is specifically placed on the  court 
proposing to open main insolvency proceedings to  examine, on its own motion, 
whether it has jurisdiction to do so.  There is no equivalent requirement in the case of 
judgments which fall within the ambit of Article 32.  I also appreciate that, in th e case 
of a judgment opening main proceedings, Article 5 expressly provides that a creditor 
must have the right to challenge that decision in the courts of the jurisdiction in which 
main insolvency proceedings were opened.  There is no equivalent provision  in the 
case of a judgment falling within the ambit of Article 32.  While I acknowledge these 
points of distinction, I am not persuaded that they allow me to conclude that I am at 
liberty to look behind a judgment of a court of another Member State and to consider 
whether, as a matter of the law of that Member State, the judgment is or is not 
effective.  That seems to me to be entirely contrary to the obligation of recognition 
imposed by Article 32.  The present case illustrates the difficulties that would arise if 
a court were to embark on an inquiry of that kind.  In this case, in the respective 
opinions presented by Mr. Smith on the one hand (on behalf of the landlords) and Mr. 
Briggs, on the other hand, on behalf of Monsoon, there has been a lively debat e as to 
various aspects of English law.  Where such disputes arise, that places the court in the 
invidious position of having to decide for itself what is the true effect of the law of the 
jurisdiction in which main insolvency proceedings were issued.  Suc h an exercise 
seems to me to be antithetical to the obligation imposed under Article 32  to recognise 
the judgment with no further formalities .   
54 
 
82. I must bear in mind that, as Bork & Van Zwieten observe , in para. 32.10 of 
their commentary (quote d in para. 65  above) the difference between recognitio n 
according to Article 19 and  recognition according to Article 32 (1) is practically 
irrelevant “simply because both provisions provide for the same legal consequences; 
that is, an automatic recognition”.  The obser vation made by Bork & Van Zwieten is 
consistent with the plain words of Article 32 (1).  The obligation of recognition 
imposed by Article 32 (1) is in very similar terms to  Article 20 (1)  dealing with 
judgments opening main insolvency proceedings .  The req uirement is to recognise the 
judgment.  Article 20 provides that such a  judgment will “with no further formalities 
produce the same effects in any other Member State as under the law of the State of 
the opening of proceedings, unless this Regulation provid es otherwise…”.  In the case 
of Article 32 (1), the judgment is to be recognised “with no further formalities”.  The 
obligation to recognise the latter is also  reinforced by the requirement also expressly 
contained in Article 32 (1) that judgments within t he ambit of Article 32 (1) are to be 
enforced in accordance with Articles 39 to 44 and 47 to 57 of the Brussels I Recast 
Regulation.   
83. Furthermore, it seems to me to be a necessary consequence of the obligation to 
recognise a judgment of a court of another  Member State with no further formalities, 
that any challenge to be made to the validity of that judgment must be made in the 
jurisdiction in which it was given.  Otherwise, the obligation to recognise the 
judgment would be deprived of its intended effect.   Rather than giving recognition to 
the judgment without fo rmalities, it would involve this court undertaking an inquiry as 
to the true effect of the judgment in question according to the law of the State in 
which it was given.  In my view, that would entirely undermine the object and effect 
of Article 32.   
55 
 
84. In my view, the position under the Regulation is the same as the position 
which exists under the Brussels I Recast Regulation.  Article 32.1 expressly 
incorporates specific aspects of the Brussels I regime.  It is clear from the case law of 
the CJEU that a  perceived failure to apply national law or EU law is not a ground on 
which to refuse recognition.  In the context of the earlier Brussels Convention, the 
CJEU stated as follows in Case C -38/98 Renault v. Maxicar  [2000] ECR I -2973 at 
para. 33:  
“The court o f the State in which enforcement is sought cannot, without 
undermining the aim of the Convention, refuse recognition of a decision 
emanating from another Contracting State solely on the ground that it 
considers that National or Community law was misapplied  in that decision.  
On the contrary, it must be considered whether, in such cases, the system of 
legal remedies in each Contracting State, together with the preliminary ruling 
procedure provided for in Article 177 of the Treaty, affords a sufficient 
guaran tee to individuals”.   
85. This approach is strongly reinforced by the provisions of Article 52 of the 
Brussels I Recast Regulation (which is expressly applied by Article 32 (1) of the 
Recast Insolvency Regulation).  Article 52 of the Brussels I Recast Regulat ion 
provides that “under no circumstances ” may a judgment given in a Member State be 
reviewed as to its substance in another Member State.  I note, however, that in Goode , 
it is suggested by the author at para. 15 -34 that:  
“In exceptional cases the court o f a Member State may be entitled to disregard 
a judgment of a court of another Member State.  Where, for example, the court 
of the other State has assumed jurisdiction despite an express finding that the 
debtor’s COMI is not situated within that State, it must, it is thought, be open 
56 
 
to a court entertaining subsequent proceedings elsewhere to disregard the 
earlier decision as ultra vires the Regulation on its face….”  
86. No authority for that proposition is cited by the author of Goode.  Nonetheless, 
it might b e said that, in the present case, in light of the letter from Shoosmith s quoted 
in para. 18 above that a parallel situation arises here.  In that letter, Shoosmith s clearly 
suggested that Article 11 was trumped by Article 7 (2 ) and  gave the clear impressio n 
that the meeting of creditors convened to consider and vote on the CVA would 
proceed on that basis.  There is nothing in the CVA itself to suggest otherwise.  In 
those circumstances, an argument arises as to whether the opinion expressed by the 
author of  Goode gives rise to an arguable basis to suggest that the decision of the 
creditors to approve the CVA is ultra vires  the Regulation on its face.  Obviously, if 
that was a permissible course to take, it would not involve any review of English law 
and woul d not necessarily give rise to the same level of concern as that expressed by 
me in para. 81 above.  That said, in circumstances where no authority for the 
proposition is given, and where no case to that effect has been brought to my 
attention, I do not be lieve that I could safely conclude that such an approach could 
lawfully be taken by this court . In such circumstances, it might be suggested that a 
reference should be made to the CJEU for definitive guidance on the issue.  I find it 
difficult to see any p roper basis to do so. Moreover, b efore considering whether a 
reference might be appropriate, I would need to consider whether EU law is already 
clear on the issue.  In this context, notwithstanding the great respect in which the 
current author of Goode  is held, the approach taken by the CJEU in the Maxicar  case 
strongly suggests that the statement made by the author is incorrect and should be 
discounted.  In addition, s uch a reference would only be appropriate, of course, if a 
decision on that issue was  necessary in order to reach a decision on the proceedings 
57 
 
before me.  Depending upon the view I take in relation to the next issue to be decided 
(relating to the public policy provisions contained in Article 33) it may  not be 
necessary for me to give any further consideration as to whether there is any sufficient 
basis to make  such a reference.  It is therefore appropriate that I should first address 
the public policy argument made on behalf of the landlords.  
The p ublic policy  exception under Article 33  
87. Article 33, by way of an exception to the rule of automatic recognition 
contained in Article 32 (and the equivalent rules relating to judgments opening 
insolvency proceedings contained  in Articles 19 and 20) , envisages that a Member 
State may refuse to recog nise insolvency proceedings or to enforce a judgment where, 
to do so, would be very clearly contrary to the public policy of that Member State.  
Article 33 provides as follows:  
 “Any Member State may refuse to recognise insolvency proceedings opened in 
another Member State or to enforce a judgment handed down in the context of 
such proceedings where the effects of such recognition or enforcement would 
be manifestly contrary to that State’s public policy, in particular its 
fundamental principles or the const itutional rights and liberties of the 
individual”.  
88. It is clear from the case law of the CJEU and from the decision of Finlay 
Geoghegan J. in Fairfield S entry Ltd (in liquidation) v. Citco Bank Nederland  [2012] 
IEHC 81 that Article 33 can be invoked only in  very exceptional circumstances.  As 
the CJEU made clear in Case C -7/98 Krombach v. Bambersk i [2000] ECR I - 01935 
that recourse to Article 33 can be envisaged “only where recognition or enforcement 
of the judgment … would be at variance to an unacceptable  degree with the legal 
order of the State in which enforcement is sought inasmuch as it would infringe a 
58 
 
fundamental principle. ”  The CJEU emphasised in that case that the infringement of 
the national fundamental principle of the recognising State would ha ve to constitute a 
“manifest breach of a rule of law regarded as essential in the legal order” of the 
recognising State.   
89. Bork & Mangano, at paras. 5.42 to 5.54, provide a very helpful commentary 
on Article 33.  In the first place, consistent with the cas e law of the CJEU (both with 
regard to the Regulation and the Brussels I regime) Bork & Mangano highlight that 
Article 33 is to be applied restrictively.  At para. 5.43 they observe:  
 “Art. 33 constitutes the only basis upon which recognition can be refuse d…. 
The Regulation operates under the assumption that recognition is desirable 
and is based upon the principles of mutual trust; therefore, the scope for 
refusal of recognition should be as small as possible.  Thus, the public policy 
exception is subject t o strict interpretation  and should only be invoked in 
extreme circumstances ; this can be derived from the wording of Art. 33, as it 
requires the effects of recognition to be manifestly contrary to the recognising 
Member State’s public policy” (emphasis in original)  
90. The CJEU has emphasised  that Article 33 is reserved for exceptio nal cases.  In 
Eurofood, the CJEU, in the context of the 2000 Regulation (in which Article 26 
corresponded with Article 33 of the Regulation) emphasised that the same approach 
should be taken in the context of the public policy exception to that previously  taken 
in the case law relating to the public policy exception contained in Article 27 (1) of 
the Brussels I Convention (as it then was).  At paras. 61 to 64 of its judgment, the 
CJEU said:  
“61.  Whilst the 22nd recital of the Regulation infers from the pr inciple of 
mutual trust that 'grounds for non -recognition should be reduced to the 
59 
 
minimum necessary', Article 26 provides that a Member State may refuse 
to recognise insolvency proceedings opened in another Member State 
where the effects of such recogniti on would be manifestly contrary to 
that State's public policy, in particular its fundamental principles or the 
constitutional rights and liberties of the individual.  
62.  In the context of the Brussels Convention, the Court … has held that, 
since it const itutes an obstacle to the achievement of one of the 
fundamental aims of that Convention, namely to facilitate the free 
movement of judgments, recourse to the public policy clause contained 
in Article 27, point 1, of the Convention is reserved for exception al cases 
(Case C -7/98 Krombach [2000] ECR I -1935, paragraphs 19 and 21).  
63.   … the courts of a Contracting State may have recourse to that concept 
for the purpose of refusing recognition to a judgment emanating from a 
court in another Contracting State,  the Court … had held, in the context 
of the Brussels Convention, that recourse to that clause can be 
envisaged only where recognition or enforcement of the judgment 
delivered in another Contracting State would be at variance to an 
unacceptable degree with  the legal order of the State in which 
enforcement is sought inasmuch as it infringes a fundamental principle. 
The infringement would have to constitute a manifest breach of a rule of 
law regarded as essential in the legal order of the State in which 
enfor cement is sought or of a right recognised as being fundamental 
within that legal order (Krombach, paragraphs 23 and 37).  
64.  That case -law is transposable to the interpretation of Article 26 of the 
Regulation”.  
60 
 
91. Bork & Mangano draw attention to the lack of  detail in Article 33 as to the 
nature of public policy violations that will be regarded as falling within its ambit.  
However, they suggest that it is possible to identify a number of situations which will 
not attract its application.  Thus, for example, they observe, at para. 5.48 that “no 
violation of public policy is to be assumed if a court has wrongfully asserted 
jurisdiction”.  They explain that this follows from the principle of mutual trust.  They 
say: 
 “Since the principle of mutual trust prohibits any Member State from 
reviewing a claim to have jurisdiction made by the court of another Member 
State, the competence of a court cannot constitute part of the fundamental 
policies of Member States.  Therefore , jurisdiction of the court cannot be 
scrutinised for the purposes of Art. 33.  Whether this principle also applies to 
cases in which jurisdiction has been obtained through deception or through 
manoeuvres to shift the COMI to a more favourable Member State  … is 
debatable”.  
92. The same  point is made by Bork & Van Zw ieten at para. 33.14 where they 
say: 
 “… the public policy clause must not be abused in order to second -guess a 
court’s decision relating to its jurisdiction to open main proceedings.  In 
particular,  as is the case with the Brussels I Regulation, the mere fact that the 
court of another Member State is of the opinion that the decision of the court 
having opened such main proceedings was incorrect with respect to 
jurisdiction is no ground for the refusa l of the recognition of the decision 
opening the proceedings according  to Article 33”.  
61 
 
93. Counsel for the landlords argued that the decision to approve the CVA without 
applying Irish law constituted a “wilful and blatant disregard of Irish law” such as to 
attract the application of the public policy exceptio n.  In substance, this was a rep eat 
of the argument previously made by counsel that there had been a failure  in the course 
of the CVA process  to apply Irish law as required by Article 11 (2).  Having regard to 
the obligation of mutual trust (discussed at length in the previous section of this 
judgment) I do not believe that this is a n argument which can be pursued under 
Article 33.  Bork & Mangano support this conclusion.  As Bork & Mangano say at 
para. 5.49:  
 “It follows from the … principle of mutual trust that authorities in the 
recognising Member State cannot invoke the public pol icy exception in order 
to scrutinise the judgment in question on its merits.  Since the public policy 
exception requires that the effects of recognition violate the recognising 
Member State’s fundamental principles, it is irrelevant whether or not the 
issuing court correctly applied the rules of the [Regulation] or the applicable 
national insolvency law.  Consequently, the ability to undertake a revision 
au fond is not granted by Art. 33”.  (emphasis added).  
94. Bork & Mangano helpfully  explain the circumstances  in which Article 33 may 
properly arise.  At para. 5.50, they say:  
 “Infringement of a Member State’s public policy seems possible only in cases 
in which the effects of the judgment originate from a scheme of insolvency law 
other than that of the recognisi ng Member State.  Since the Member States 
agreed upon the provisions of the [Regulation], it seems highly unlikely that 
effects resulting from the application of the [Regulation] would contravene 
any Member State’s public policy.  Likewise, any effects res ulting from the 
62 
 
application of a Member State’s own insolvency law cannot run contrary to 
that Member State’s public policy.  A breach of public policy of the 
recognising Member State may therefore be  assumed only when the effect in  
question stems from for eign national insolvency law and when this effect 
differs from effects invoked by domestic insolvency law of the recognising 
Member State.  This difference must relate to a fundamental principle of the 
recognising Member State”.  
95. Bork & Mangano also explain , at para. 5.51, that it follows from the wording 
of Article 33, that the public policy of a Member State encompasses both the rights 
and liberties of the individual (which they describe as “subjective rights” ) as well as 
objective values namely fundamenta l principles.  Because Article 33 is not limited in 
its application to the rights and liberties of the individual, and expressly extends to 
fundamental principles, Bork & Mangano express the view that the use of the public 
policy exception to deny recognit ion “does not necessarily require infringement of the 
rights of participants in the insolvency proceedings .  Authorities of the recognising 
State are directed to test ex officio whether the effects of the judgment constituted an 
infringement of public poli cy of the recognising State”.  
96. As the decision in the Eurofood case illustrates, the public policy exception 
contained in Article 33 may be invoked not only in the context of the substantive law 
of a Member State but also in the context of the procedural ri ghts of participants in the 
insolvency proceedings.  Thus, as Bork & Mangano observe, at para. 5.52, it may be 
necessary to examine whether the judgment in question is the result of a procedure 
which does not comply with the fundamental procedural guarante es of the recognising 
Member State.  At para. 5.53, the authors suggest that infringement of the procedural 
public policy of a Member State may arise:  
63 
 
 “… if participants are not informed of the opening of proceedings , do not 
receive documents which are crucial to proceedings , are not heard, and/or are 
denied participation within proceedings .  However, we must bear in mind that 
insolvency proceedings involve  a number of participants with diverse 
(procedural) interests and rights regarding the different judgments handed 
down in the course of the proceedings .  While it seems obvious that the debtor 
must be heard, prior to the judgment opening insolvency proceedings the same 
might not be said regarding creditors.  Furtherm ore, the right to a fair trial 
may be guaranteed in different ways by different Member States.  The urgency 
of certain judgments, such as judgments concerning preservation measures, 
may justify the right to be heard simply constituting a route for legal ap peal.  
To determine whether a breach of public policy should be assumed, it is 
therefore necessary to define whose procedural rights are in question, which 
procedural rights should have been respected and whether those rights were 
denied in the course of p roceedings.  Even if procedural rights which should 
have been respected were denied during proceedings , Article 34 (2) of the 
Brussels I Regulation suggests that no violation of public policy is to be 
assumed if the participant in question failed to challe nge the judgment when it 
was possible for him to do so”.  
97. Bork & Van Zwieten also suggest that, in the context of procedural fairness, it 
is sufficient that there is an ability on the part of the objecting party to appeal or seek 
judicial review.  At para. 33.14, they suggest:  
 “… moreover, the right to be heard need not be granted to all creditors in 
advance.  It is sufficient that a party can raise the possibility of recourse to 
64 
 
judicial review of the decision to open main proceedings according to Article 
5”. 
The case made by the Irish landlords under Article 33  
98. The above  observations are very relevant in the context of the argument s made 
by counsel on behalf of the landlords here.  In this case, in addition to the argument 
mentioned in para . 93 above, coun sel for the landlords also makes two additional 
arguments (one relating to the substantive law of Ireland and the other relating to 
procedural fairness):  
(a) In the first place, counsel argues that the “decision” to approve the CVA is 
contrary to fundamental principles and the constitutional rights and liberties of 
the Irish landlords insofar as it purports to modify Irish lease obligations 
which are constitutionally protected as property rights under Article 40.3 of 
the Constitution without any judicial inter vention or hearing of any kind; and  
(b) Secondly, counsel argues that the procedure adopted in this case was 
inherently unfair in that the “decision” adopted to approve the CVA was 
rendered by a single vote of a meeting of creditors which did not admit of 
anything other than a creditor voting yes or no.  No aspect of the process 
involved a consideration of individual rights and interests of any individual 
creditor and in particular of the individual rights of the landlords under Irish 
law which ought to have be en respected under Article 11  of the Regulation.  In 
response  to this argument, counsel for Monsoon relies strongly on the 
availability, under English law, of a right to apply to the English courts  under 
s. 6 of the UK Insolvency Act .   
65 
 
The procedural fair ness issue  
99. In my view, it makes sense to address the procedural fairness argument first.  
If the landlords succeed in relation to the procedural fairness argument, it may be 
wholly unnecessary to consider the argument based on substantive Irish constitutional 
law.  It seems to m e that the substantive constitutional law argument should only be 
addressed if absolutely necessary.  My concern is that , if I were to hold that the 
outcome of the CVA process infringes  substantive Irish constitutional law, this could 
have significant repercussions for the enforcement and recognition of other CVAs in 
analogous circumstances.  In saying that, I do not wish in any way to suggest that the 
outcome of the CVA process is necessarily infirm  based on Irish substantive 
constitutional law principles. I am very conscious of the case made by Monsoon that 
the landlords will fare better under the CVA than in a liquidation.  Nonetheless, I 
believe it is preferable to avoid addressing any issue as to  substantive constitutional 
law (as opposed to constitutional law relating to procedural fairness) unless absolutely 
necessary to do so.  In this context , I am mindful that, if  a determination is reached on 
procedural fairness, any defect in the procedure adopted in the CVA process here can, 
I am sure, be readily remedied in any future CVA process in the United Kingdom 
involving Irish leases.   
100. In my view, the procedural fairness argument requires consideration of two 
interrelated issues namely:  
(a) Whether cou nsel for the landlords  is correct in suggesting that there was 
a sufficiently serious breach of procedural fairness to potentially engage 
the application of Article 33; and  
(b) If so, whether counsel for Monsoon is correct that the availability of a 
court cha llenge is sufficient to cure any unfairness at the level of the 
CVA process.   
66 
 
101. In the context of the public policy issue, questions of procedural fai rness 
require some understanding  of the nature of the landlords’ substantive rights and the 
protection affo rded to them under the Constitution .  The fundamental rights 
recognised by the Constitution are  set out in Articles 40 to 44 of the Constitution.  
Article 40.3 and Article 43 are of particular relevance in the present context.  Article 
40.3 provides as fol lows:  
“3    1. The State guarantees in its laws to respect, and, as far as practicable, 
by its laws to defend and vindicate the personal rights of the citizen.  
2. The State shall, in particular, by its laws protect as best it may from 
unjust attack and, in  the case of injustice done, vindicate the life, person, 
good name, and p roperty rights of every citizen”.  
102. This guarantee to protect property rights from unjust attack must be read in 
conjunction with Article 43 which, insofar as relevant, provides as foll ows:  
 “1.1  The State acknowledges that man, in virtue of his rational being, has 
the natural right, antecedent to positive law, to the priv ate ownership of 
external goods…”.  
103. The provisions of Article 40.3 and 43 very clearly identify the extent to which 
the protection of property rights is enshrined in  the Constitution.  There is no doubt 
that the rights of a lessor constitute a species of property rights which is protected by 
the Constitution.  This is il lustrated by the approach taken  by Hogan J. (as he then 
was) in Albion  Properties Ltd v. Moonblast Ltd  [2011] 3 I.R. 563 at p.p. 570 -571 
where , in the context of a landlord’s right to pursue a defaulting tenant,  he said:  
 “…I entirely agree with the submission of counsel for the plaintiff that it 
would be pointless to require his client to issue separate …  proceedings ….  A 
requirement of this kind would simply represent legal formalism at its worst. 
67 
 
Any supposed jurisdictional bar which prevented the court from granting 
injunctive relief in an appropriate  case to require a defaulting  tenant to yield 
up possession of a commercial tenancy would be at odds with the duty 
imposed on the courts by Article 40.3.2 of the Constitution to ensure that the 
property rights of the plaintiff are appropriately vindicated in the case of 
injustice done. The courts are under a clear constitutional duty to ensure that 
the remedies available to protect and vindicate these rights are real and 
effective  ….  For good measure, a similar obligation is impose d on the State 
by article 13 of the European Convention on Human Rights 1950…” . 
104. The extent to which the property rights of lessors are protected is also reflected 
in the provisions of s. 544 (1) of the 2014 Act ( discussed in para. 55 above).  In 
enacting s . 544, t he legislature was clearly concerned to ensure that a scheme of 
arrangement in an examinership should not infringe such property rights.  The 
Constitution does not, however, outlaw or out rule  all interferences with property 
rights.  Objectively ju stified and proportionate interference with property rights are 
permitted.  However, any such interference must  also involve fair procedures.  This is 
illustrated by the decision of the Supreme Court in  Dellway Investments v. National 
Asset Management Agen cy [2011] 4 I.R. 1.  That case concerned the exercise of 
powers conferred on the National Asset Management Agency ( “NAMA”) by the 
National Asset Management Agency Act, 2009 ( “the 2009 Act”).  The aim of the 
statutory scheme created by the 2009 Act was to t ransfer bank loans of systemic 
significance (with their associated security) to NAMA, a state body, which would 
work out those loans in an orderly fashion.  The plaintiffs in those proceedings were 
borrowers who had provided security to a financial institu tion whose loan book and 
related security were required by NAMA under the 2009 Act. The plaintiffs were very 
68 
 
concerned by the acquisition of their loans and security by NAMA who they feared 
would act quite differently to the original lenders.  Among the arg uments made by the 
plaintiffs in those proceedings was  that they had an entitlement to be heard in advance 
of the acquisition of their loans by NAMA based on the significant impact that such 
acquisition would have on their property rights  in the remaining equity of redemption 
which they held in the underlying security .  They argue d that there had been a failure 
to give them such advance notice.  This argument was unanimously upheld by the 
Supreme Court.  At p.p. 296 -297, Hardiman J. said:  
 “It is trite law to say that a right to a hearing carries with it a right to 
notification of the proposed decision and to sufficient detailed information, 
including criteria, as may be necessary to allow the person to be affected to 
make the best case he can against the de cision which he  fears. He is also, very 
probably, entitled to reasons for the decision taken, if any. A finding that Mr. 
McKillen is entitled to be heard in the present case naturally imports these 
necessary consequences of the existence of that right. I d o not see in the 
circumstances of the present case a positive need for an oral hearing, though 
NAMA's obligations may of course be met in that way. I would not otherwise 
prescribe the nature of the hearing, which will ultimately depend on the 
circumstances  of the individual case. The basic incidents of a hearing are well 
covered in familiar textbooks and well known decisions …”.  
105. In the same case, Fennelly J. said at p. 328 : 
 “The fundamental underlying principle is fairness. If a decision made 
concerning m e or my property is liable to affect my interests in a material 
way, it is fair and reasonable that I should be allowed to put forward reasons 
69 
 
why it should not be made or that it should take a particular form. It would be 
unjust to exclude me from being h eard…”. 
106. The upshot of the decision of the Supreme Court in  that case was  that, 
notwithstanding that the 2009 Act made no provision requiring NAMA to afford a 
borrower  affected by a proposed course of action on its part to make representations 
in advance, t he 2009 Act had to be construed in a constitutional fashion in accordance 
with the principles laid down by the Supreme Court in  East Donegal Co -Operative 
Livestock Mart Ltd v. The Attorney General  [1970] I.R. 317. Under the latter decision, 
to the extent p ossible, legislation enacted since the adoption of the Constitution in 
1937 must be interpreted in a manner consistent with the Constitution and this extends 
to the procedures to be followed under the legislation.  In my view, the approach 
taken by the Sup reme Court in  Dellway  very plainly establishes that it is a 
fundamental principle of Irish constitutional law that, before a decision is taken which 
has the potential to interfere with constitutionally protected property rights, the party 
whose rights are in issue must be give n an opportunity to make representations.  For 
that purpose, it makes no difference whether the person concerned is a human person 
or a corporate body such as the Cork and Dublin landlords.  As Fennelly J. observed 
in Re. Eurofood IFSC Ltd  [2004] 4 I.R. 37 0 at p.p. 419 -420 these rights apply to both 
corporate bodies and private individuals.  In the same passage, Fennelly J. also 
identified that this principle is of cardinal importance, as a matter of public policy, in 
Irish law.  He said:  
 “The task of this Court … is to decide whether recognition  of the decision of 
the Italian court would be contrary to Irish public  policy. The provisions of 
Article 26 of the Regulation are matters of  Community law. Insofar as the 
decision of this Court inv olves an  interpretation of that a rticle, the Court will 
70 
 
be obliged to refer any  such question for preliminary ruling to the [CJEU].  
However, it is for this court to decide the issue  of Irish public policy. It is only 
if it comes to the conclusion that  the decision of the Parma Court should not, 
as matter of Irish public policy, be recognised that it will need to consult the 
Court of Justice …. 
The principle of fair procedures in all judicial and administrative  proceedings 
is, in Irish law, a principle of pub lic policy of cardinal  importance. It derives 
both from the rules of  natural justice of the common law and from 
constitutional guarantees of  personal and individual rights.  
The dictum of Gannon J . as to the scope of this fundamental principle, in  the 
State  (Healy) v Donoghue [1976] I.R. 325, at page 335, has been  repeatedly 
approved. It is:  
‘Among the natural rights of an individual whose conduct is  impugned 
and whose freedom is put in jeopardy are the rights to be  adequately 
informed of the nature and subs tance of the accusation, to  have the 
matter tried in his presence by an impartial and independent  court or 
arbitrator, to hear and test by examination the evidence  offered by or 
on behalf of his accuser, to be allowed to give or call  evidence in his 
defenc e, and to be heard in argument or submission  before judgment 
be given. By mentioning these I am not to be taken as  giving a 
complete summary, or as excluding other rights such as the  right to 
reasonable expedition and the right to have an opportunity for  
preparation of the defence’.  
71 
 
 These principles apply to all forms of proceedings, civil and criminal.  In an 
appropriate case, they may be invoked both by bodies corporate and  by non -
citizens …”. 
107. In light  of the principles which emerge from the case law just discussed, it is 
clear that the right to be heard before property rights are interfered with is a 
fundamental principle of Irish constitutional law and is therefore capable of attracting 
the applicatio n of Article 33.  That said, the approach taken by the Supreme Court in  
Eurofood  must be read in conjunction with the subsequent decision of the CJEU 
following the preliminary reference made to it by the Supreme Court.  In that case, the 
CJEU added the qua lification quoted below to the judgment of  Fennelly J. That 
qualification should be seen in against the backdrop of the facts of that case. There , 
the complaint was that the provisional liquidator appointed by the High Court in 
Ireland had not been given c opies of documents necessary to enable him to participate 
in and appropriately deal with the proceedings before the court in Parma.  In giving 
the judgment of the Supreme Court here , Fennelly J. had held that there had been a 
failure to afford a hearing to  the provisional liquidator.  The CJEU added a 
qualification to that finding in the following terms in paras. 66 to 68 of its judgment:  
“66. Concerning …  the right to be notified of procedural documents and, 
more generally, the right to be heard …  these r ights occupy an eminent 
position in the organisation and conduct of a fair legal process. In the 
context of insolvency proceedings, the right of creditors or their 
representatives to participate in accordance with the equality of arms 
principle is of parti cular importance. Though the specific detailed rules 
concerning  the right to be heard may vary according to the urgency for 
a ruling to be given, any restriction on the exercise of that right must be 
72 
 
duly justified and surrounded by procedural guarantees e nsuring that 
persons concerned by such proceedings actually have the opportunity to 
challenge the measures adopted in urgency.  
67.   In the light of those considerations, …  on a proper interpretation of 
Article 26 of the Regulation, a Member State may ref use to recognise 
insolvency proceedings opened in another Member State where the 
decision to open the proceedings was taken in flagrant breach of the 
fundamental right to be heard, which a person concerned by such 
proceedings enjoys.  
68.   Should occasion  arise, it will be for the referring court to establish 
whether, in the main proceedings, that has been the case with the 
conduct of the proceedings before the Tribunale civile e penale di 
Parma. In that respect, it should be observed that the referring co urt 
cannot confine itself to transposing its own conception of the 
requirement for an oral hearing and of how fundamental that 
requirement is in its legal order, but must assess, having regard to the 
whole of the circumstances, whether or not the provision al liquidator 
appointed by the High Court was given suf ficient opportunity to be 
heard”.  
108. Thus, as a matter of EU law, the right to be heard does not necessarily require 
that there should be an oral hearing of any representations to be made by a party 
affec ted by a decision to be made by the relevant “court” in the State where main 
insolvency proceedings have been opened.  What is crucial is that the party affected 
must be given a sufficient opportunity to make representations .  In the present case, 
counsel for the landlords strongly argues that this opportunity was not given to the 
73 
 
landlords in the process that was adopted in the course of the decision to approve the 
CVA at the creditors’ meeting which took place on 3rd July, 2019 in London.  This 
contention  on the part of the landlords was vehemently refuted by counsel for 
Monsoon who submitted that the landlords had every opportunity to attend the 
creditors’ meeting and to make representations to it.  They had received notice of the 
meeting and could readil y have turned up and made appropriate representations to the 
meeting.   
109. I have to say that I was initially inclined to the view that the submission made 
by counsel for Monsoon must be correct.  However, on further reflection, I have come 
to the conclusion that it does not withstand scrutiny. It seems to me that the response 
of counsel for the landlords is correct.  Counsel for the landlords, submitted that there 
was no reality to the argument made on behalf of Monsoon.  He pointed out that, as 
appears from the evidence of Mr. Smith QC, a meeting of this kind will usually be 
dominated by proxies who have already given authority to the chairman to vote on the 
resolution to vote either “yes” or “no” on the resolution.  That submission seems to 
me to be correct.   A consideration of the report provided by the chairman of the 
meeting, Mr. Wormleighton, illustrates that the only resolution that was tabled for the 
meeting was the resolution “for the acceptance of the proposed voluntary 
arrangement as circulated”.  Mr. Smith’s evidence in relation to the use of pre -signed 
proxies is unsurprising.  I believe it is fair to say, from  my own experience of class 
meetings on schemes of arrangement under the Companies Act, 2014 and its 
predecessor legislation , that the outcom e of such meetings are frequently decided by 
proxies furnished to the chairman in advance in which the vote to accept or reject the 
proposal has already been cast.  However, as described further below, a decision made 
by the creditors at such a meeting doe s not automatically bind a dissen ting minority.  
74 
 
Under Irish law, such a scheme  require s to be confirmed by the court  before it has 
legal effect .   
110. For completeness , it is important to note that, as a matter of Irish law, it is 
possible to vary the rights of creditors of a debtor company by means of a scheme of 
arrangement under s. 450 of the 2014 Act or by means of a scheme of arrangement  in 
an examinership.  However, in both of those cases, the position of creditors is 
protected in two ways.  In the first  place, in voting on such a scheme, the creditors 
will be grouped into appropriate classes.  Secondly, and very importantly, both such 
schemes require court confirmation.   
111. Insofar as the separation of  creditors into appropriate classes are concerned, 
the Irish courts, as the judgment of Laffoy J. in Re. Millstream Recycling Ltd [2010] 4 
I.R. 253 confirms, have consistently followed the approach taken in Sovereign Life 
Assurance Co. v. Dodd  [1892] 2 Q.B. 573 where Bowen L.J. said at p. 583:  
 “It seems plain that we must give such a meaning to the term 'class' as will 
prevent the section being so worked as to result in confiscation and injustice, 
and that it must be confined to those persons whose rights are not so 
dissimilar as to make it impossible for them to consult together with a view to 
their common interest”.  
112. By separating classes in that way, conflicts of interest are avoided and, in the 
words of Bowen L.J. in the Sovereign Life Assur ance  case, at p. 583, it is also 
possible “not to place in the hands of some of the creditors the means and opportunity 
of forcing dissentients to do that which it is unreasonable to require them to do, or of 
making a mere jest of the interests of the mino rity”.  The separation of creditors into 
classes thus provides the first layer of protection for creditors.  
75 
 
113. In the case of both schemes of arrangement under s. 450 of the 2014 Act and 
schemes of arrangement in an examinership, the next layer of  protection a vailable for 
creditors i s that the scheme will not have legal effect unless confirmed by the court. 
Creditors have a right to be heard before the court confirms the scheme. In addition, 
as Clarke J. (as he then was) noted in McInerney Homes Ltd  [2011] IEHC  4 at p. 6, 
the case law with regard to what is now s. 450 makes clear that , although there is no 
statutory test to this effect,  the court will consider (inter alia) the fairness and equity 
of a proposed scheme in determining whether it should be approved.   Similar 
observations  were made by Kelly J. (as he then was) in Re. Colonia Insurance 
(Ireland) Ltd  [2005] 1 I.R. 497. As noted above, a ny dissenting creditor will be given 
an opportunity to be heard.  In that way, the constitutional rights of any of the c reditors 
of the company will be appropriately vindicated and protected.  As Murnaghan J. 
observed in the Supreme Court in  Re. John Power & Son  [1934] I.R. 412 at p. 432:  
 “The compromise or arrangement which can only be made binding against 
the wishes of the dissentient shareholders… requires the sanction of the court.  
In my opinion the court under this section can give all due weight to the 
opinion of the majority of the shareholders but the court is in no way bound 
merely to register the opini on of this majority.  The sanction to be given by the 
court must be a real sanction, and to my mind the meaning of the section 
clearly is that no majority under the section can carry an arrangement which 
a fair and impartial mind would not sanction”.  
114. Simil arly, insofar as schemes of arrangement in examinerships are concerned, 
the court is expressly enjoined by s. 541 (4) from confirming any such scheme unless 
(a) at least one class of creditors whose interests or claims would be impaired by 
implementation o f the proposals has accepted them, (b)  the court is satisfied that the 
76 
 
proposals are fair and equitable in relation to any class that has not accepted the 
proposals (and whose interests or claims would be impaired by them) and (c) that the 
proposals are no t unfairly prejudicial to the interests of any interested party. Again, 
the creditors have a right to be heard on any application to confirm a scheme. As a 
consequence of the approach which is taken , the constitutional rights of any interested 
party (inclu ding the right to be make representations before an adverse decision is 
made) will be appropriately vindicated and protected.   
115. In the  context  of examinerships , the landlords have placed particular emphasis 
upon the provisions of s. 544 of the 2014 Act which imposes additional limitations on 
the court’s power when it comes to a scheme of arrangement that purports to modify 
leases.  In my view, counsel for the landlords was correct to suggest that this 
provision is clearly concerned to ensure that constit utional property rights are 
adequately protected in the context of an examinership.  That said, it must be 
acknowledged that under s. 537 of the 2014 Act, it is possible for an application to be 
made to the court to repudiate a n onerous  contract such as a lease.  Such applications 
have been made from time to time.  However, no such application could be made 
without giving the relevant landlord an opportunity to be heard.  Furthermore, the 
involvement of the court ensures that  the constitutional rights of th e landlords  will be 
respected.   
116. Thus, although Irish law clearly envisages that the rights of creditors and 
leaseholders can be modified, there are inbuilt mechanisms available in the law to 
ensure that constitutional rights are properly respected and tha t procedures are 
adopted which a re fair and which protect such rights.   
77 
 
The failure to give the Irish landlords an opportunity to be heard before the 
votes of creditors were cast  
117. In contrast,  the arrangements that were put in place in relation to the CVA 
process here made no provision to address the particular issue which arose in relation 
to the Irish leases and the manner in which the CVA purported to vary those leases.  
For the reasons outlined in paras. 101-107 above, there can be no doubt that it is a  
fundamental public policy that persons in the posit ion of the Irish landlords here 
should have been given an opportunity to be heard in relation to the changes which 
the CVA proposed  to be made to obligations and rights of the parties under the Irish 
leases. Those changes have  significantly interfered with the existing constitutionally 
protected rights of the landlords.  Given that the leases are governed by Irish law and 
given the requirements of Arti cle 11 (2) of the Regulation, the  opportunity to be hea rd 
should have extended to giv e the Irish landlords t he facility t o bring the provisions of 
Irish law (including Irish constitutional law) to the attention of all of the creditors w ho 
intended to vote on the CVA.  While counsel for Monsoon argued that the l andlords 
could have turned up to the meeting and made their representations, the manner in 
which the meeting was convened and organised did not provide for this.  A 
consideration of the chairman’s report makes this very clear.  There was no element of 
the procedure  that was adopted in this case which provided  a mechanism for the 
making of representations by the Irish landlords to all of the creditors who would 
ultimately be voting at the meeting (whether in person or in proxy).   That is 
something that would  have had to be flagged in advance so that the body of creditors 
as a whole would have known that it was something on which their views would be 
required.  I have no doubt  that it must have been possible to address the issue 
appropriately.  For example, I note from para. 6 of the chairman’s report, that, prior to 
the meeting, a number of drafting clarifications in relation to the proposals had been 
78 
 
placed on a web portal for the attention of all creditors.  It strikes me that the creditors 
could also have b een informed in advance by similar means of any proposal to allow 
representations to be made by landlords.   
118. I am conscious that, as para. 7 of the chairman’s report records, it appears 
there was some level of debate at the meeting in that two modification s to the 
proposals were proposed.  However, it is noteworthy that these were not accepted by 
Monsoon and that, as a consequence, they were not put to the meeting.  This 
reinforces the conclusion that the outcome of the meeting was determined by the 
existen ce of the written proxies in which votes had already been cast for the resolution 
to accept the CVA.   
119. Given the nature of the meeting  and the way in which it was organised , I 
cannot see how the right of the Irish landlords to make representations could ha ve 
been upheld if they had turned up at the meeting.  The procedure which had already 
been adopted did not take account of their position and of the need (if the fundamental 
public policy requirements of Irish law were to be met) to give the land lords an 
opportunity to be heard by all of the creditors participating in the meeting either in 
person or by proxy .  Crucially, this would have required advance notice being given 
to all of the creditors to that effect so that they would be apprised of the need to 
consider any such representations before  casting their votes on the proposed CVA.  In 
this context, I do not go so far as to suggest (as had been argued by counsel for the 
landlords) that the position of the Irish leases could only be determined by some 
judicial authority.  I do not believe that it is necessary to go so far.  Having regard to 
the broad interpretation to be given to the term “court” in the Regulation, I do not 
exclude the possibility that the Irish leases could have been lawfully addressed by  an 
appropriate mechanism put in place within the CVA process.  The basic difficulty, in 
79 
 
terms of recognising the outcome of the CVA process is that the process itself did not 
provide for any mechanism to permit any necessary representations to be made by the 
Irish landlords and  or for an appropriate mechanism to consider those representations  
by all of the creditors in advance  of casting their votes .  
The suggestion that the availability of a court challenge cured any want of fair 
procedures  
120. The conclusion reached in para. 119  is not, however, the end of the enquiry.  
As noted above, counsel for Monsoon argued that the existence of a right to contest 
the outcome of the CVA process before the English courts cures any possible defect 
in the underlyi ng CVA process itself.  He relied in this context on the observations 
made by Bork & Mangano (quoted in para. para. 96  above) and by Bork & Van 
Zwieten (quoted in para. 97 above).  I do not, believe that the existence of a right to 
challenge necessarily ha s the effect of curing any want of fair procedures at first 
instance.  In my view, the authors of Bork & Mangano and Bork & Van Zwieten go 
too far in suggesting that the right of appeal or the right of challenge is sufficient  to 
displace the application of  Article 33 .  I note, in this context, that Bork & Mangano 
expressly rely on Article 34 (2) of the Brussels I Regulation as authority for the 
proposition that no violation of public policy is to be assumed if the participant in 
question fails to challenge the judgment when it was possible to do so.  This coincides  
with what is now Article 45 (1) (b) of the Brussels I Recast Regulation which is in 
identical terms to Article 34 (2) of the previous Regulation .  Article 45 (1) (b)  
provides that , where a judgmen t is given in default of appearance where a defendant 
was not served with the initiating document in  sufficient time to enable a defence to 
be arranged, recognition of a judgment can be refused “unless the defendant  failed to 
commence proceedings to challe nge the judgment when it was possible for him to do 
80 
 
so”.  I fully appreciate that, as the CJEU made clear in Eurofood , the public policy 
provision contained in the Regulation should be construed in a similar way to the 
equivalent provision contained in the  Brussels regime (now contained in Article 45 
(1) (a) of the Brussels I Recast Regulation).  However, the CJEU has  not, insofar as I 
can see, gone  so far as to suggest that this applies to Article 45 (1) (b).  In my view, it 
is crucially important to note that Article 45 of the Brussels I Recast Regulation is not 
mentioned in Article 32.1 of the Recast Insolvency Regulation.  As noted earlie r in 
this judgment, Article 32 provides that judgments falling within its ambit (such as a 
decision to approve a compo sition with creditors) are to be enforced in accordance 
with certain provisions of Chapter III of the Brussels I Recast Regulation.  However, 
it is essential to keep in mind that Article 32 (1) does not go so far as to apply the 
entire of Chapter III  to the insolvency regime .  Article 32 limits th e application of 
Chapter III  solely to Articles 39 to 44 and 47 to 57.  No mention is made of Article 45  
of the Brussels I Recast Regulation .  It is true that  Article 45 (1) (a) of the Brussels I 
Recast Regulation contains an equivalent provision to Article 33  of the Recast 
Insolvency  Regulation .  Thus the case law of the CJEU on Article 45  (1) (a) and its 
predecessor provision is relevant as the decision in Eurofood  confirms.  But that does 
not, in my view, extend to Article 45 (1) (b) which has no equivalence in the 
Regulation and is not incorporated into the Regulation by Article 32 (1).   
121. I am reinforced in this conclusion by a consideration of the judgment of the 
CJEU in Eurofood  itself.  There is no suggestion in that judgment (or in the judgment 
of the Supreme Court in  Ireland in the same case) that the existence of a right of 
appeal cures any failure to afford appropriate fair procedures at first instance .  That is 
not to say t hat, in any particular case, the existence of a right of appeal would not be 
an important element in considering whether, in an overall context, there has been a 
81 
 
sufficiently flagrant breach of the fundamental right to be heard to justify the 
applic ation b y the court of a Member S tate of the public policy exception contained in 
Article 33.  Obviously, if there is  a well -established right of appeal or a 
straightforward application available to set aside the offending decision, that might be 
sufficient, depen ding upon the circumstances, to allow a court to conclude that there 
was no flagrant breach of the right to be heard. Thus, for example, in Emo Oil Ltd v. 
Mulligan  [2011] IEHC 552, Dunne J. in the High Court refused to apply the public 
policy provisions of  the 2000 Regulation in respect of a judgment given by the courts 
of Northern Ireland adjudicating the respondent , Mr. Mulligan, as a bankrupt.  At p.p. 
9 -10 of her judgment, Dunne J. said:  
 “I think it can be seen from the authorities referred to …, that in general 
terms a decision based on public policy to refuse recognition to a judgment of 
another Member State will only arise in exceptional circumstances.  The 
exceptions which have given rise to a refusal to recognise appear to be 
exceptions in which a fundamental right of an individual or entity has been 
engaged, such as the right to a fair trial.  
There is nothing in the submissions before me to suggest that the petitioner in 
this case cannot make an application in the High Court of Northern Ireland to 
have the order made in that jurisdiction set aside. Complaint was made on 
behalf of the petitioner to the effect that the petitioner was not represented 
before the Courts of Northern Ireland when the order was made in that 
jurisdiction. Further, the petiti oner was not informed of the intention of the 
debtor to make an application in Northern Ireland. Nevertheless,  that does not 
alter the fact that the petitioner does have a right to make an application in 
Northern Ireland to have the bankruptcy set aside in  that jurisdiction. That 
82 
 
being so it does not appear to me that any fundamental right of the petitioner 
has been breached in the circumstances of this case. …”. 
122. In that case, Dunne J. therefore adjourned the proceedings taken by the 
petitioner against the debtor in this jurisdiction generally with liberty to re -enter in 
order to give the petitioner an opportunity to make an application to the High Court in 
Northern Ireland to set aside the adjudication.  While that decision was not the subject 
of any argume nt at the hearing before me, it seems to me that it does not assist 
Monsoon in this case.  I have come to that conclusion in circumstances where, on the 
basis of the conflicting evidence of the experts as to English law  (as described in para. 
123 below) , there is considerable uncertainty as to the ability of the  Cork and Dublin  
landlords  to apply to the English courts to set aside the decision taken at the creditors’ 
meeting  on the grounds that there had bee n a failure to apply Irish law under Article 
11. That failure to apply Irish law led to the failure to give the Irish landlords an 
opportunity to be heard by the creditors meeting. Had Irish law been applied (as 
summarised in paras. 101 to 107 above), an appropriate opportunity to make 
representations to the creditors’ meeting would have been given to the landlords. In 
this context, notwithstanding the view which I have reached in para. 93 above, it 
seems to me that the ability to set aside the CVA on that ground  is crucial if the 
failure to accord fair pr ocedures at the CVA approval stage is to have any prospect of 
being cured. Otherwise, the alleged availability of a court challenge will be entirely 
illusory.  Thus, i f the failure at the CVA approval stage is to be cured, one would need 
to be able to concl ude with a sufficient degree of assurance  that the re is an effective 
route of challenge available to the Cork and Dublin landlords before the English 
courts to contest the outcome of the CVA process on the ground that there had been a 
failure to apply Irish law.  
83 
 
123. Mr. Smith QC suggested  that, in the circumstances of this case, there would be 
no ability on the part of the landlords to apply to the High Court of England & Wales 
under s. 6 (1) of the UK Insolvency Act (quoted in para. 28 above)  in order to p ursue 
a challenge  that, by reason of the  failure to apply Irish law as required by Article 11 , 
the CVA exceeded the jurisdiction available under Article 11 .  Mr. Smith QC, 
however, suggested  that it would be open to the landlords to contest the vires  of the 
CVA by means of a declaratory action under the ordinary jurisdiction of the English 
court s albeit that he conceded that the grant of such relief is at the discretion of the 
court .  In contrast, Mr. Briggs, the exper t retained by Monsoon, suggested, in hi s final 
report, that the only basis upon which a challenge could be taken to the outcome of 
the CVA p rocess is under s. 6 and he took  the view that the landlords would be able to 
invoke its provisions  in order to make the case that the CVA exceeded the jur isdiction 
under Article 11 .  
124.  Clearly, the fact that such eminent and experienced practitioners take 
opposing  views in relation to the availability of a route of challenge  suggest s that 
there is considerable uncertainty as to the correct position under Eng lish law.  One 
could not rule out the possibility that Mr. Smith QC is wrong in suggesting that there 
would be a route of attack under the ordinary jurisdiction of the court and that Mr. 
Briggs is wrong in suggesting that s. 6 is sufficiently broad to allo w a challenge by the 
Irish landlords  under the UK Insolvency Act.  In the course of the h earing before me, it 
was envisaged by the parties that I should attempt to resolve the issue as between the 
experts and to make a finding (treating English law as a mat ter to be proved as fact) as 
to which of the experts is correct in their interpretation of English law.  However, in 
the context of the fair procedures issue, I do not believe that it is necessary  or 
appropriate  to do so.  The very existence of the conflic t shows that there is a level of 
84 
 
uncertainty.  The fact that there is such uncertainty seems to me to be of very great 
significance in the context of fair procedure s.  In contrast to the Emo Oil  case, there is 
no clarity here as to whether there is a right  available to the landlords  to challenge the 
outcome before the English courts .  In those circumstances, I fail to see how the 
alleged exist ence of a right to challenge could be said to cure the defect in fair 
procedures in the decision of the creditors to  accept the CVA.  If anything, the 
uncertainty as to the position in English law compounds the want of fair procedure s.  
It can hardly be suggested to be fair that the landlords would have to take on the 
burden of taking a challenge to the English court in  circumstances where there is such 
uncertainty as to whether they had such a right of challenge.   
Conclusion in relation to public policy  
125. In the particular circumstances of this case, I have therefore come to the 
conclusion that the possibility of an appl ication to the English courts to challenge the 
outcome of the CVA is not sufficient to displace the conclusion which I have reached 
that there was a fundamental failure to provide an appropriate opportunity to the Irish 
landlords to make representations to  the meeting of creditors which was to take a 
decision  which would have such significant effects on their property rights under the 
Cork and Dublin leases.  Having regard to the observations of the Supreme Court in  
the Dellway  case and in Eurofood,  it is c lear that the obligation to provide an 
appropriate opportunity to make representations is a principle of public policy of 
cardinal importance which is necessary in order to give effect to the constitutional 
guarantee for the protection of property rights.  In these circumstances, 
notwithstanding the great respect which must be paid to the legal system of another 
Member State, I am constrained to conclude that recognition of the outcome of the 
CVA process insofar as it affects the Irish landlords would viola te the fundamental 
85 
 
principles of the State within the meaning of Article 33 of the Regulation.  For the 
reasons outlined above, I have come to the conclusion that the recognition or 
enforcement of the CVA as against the Irish landlords would be manifestly contrary to 
the public policy of the  State.  I stress that this conclusion relates solely to the 
procedure adopted in the CVA in this case.  As mentioned above, it seems to me that 
the procedural unfairness which arose in this case could have been avoided had 
appropriate steps been taken in the course of the CVA process  to address it 
appropriately . I therefore doubt that this decision will have repercussions for the 
future enforcement of CVAs in Ireland  
126. In light of the conclusion which I have reached in relation to procedural 
fairness, it is unnecessary to consider the case made by the landlords in relation to 
substantive constitutional law. It is also unnecessary to consider whether it might be 
appropriate to make a reference to the CJEU for guidance on the issue raised by the 
current author of Goode in relation to the possibility of an exception to Article 32  
where it is suggested that there is an obvious failure to apply the requirements of the 
Regulation.  
 
 
Estoppel  
127. As discussed at an earlier point in this judgment, estoppel arguments have 
been raised by both sides.  Insofar as the landlords are concerned, they argue that an 
estoppel arises on foot of the Shoosmiths’ letter (quoted in para. 18 above).  On behalf 
of Mo nsoon, the case was made in its defence that the initiation of these proceedings 
by the landlords is prohibited by the doctrine of res judicata  or the doctrine of issue 
estoppel or the rule in Henderson v. Henderson (1843) 3 Hare 100.  In my view, no 
86 
 
sufficient basis has been advanced on either side in support of these aspects of their 
respective cases.  
128. Insofar as the landlords are concerned, no evidence has been given by the 
landlords of detrimental reliance  on the alleged representation which the landlord s 
assert was contained in the letter from Shoosmiths .  In my view, that is fatal to any 
case based on estoppel.  While counsel for the landlords sought to rely on a decision 
of McKechnie J. in Finnegan v. Richards [2007] 3 I.R. 671, I cannot see anything i n 
the judgment in that case which supports the contention that it is not necessary to give 
evidence as to detrimental reliance.  The only application before McKechnie J. in that 
case was to dismiss the proceedings on  the grounds that they were bound to fai l.  The 
application was dismissed.  McKechnie J. held that a letter which had been written by 
the solicitors for the defendant in that case gave rise to an arguable ground of 
estoppel.  However, the judgment was not concerned with the evidence available to  
support that case.  McKechnie J. therefore did not have to concern himself with 
whether there was evidence of reliance.  In contrast, the present hearing was a full 
hearing of plenary proceedings . The parties were therefore required to place their 
evidenc e in full before the court in relation to each of the issues in dispute.  No 
evidence has been advanced in relation to detrimental reliance.  In such 
circumstances, the case made by the landlords on the basis of an alleged estoppel must 
fail.  Accordingly,  it is unnecessary to consider any of the other arguments advanced 
on behalf of Monsoon as to why the estoppel claim is misconceived.   
129. Insofar as the case made by Monsoon is concerned, while the issues in relation 
to res judicata  and related doctrines were strongly put forward as objections in the 
defence delivered on behalf of Monsoon, they were not the subject of any sustained 
argument at the hearing.  In these circumstances, I do not believe that a sufficient case 
87 
 
has been made out for the application o f res judicata , issue estoppel or the rule in 
Henderson v. Henderson.  Moreover, it is difficult to see how these principles can be 
said to have the effect of  disapply ing the provisions of Article 33.  No argument was 
addressed to that very important issue .  In those circumstances, I have concluded that 
no sufficient case has been made out by the defendants for the application of any of 
these doctrines .   
The guarantee claim against MAIL  
130. The Cork premises were originally occupied by MAIL.  In June 2013, the  
lessee’s interest in the premises was assigned by MAIL (with the licence of the Cork 
landlords ), to Monsoon.  Under the terms of the licence dated 21st June, 2013, MAIL 
gave an indemnity and guarantee to the Cork landlords in the following terms:  
 “5.1 Covenant and indemnity by guarantor: The guarantor hereby covenants 
with the Landlord, as a primary obligation, that the Assignee or the Guarantor  
shall duly perform and observe the covenants on the Assignee’s part contained 
in this Licence and shall at all times during the term … duly perform and 
observe all the covenants on the part of the Assignee contained in the Lease, 
including the payment of the rents and all other sums payable under the Lease 
… in the manner and at the times therein specified a nd all sums which may be 
due to the Landlord from mesne rates or as payment for the use and 
occupation of the Premises, and the Guarantor hereby indemnifies the 
Landlord against all claims, demands, losses, damages, liabilities, costs, fees 
and expenses wh atsoever sustained by the Landlord by reason of or arising in 
any way directly or indirectly out of any default by the Assignee in the 
performance and observance of any of its obligations or the payment of any 
88 
 
rent and other sums arising before or after ex piration or termination of the 
lease…”.  
131. Furthermore, Clause 5.6 of the licence is also important.  Clause 5.6 provides 
as follows:  
 “5.6 No release of Guarantor: None of the following, or any combination 
thereof, shall release, determine, discharge or in a ny way lessen or affect the 
liability of the Guarantor as principal debtor under the lease or otherwise 
prejudice or affect the right of the Landlord to recover from the Guarantor  to 
the full extent of this guarantee:  
5.6.1 Any neglect, delay or forbearanc e of the Landlord in endeavouring to 
obtain payment of the rents or any part or parts thereof and/or the amounts 
required to be paid by the Assignee or in enforcing the performance or 
observance of any of the obligations of the Assignee under the Lease;  
5.6.2 Any refusal by the Landlord to accept rent tendered by or on behalf of 
the Assignee at a time when the Landlord was entitled … to re -enter the 
Premises;  
5.6.3 Any extension of time given by the Landlord to the Assignee;  
5.6.4 Any variation of the te rms of the Lease … or the transfer of the 
Landlord’s reversion or the assignment of the Lease;  
5.6.5 Any change in the constitution, structure or powers of either the 
Assignee, the Guarantor  or the Landlord or the liquidation, administration or 
bankruptcy  (as the case may be) of either the Assignee or the Guarantor ;  
5.6.6 Any legal limitation, or any immunity, disability or incapacity of the 
Assignee ( whether or not known to the Landlord) or the fact that any dealings 
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with the Landlord by the Assignee may  be outside or in excess of the powers of 
the Assignee;  
5.6.7 Any other act, omission, matter or thing whatsoever whereby, but for this 
provision, the Guarantor would be exonerated either wholly or in part (other 
than a release under seal given by the Landlord) ”. 
132. There are identical provisions in the context of the second lease of the Cork 
premises.  MAIL was not a party to the CVA .  The case made by  the Cork landlords is 
that, accordingly, the obligation s of MAIL on foot of the indemnity and guarantee 
contained in  the licences are unaffected by the outcome of the CVA process.   
133. Monsoon contended  that, on the assumption that the court enforces the 
outcome of the CVA process, the claims on foot of the guara ntee provisions must fail.  
It wa s argued on beha lf of Monsoon that the guarantee provisions require that the 
position of MAIL must be equated with that of Monsoon, the principal obligor.  The 
case made by Monsoon is that the express and unequivocal effect of the CVA was to 
modify the obligations of Mons oon as principal obligor.  It was f urther submitted that, 
in accordance with the “statutory contracts” created by the outcome of the CVA 
process, the Cork landlords are treated as having entered into a consensual 
arrangement with Monsoon pursuant to which its rental obligations on foot of the 
Cork leases were reduced.  In those cir cumstances, it wa s argued that it is 
impermissible for the Cork landlords to claim that the obligations of Monsoon, as 
principal obligor, are greater than those provided for by th e terms of the CVA.  
Monsoon contended  that the guarantee provisions must be construed and applied 
accordingly such that MAIL can have no greater liability than Monsoon, as principal 
obligor.   
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134. In light of my conclusion in relation to Article 33, this issu e is no longer live.  
Nonetheless, lest I am wrong in my conclusion in relation to the application of Article 
33, I will address the issue.   
135. In my view, the argument made on behalf of Monsoon in relation to the 
provisions of Clause 5.1 and 5.6 of the respective licences is based on a mistaken 
premise.  Although MAIL is described in the licence as a “guarantor”, it is clear from 
the terms of the  licences (which are governed by Irish law) that the obligation s 
undertaken by MAIL are in the nature of primary obligations.  They are not in the 
nature of a secondary obligation which is co -extensive with the liability of Monsoon.  
This seems to me to be  clear from the  terms of Clause 5.1 of the licence u nder which 
MAIL covenanted with the landlord expressly as a “primary obligation” that 
Monsoon or it would duly perform and observe the covenants on Monsoon’s part 
contained in the lease including the paym ent of rents and all other sums due under the 
lease.  The obligation of MAIL is not cou ched in terms that it only arises  on a default 
on the part of Monsoon.  It is true that clause 5.1 contains an obligation to indemnify 
the landlord in respect of any los ses sustained arising out of a default on the part of 
MAIL but it is clear from the terms of clause 5.1 that this is an additional obligation to 
the primary obligation contained in the opening words of the clause.  This conclusion 
is reinforced by the prov isions of clause 5.2 which expressly provides that MAIL is 
jointly and severally liable with Monsoon for the fulfilment of all obligations of 
Monsoon under the lease and there is a specific agreement in the clause that “the 
Landlord, in the enforcement of its rights hereunder, may proceed against the 
Guarantor  as if the Guarantor  was named as the tenant in the Lease”.  
136. Secondly, it is plain from clause 5.6 of the licence that none of the events 
specified in sub -clause s 5.6.1 to 5.6.7 would release, determine  or in any way less en 
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or affect the liability of MAIL as principal debtor under the lease.  Among the events 
specified thereafter is any variation of the terms of the lease.  Thus, to the extent that 
the CVA varied the lease, the provisions of clause 5.6 v ery clearly, in my view, mean 
that there is no release of the liability of MAIL as a principal obligor in respect of the 
obligations which it undertook under the terms of the licence.  The result would be the 
same even if it were  the case  (which it is not)  that MAIL was a guarantor, in the true 
sense of that word.  Clause 5.6 has the effect of neutralising what has become known 
as the rule in Holme v. Brunskill  (1878) 3 QBD 495.  Under that rule,  a guarantor 
normally stands discharged where a material varia tion is made to the terms of the 
principal contract, in this case, the lease between the landlord and Monsoon.  
However, a provision such as clause 5 .6 displaces that rule.  This is evident, for 
example, from the decision of Hogan J. in ACC Bank Plc v. McC ann [2012] IEHC 
236 (where a very similarly worded clause was in issue to that contained in clause 
5.6).  If such a clause operates to neutralise the rule in Holme v. Brunskill , it seems to 
me to follow that the obligations of MA IL under the licence contin ue in  full force and 
effect notwithstanding the variation purported to be made to the obligations of 
Monsoon under the lease as a consequence of the CVA.   
137. For completeness, it should also be noted that the terms of the CVA were 
carefully drafted to ensure  that the CVA would not affect the right s or liabilities of 
any person other than Monsoon itself.  Clause 12.2.1 of the CVA provides as follows:  
 “Nothing in this clause 12 or the compromise effected by this CVA shall, 
except so far as is necessary for the  purpose of releasing the company from 
Liability, affect and it is not intended to affect, the rights or Liabilities of any 
person other than the Company and the rights of any person other than their 
rights against the Company (including without limitation , any Liabilities of 
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any Contingent Property Creditor to any person, including any Category 6 
Landlord).  For the avoidance of doubt, and without any limitation, the rights 
of any Category 6 Landlord against Contingent Property Creditors are fully 
reserved  and unaffected by the CVA, except so far as is necessary for the 
purpose of releasing the Company pursuant to the terms of a CVA”.  
138. Both Mr. Smith QC and Mr. Briggs are of the view that, as a matter of English 
law, clause 12.2.1 does not affect the rights of landlords against relevant third parties, 
principally any guarantors  of leases.  According to Mr. Smith, the underlying reason 
is that it might well constitute unfair prejudice to release landlord’s rights against third 
parties without compensation.  No twithstanding that Mr. Briggs expressed agreement 
with this view, Monsoon continued to maintain the case at trial that, since the 
provisions of the licence agreement are governed by Irish law, Monsoon was entitled 
to make the case outlined in para . 133 abo ve. For the reasons already discussed, I am 
of the view that Monsoon’s argument as to the impact of the CVA on MAIL’s 
obligations under the licence agreement s is incorrect.   
139. I would therefore determine that, even if the CVA is enforceable in Ireland, it 
does not affect the entitlement of the landlord to pursue MAIL in respect of the 
lessee’s obligations under the Cork leases.   
 
 
The relief to be granted  
140. In light of the conclu sions which I have reached in this judgment, it seems to 
me that the following orders require to be made:  
(a) A declaration in similar terms to that contained in para. 38.3 of the statement 
of claim  delivered in the proceedings taken by the Cork landlords  that, for the 
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purposes of Article 33 of the Recast Insolvency Regulation, the CVA, insofar 
as it purports to effect any variations of or modifications to the terms of each 
of the Cork  and Dublin  leases  respectively , is not entitle d to be recognised or 
enforced  in the State on the grounds that, to do so, would be manifestly 
contrary to the public policy of the State;  
(b) In addition, insofar as the proceedings taken by the Cork landlords are 
concerned, it is appropriate to make a  declaration  in similar terms to tha t 
contained in para. 38.8 of the statement of claim  in that case that the 
obligations of MAIL under the licence as described above are not released, 
determined, discharged , or in any way less ened or affected by any purported 
variation of the said leases in or pursuant to the CVA or by any action 
purported to be taken by Monsoon in respect thereof.  
(c) I will direct that the plaintiff’s solicitors in the Cork and Dublin proceedings 
should  prepare a draft order and should liaise with the solicitors for the 
defend ants with a view to agreeing the terms of the draft order.  If agreed, the 
draft order should be submitted to the registrar not later than fourteen days 
from the date of this judgment.  If there is disagreement as to the form of the 
order, then each of the  parties should submit to the registrar not later than 
fourteen days from the date of this judgment, a draft of the order which they 
respectively believe should be made, having regard to the terms of this 
judgment.  
(d)    Insofar as costs are concerned, the p arties should seek to agree the form of 
order to be made in relation to costs.  In the event that the parties are unable to 
agree the form of order to be made, written submissions in relation to costs 
should be furnished to the registrar not later than four teen days from the date 
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of this judgment following which I will give a written ruling in relation to 
costs.