Morton Fraser act in landmark Scheme of Arrangement ruling
Posted: Friday 29 January 2010
The Inner House of the Court of Session has today overturned a controversial decision which has had far-reaching ramifications for the insurance industry. Since December 2008, Morton Fraser has been acting for The Scottish Lion Insurance Company in their application to the Court of Session for sanction of a Scheme of Arrangement. The petition was unexpectedly dismissed in September 2009, and an appeal was immediately marked. After a four-day hearing in December, the First Division of the Inner House, chaired by the Lord President, Scotland's most senior judge, has unanimously decided that the earlier ruling was wrong and has allowed the company to continue with its application.
The case has attracted much international attention, and has been the subject of intense press coverage both in the UK and overseas. Within the last week, the case was the subject of papers at an insurance conference in New York. Scottish Lion is represented in Scotland by Joy Barnard, a partner in our commercial litigation team, Robert Howie QC and Almira Delibegovic-Broome, Advocate. Morton Fraser are instructed by Mayer Brown International LLP, London.
Today's outcome has caused a sigh of relief throughout the insurance market where Schemes of Arrangement of this type have become commonplace. Had the decision gone the other way, such schemes would have been possible only in exceptional circumstances, changing the way insurance companies in run-off deal with their businesses.
