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Petricca & Co Capital Limited succeeds in complex cross-border insolvency jurisdiction battle relating to a collective investment undertaking

Lady Moon SPV SRL v Petricca & Co Capital Limited

Instructed by Memery Crystal, James Mather acted for Petricca & Co Capital Limited, a London based fund manager, in its successful application to challenge the jurisdiction of the English Court to determine at trial, CPR Part 8 proceedings commenced by an Italian fund creditor, Lady Moon SPV SRL, an Italian SPV owned or managed by Cerberus.

In judgment, the Court analysed the applicable EU legislation relating to insolvency in the context of collective investment undertakings, the so-called “dovetailing principle” and arguments on forum non conveniens before finding in favour of Petricca and staying the proceedings.


Lady Moon, an Italian SPV owned or managed by Cerberus, and one of the creditors of an Italian investment fund (an Orizzonte Fondo Comune d’Investimento Alternativo di Tip Chiuso e Riservato) (the “Fund”), commenced CPR Part 8 proceedings against Petricca, a London based fund manager in September 2018. Pursuant to CPR Part 64, Lady Moon sought directions that Petricca as the Fund’s “trustee” should wind-up the Fund, which it alleged should be treated as a trust, or sell its assets. Petricca issued an application under CPR Part 11 to challenge jurisdiction in October 2018. Prior to the making of the claim, Lady Moon had commenced Italian proceedings to enforce its rights to be paid as a secured creditor. It was common ground that the Fund was governed by Italian law and that its assets and creditors were all located in Italy.

Issues in question

The issues before the Court included, by way of summary, whether:

  1. the Fund could be treated as a trust under English law;
  2. the Part 8 proceedings were within the Recast Brussels Judgments Regulation 1215/2012 (“the Recast Judgments Regulation”) or fall within the insolvency proceedings exception in that regulation at Article 1(2)(b) (the “Insolvency Exception”);
  3. if within the Recast Judgments Regulation, whether the Part 8 proceedings should be stayed in favour of the prior Italian proceedings; or
  4. alternatively, if within the Insolvency Exception, whether the Part 8 proceedings should be stayed on forum non conveniens grounds because the Italian courts are available and clearly and distinctly a more appropriate forum.

The Judgment

In judgment, the Court held that Lady Moon had mis-interpreted the relevant EU rules. The fact that the regime of EU regulation expressly leaves collective investment undertakings (COUs), like the Fund, to national supervision and regulation does not mean that proceedings to wind COUs up as insolvent are outside the Insolvency Exception. It did not create any gap or overlap in the EU regulatory regime for the purposes of the “dovetailing principle” (by which it is presumed that EU legislation is intended to cover an entire subject without gaps or overlap). The Part 8 proceedings were clearly within the Insolvency Exception.

On the question of forum non conveniens, the Court declined to exercise its jurisdiction and stayed the proceedings in favour of the Italian Courts applying the test in Spiliada Maritime Corporation [1987] 1 AC 460 on the basis that Italy was an available forum expressing that “An Italian forum must be what the Unitholders and creditors bargained for”. In doing the court observed “a strong whiff of old-fashioned forum shopping and even potential oppression about its [Lady Moon’s] position.” Allied to this the Court held that if the Recast Judgments Regulation had been held to apply to the Part 8 Claim (which it did not), the court would in any event have stayed the proceedings under Article 29 of that regulation (Lis pendens – related actions) by reference to the prior Italian proceedings.  To read the judgment in full, please click here.

James Mather was led by Stephen Atherton QC, 20 Essex Street and instructed by a Memery Crystal team led by partner Joel Seager along with partner Matthew Lindsay, senior associate Nikola Lowry-Lee and trainee solicitor Aoife Marrett.

Please click here to view the full judgment.