Legal Practice Notes

Scope of this Practice Note Land (or real property) is routinely provided as collateral for borrowing. In this setting, land is more significant than some other assets, as it may serve in personal lending scenarios (e.g. home purchases) just as much as in commercial lending transactions......

What is a Micklefield clause? It is now typical for employee share schemes to state that, when employment ends (or when an employee gives or is given notice of termination), any outstanding share awards are forfeited and any outstanding share options lapse. It is likewise increasingly standard for these schemes (and at times employment contracts) to include provisions by which the employee agrees to waive any entitlement to compensation for the loss of those awards on termination of employment. Such provisions are commonly called Micklefield clauses, taking their name from the leading authority on their effectiveness, Micklefield v SAC Technology Limited. More and more, these clauses are also framed to seek to preclude claims an employee might otherwise pursue alleging an unlawful exercise of discretions by the company under the employee share plan, and are deliberately drafted to capture attempts to challenge the way such...

What is a most favoured nation clause? A ‘most favoured nation’ ( MFN) clause typically appears in investment treaties and sets a baseline of treatment: the host state must not accord foreign investors treatment less favourable than that offered to investors protected under any other treaty. Absent an MFN clause, each party to a bilateral investment treaty ( BIT) may lawfully apply differing economic treatment to investors from separate jurisdictions. The function of an MFN clause is to align and harmonise the protections available to overseas investors across all BITs concluded by the host state. Where the substantive safeguards granted in one BIT fall short of those the host has promised in a BIT with a different state, an investor may invoke the MFN clause to import the superior standard of protection from the more beneficial BIT, thereby supplanting the weaker wording in the BIT on...

Introduction The business model that supports a liquefied natural gas ( LNG) project is crucial, as it shapes the project’s overall risk profile and, in turn, the form of financing required. The selection ultimately rests on several factors, such as risk appetite, fiscal and tax drivers, and the investor’s financing considerations, alongside whether they wish to invest in one or more segments of the LNG chain (for more on the LNG value chain, see Practice Note: LNG—an introduction). LNG projects can be configured in a range of ways: integrated/non-integrated merchant/tolling In an integrated arrangement, ownership is aligned across the whole LNG chain, from production through to liquefaction—that is, one or more investors holding the underlying upstream concession/ PSC also hold the rights to the natural gas reserves......

Stop Press: The LMA Private Placement papers are at present labelled for reference only, while the LMA considers the future path and purpose of these forms. Introduction Securing private placements across Europe is inherently dependent on local rules: documentation style, customary practice and governing law materially vary from country to country and from one jurisdiction to the next within each market. For businesses seeking to place privately in the UK, or to approach investors accustomed to English law, the Loan Market Association (the ‘ LMA’) has produced a set of English law-based template papers known as the Pan- European Private Placement ( PEPP) documentation. These templates were created to act as a practical springboard for issuers and investors alike, encouraging higher deal throughput and wider recognition of private placements as a credible funding method. Although the LMA labels these forms as ‘reference only’...

It is almost invariably sensible for the partners of a limited liability partnership ( LLP) to put in place a limited liability partnership agreement, both to prevent any unsuitable default rules under the Limited Liability Partnerships Act 2000 ( LLPA 2000) from automatically taking effect, and to augment the statutory legal regime where it is lacking. Default provisions The Limited Liability Partnerships Regulations 2001, SI 2001/1090 ( LLPR 2001) provide default terms that will govern how an LLP operates if, and to the extent that, there is no express agreement to the contrary......

This Practice Note examines when litigants in person ( LIPs) may appear and advocate for themselves at trial and at other hearings. It also covers support for LIPs by Mc Kenzie friends, how companies might be represented by employees or Mc Kenzie friends, and the particular rules governing LIP representation on the small claims track. It provides guidance on interpreting and applying the relevant CPR provisions. Depending on the court dealing with your case, you may need to consider additional requirements—see: Court specific guidance. For further material on litigants in person, see: Parties and their representatives—overview. Rights of audience Rights of audience are regulated by Part 3 of the Legal Services Act 2007 ( LSA 2007). A litigant in person, as a party to the proceedings, holds rights of audience in that case and may represent themselves at trial and in other hearings ( LSA 2007, s 19 and...

What is a liquidation stay? A liquidation stay, when operative, broadly mirrors a moratorium or interim moratorium in administration under paragraphs 43 and 44 of Schedule B1 to the Insolvency Act 1986 ( IA 1986). For more on the administration moratorium, see Practice Note: The moratorium in administration. While the stay is in place, no claim or proceedings may be started or carried on against the company or its property without the court’s permission. Any proceedings allowed may proceed only on such terms as the court chooses to impose. This Practice Note considers when the liquidation stay takes effect, what it does, and the factors the court weighs when deciding whether to lift the stay or, where apt, to impose it. When the liquidation stay applies, its purpose and effect Unlike the moratorium or interim moratorium in administration, a liquidation stay does not arise...

On an asset acquisition that includes leasehold premises, the property can either be transferred in full to the purchaser or, alternatively, a fresh lease can be granted. Whenever a leasehold interest is involved—whether already in place or newly created—key points arise, outlined below. Existing lease: points to consider Assignment provisions Where the deal includes leasehold property, the lease’s alienation provisions must be scrutinised to ensure that every condition relating to assignment is strictly complied with. The remaining terms of the lease should likewise be reviewed to check that no clauses are impacted by an assignment, for example a break right that is personal to the seller, or a surrender‑back clause. If any lease contains an absolute prohibition on assignment, the buyer may require a deed of variation (or comparable certainty) from the landlord, or, alternatively, may ask for the property to be taken out of the...

What is a lease surrender? A lease surrender is a mutual, jointly agreed arrangement between the landlord and the tenant to terminate the lease prior to the expiry of the contractual term, and in a manner not contemplated within the lease itself (e.g. by exercising a break option, etc). An express surrender is effected formally, most commonly documented by deed, although a deed is not always necessary (see: Express surrender below). A surrender by operation of law (also called an implied surrender) arises where the landlord and tenant, through unequivocal and consistent conduct, demonstrate that they no longer regard the lease as continuing between them (see: Surrender by operation of law ( Implied surrender) below). Accordingly, a surrender is often the product of negotiation in circumstances where the tenant cannot otherwise divest itself of the lease. Its availability frequently depends on the...

Judgment summons This Practice Note explains the criteria and process for deploying a judgment summons to enforce an order arising from family proceedings, with specific reference to human rights issues. Where a debtor is able to satisfy the liability yet refuses or fails to do so, the court may contemplate making a committal order. A judgment summons is issued under the Debtors Act 1869 ( DA 1869), and it requires the debtor to attend before the court. Provided the debtor has, or has previously had, the means to pay and nevertheless refuses or neglects to make payment, the court may direct imprisonment for a period not exceeding six weeks. The mandated procedural steps must be observed strictly and in full. In Prest v Prest, the Court of Appeal determined that the standard of proof is the criminal standard, and that the debtor cannot be...

This Practice Note outlines the nature and purpose of the Information Release Schedule ( IRS), how it operates within JCT contracts, and key practical points to bear in mind when deploying the IRS and embedding it in a JCT agreement. Information Release Schedule Under JCT, the IRS—see, for instance, the fifth recital of the JCT Standard Building Contract Without Quantities—sets out which information the Architect or Contract Administrator will issue, together with the timing of that release. In effect, it functions as a programme governing the orderly flow and delivery of design information. An IRS is required on a project where comprehensive design data is not available at the tender documentation stage, or will still be incomplete by the time the contract is executed. This arises most acutely on fast‑track schemes, where external drivers—typically determined by the project’s business case, for example a harvest deadline on a...

For an at‑a‑glance, high‑level outline of the civil court structure and hierarchy in England and Wales, see: Courts and Tribunals Judiciary— Structure of Courts and Tribunals System. Several civil courts issue a court guide explaining how business in that court should be managed, which operates alongside, and in addition to, further guidance given in the Civil Procedure Rules ( CPR). For further details, see Practice Note: Court guides and other guidance. For information on: claims that must be brought and issued in the County Court, see Practice Note: Starting civil claims in the County Court commencing a claim under CPR 8 (alternative procedure for claims where there is no substantial dispute of fact), see Practice Note: CPR Part 8 claims (alternative procedure for claims) High Court or the County Court? Whether proceedings ought to be issued in the High Court or the County Court is, in the main,...

ISDA documents The 1992 and 2002 editions of the ISDA Master Agreement (together, the Master Agreements) are standard-form documents issued by the International Swaps and Derivatives Association, Inc ( ISDA). Within this Practice Note, any reference to a Section of a Master Agreement or a Part of a Schedule should be read as a reference to the 2002 ISDA Master Agreement and its Schedule, unless stated otherwise. For general guidance on negotiating ISDA Master Agreements, see: Introduction to negotiating ISDA documents. Section 6— Early Termination Section 6 ( Early Termination) of the Master Agreement explains the consequences that follow the occurrence of an Event of Default or a Termination Event, as described in Section 5 (see Practice Note: Scope of the ISDA Master Agreement— Section 5 ( Events of Default and Termination Events)). It also sets out the way the close out netting mechanism operates after an Event of...

This Practice Note outlines: the principal corporation tax implications and consequences when a UK‑incorporated company enters an insolvent liquidation process, and certain other tax considerations which arise during the course of the liquidation process Liquidation is the process of concluding, or winding up, a company’s affairs prior to its ultimate dissolution. There are two distinct and separate forms of liquidation processes: one that applies to companies that are insolvent (ie where a company’s liabilities exceed its assets, or it is unable to pay its debts as they fall due for payment) and another that applies to companies that are solvent......

Maintained by Adrian Shipwright and Julian Hickey at Burnell Chambers Introduction to tax compliance Charities are not entirely outside the scope of taxation; however, they generally benefit from several exemptions (all of which are subject to complex anti-avoidance rules). Well-governed charities ordinarily will face no direct tax liabilities. A charity must prepare and submit tax returns in three clearly defined circumstances: if it receives a notice requiring it to file a return if it has taxable income, gains or profits not covered by a relief or tax exemption, for example income arising from trading that is not within the charitable trading exemption (see the Tax treatment of the charity guidance note) if it has applied income or gains to non-charitable purposes or into non-qualifying investments The type of Tax Return required depends upon the way in which the charity is constituted. Where a charity fails to declare the correct amount of tax on...

SGB- SMIT Gmb H sought a Part 26A restructuring plan ( RP) at a convening hearing in April 2023, with a sanction hearing in June 2023. The principal details are set out below. Name of plan company SGB- SMIT Gmb H (the Company) Place of debtor’s incorporation and jurisdictional factors Germany The Company executed a deed of contribution......

What are heat networks? Heat networks are systems that deliver heating to multiple users within a single building (communal heating) or across several buildings (district heating), drawing on shared heat source(s) and a shared distribution network of pipes and plant. Heat is usually supplied as hot water—steam is uncommon—and there is a growing move towards circulating lower temperature, ‘ambient’ heat... Where a DHN connects multiple properties, heat exchangers are typically employed to provide hydraulic separation between the central network and the individual building systems. This permits different pressures and circulation rates, and makes it easier to manage temperatures (and ownership) within local buildings... For further detail on the engineering of district heating networks, see Practice Note: District heating/heat networks—technology. This Practice Note summarises the obligations under the Heat Network ( Metering and Billing) Regulations 2014, SI 2014/3120 (as amended), which form a specific element of the legal...

This Practice Note outlines and condenses the range of calculators created by Lexis®+ UK Employment to support employment solicitors. Automated unfair dismissal schedule of loss or counter-schedule of loss The automated schedule of loss can be found here: Lexis®+ UK Employment— Schedule of Loss application. This tool offers a quick and precise method to draft a schedule of loss for an unfair dismissal claim......

This Practice Note sets out a comparison of headline aspects of the FIDIC 2017 and NEC4 suites, highlighting similarities and distinctions across their principal features. It specifically concentrates on the NEC4 Engineering and Construction Contract ( ECC) and the FIDIC Red Book 2017 ( Red Book), used primarily where the Contractor constructs to the Employer’s design in practice (although, where the scope includes any Contractor design, the Red Book accommodates this). For commentary on the 1999 edition of the FIDIC Red Book, see Practice Note: FIDIC 1999 and NEC4 contracts compared. Overall philosophy FIDIC FIDIC contracts are the leading international standard-form construction agreements. They are often described as ‘written by engineers, for engineers’. The suite is also recognised for balanced risk distribution, with liabilities generally allocated to the party best able to manage them (the EPC/ Turnkey variant, widely referred to as the Silver Book, is...