Negative pledge meaning

What this checklist covers This checklist sets out the principal matters a solicitor guiding a first time issuer must verify and, where appropriate, propose changes to, when reviewing English law terms and conditions governing an issue of debt securities...

What is form MR01 (Particulars of a charge) and when do you use one? A charge granted by a company registered in the UK must be filed at Companies House unless an exception in section 859A(6) of the Companies Act 2006 (CA 2006) applies (see: Which company charges are registrable at Companies House?). Missing the filing window can have serious consequences, so it is essential to complete registration within the required period. Form MR01 (Particulars of a charge) is the Companies House document used to record a company charge where the charge is: created, or evidenced, by an instrument dated on or after 6 April 2013 made by a UK-registered company If a company charge is not created or evidenced by an instrument, you should instead use form MR08 (Particulars of a charge where there is no instrument) to register it at Companies House. For details of other Companies House forms for registering company charges, see: ...

Constitutional and other documents Scrutinise the borrower’s constitution and ancillary papers to confirm clearly, at the outset, that: the borrower holds adequate authority under its constitutional instruments and governance documents (ie articles of association or partnership deed, etc) to incur debt and grant security interests, and no separate contract currently binding the borrower prevents or otherwise limits fresh/further borrowing or the creation of security interests (check any negative pledge wording in other finance, leasing or security papers) Lessons learned After verifying both the borrower’s powers and authority, locate and examine any current loan files and documentation for lessons learned, to determine what succeeds (avoid reinventing the wheel!), what fails (do not repeat known issues), and what might be refined or strengthened. Hindsight invariably makes everyone wiser. Consult the COO and CFO (as a minimum). Pose the following: who are the current bankers to the business? What is the character of the relationship? ...

In this issue: Arbitration in England & Wales International Arbitration Investment treaty arbitration Institutional and ad hoc arbitration Other arbitration and ADR-related news and developments Daily and weekly news alerts New and updated content Useful information No Weekly Highlights on 24 April 2025 Arbitration in England & Wales Arbitration clauses and third parties: limits of protection In Renaissance Securities v ILLC Chlodwig Enterprises [2025] EWCA Civ 369, the Court of Appeal refused an appeal for an anti-suit injunction (ASI) to halt Russian claims pursued against the appellant’s affiliates. Although parts of the dispute arose under contracts governed by English law with LCIA arbitration seated in London, the court concluded those promises to arbitrate did not bind non-party affiliates. It also dismissed the contention that the clauses carried an implied negative pledge preventing related litigation elsewhere. Moreover, while recognising the Russian action might be vexatious and/or aimed at sidestepping the arbitration provisions and relevant sanctions,...

Practice Note: Priority between security interests This Practice Note provides illustrations of how the rules on priority may operate in practice with reference to the relevant English law principles. It complements, and should be read alongside, our other Practice Notes on priority. New examples are added to this Practice Note on a regular basis. If you encounter a priority issue in practice that you would like us to cover, please use the LexisAsk function to inform us. Practice Note: Priority between security interests outlines the rules on priority from a more technical standpoint and should be consulted for the black letter law that supports the practical examples in this Practice Note. It is important to recognise that English law priority rules are complex and are widely acknowledged not to be clear in every respect. Outcomes can also be influenced by the parties’ actions, meaning law firms will often decline to provide an opinion on the priority of security and specialist advice may need to be obtained if there is...

Should a borrower enter insolvency, the lender might be required to divide the borrower’s available assets with fellow creditors and, consequently, recover only a portion of the sums due. Lenders commonly take security to guard against this exposure and improve the chances of repayment. When security is in place, the lender acquires an interest over the security provider’s asset(s), offering comfort that, if the borrower becomes insolvent, amounts can be recovered. As an alternative (or as well), a lender may obtain a third-party guarantee in respect of the borrower’s obligations. If the borrower does not repay, the lender can demand payment from the guarantor. This further raises the prospect of repayment, especially where the guarantor has strong credit or holds influence or control over the borrower (for instance, where it is the borrower’s parent). Not every loan facility is secured. Both approaches are intended to increase the chances that the lender is repaid even if the borrower cannot meet its obligations following the borrower’s failure to repay...

Coronavirus (COVID-19): Existing financings/utilised debt Do finance documents in your jurisdiction generally provide lenders with termination rights in a crisis? If so, are standard material adverse effect (MAC) clauses enforceable in that context? Yes. Beyond LMA-based templates, Czech banks frequently embed MAC-related termination rights either in loan agreements or within their general terms and conditions (GTCs), empowering the lender to terminate unilaterally, cancel commitments, or vary fees and/or interest rates, together with reimbursement of any additional costs. Typically, MAC wording covers, among other items, a failure by the borrower to perform obligations under the finance documents, a deterioration in the borrower’s financial condition or the value of the security provided, or an inability of the lender to exercise rights and pursue claims arising from the finance documents. Any termination must not be baseless, and the present epidemic does not, of itself, amount to a material adverse effect; accordingly, lenders should act prudently and obtain legal advice when setting out the justification for a MAC-triggered termination. Careful articulation of the...

1 Introduction 1.1 [ Insert organisation’s name ] acknowledges AI’s capacity to reshape our working methods and enhance the [ products and ] services we deliver. 1.2 We pledge to deploy AI safely and responsibly, upholding privacy, confidentiality, and the rights of third parties. This commitment extends to any AI operated by third parties for us. 1.3 As with many organisations, we increasingly rely on advanced analytics and technology to provide our [ products and ] services. These Principles explain how we employ AI in our operations. They rest on our dedication to corporate responsibility, which we describe as [ insert, eg the way we do business, working proactively to increase our positive impact and prevent negative impact ]. 1.4 In general, we use ‘artificial intelligence’ to denote machine-based systems that infer answers to defined tasks with some autonomy. However, these Principles reach beyond AI, covering any machine-derived insights produced through systems and methods from the wider field of data science. 1.5 We...

[ Insert organisation name ] has signed up to [ insert details of any environmental initiatives to which the organisation is a signatory, eg the United Nations Global Compact or the Science Based Targets initiative ]. The organisation is dedicated to advancing environmental sustainability and reducing negative environmental effects arising from our operations. We actively support global environmental aims, including the United Nations Sustainable Development Goals (SDGs). This policy sets out our pledge to responsible environmental stewardship, in line with international standards and best practice. 1 What are environmental impacts? ‘Environmental impacts’ are those described in ISO 14001, the UN Global Compact, and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. Under ISO 14001, environmental impacts mean any alteration to the environment, whether beneficial or adverse, resulting from an organisation’s activities, products, or services. Illustrative environmental impacts include: Climate change—energy consumption, transport, and greenhouse gas emissions from operations substantially drive global warming; Resource depletion—the use...

This Deed is executed on [ insert day and month ] 20[ insert year ]. Parties [ insert name of Company ], a company incorporated in England and Wales with registered number [ insert company number ], with its registered office situated at [ insert address ] (the Company); and [ insert name of lender ], of [ insert address ] (the Bank). Background Under the Facility Agreement, the Company owes obligations and liabilities to the Bank. [ The Company also has funds standing to the credit of the Deposit Account [ s ] . ] In consideration of the Bank providing, or continuing to provide, the Facility to the Company, the Company has agreed to enter into this Deed...