Author
Lorna Bramich

Lorna Bramich

Senior Associate

Read More
Author
Lorna Bramich

Lorna Bramich

Senior Associate

Read More

9 June 2022

R&I Update - June 2022 – 2 of 4 Insights

UK special administration for a company subject to Russian sanctions

  • Quick read

The UK Court recently granted a special administration order over Sberbank CIB (UK) Limited (the Company) following the impact of Russian sanctions imposed by the UK on its indirect Russian parent, PJSC Sberbank. 

Background 

PJSC Sberbank is subject to an asset freeze in the UK and the Company cannot carry on its business without the benefit of licences granted by the Office of Financial Sanctions Implementation (OFSI). 

The Company had faced difficulty engaging professionals willing to act. As an OFSI licence was about to expire, the directors applied for an urgent special administration order on grounds that the Company appeared or was likely to become unable to pay its debts (Ground A) and/or it was fair to put the Company into special administration (Ground B).

Decision 

The Court was satisfied with Ground A and B and placed the Company into special administration.   

While the Company was balance sheet solvent, "...Basically, as a result of the sanctions, the company cannot function in any normal way and has no means to pay its debts". 

The operational difficulties were such that it was 'fair' to place the Company into administration. It was in the interests of creditors that administrators were appointed to engage with banks, apply for licences and ensure compliance with sanctions while winding up the Company in an orderly way. 

Key takeaways

  • This case demonstrates the flexibility of the special administration regime and the Court's broad discretion when considering whether to make an order, including compliance with sanctions. 
  • Where insolvency proceedings are necessary due to the impact of Russian sanctions on UK companies, it may take time to find professionals willing/able to act and to apply for licences.

Find out more

To discuss the issues raised in this article in more detail, please contact a member of our Restructuring & Insolvency team.

Call To Action Arrow Image

Latest insights in your inbox

Subscribe to newsletters on topics relevant to you.

Subscribe
Subscribe

Related Insights

Aerial view of railroad tracks
Restructuring & insolvency

Can a UK liquidator claim breach of duty against a director when the company has been fined for the same misconduct?

5 August 2022
Quick read

by Lorna Bramich

Click here to find out more
Safety Deposit boxes storage in a Bank vault
Restructuring & insolvency

UK government report on CVAs - landlords are broadly equitably treated but there could be improvements

5 August 2022
Quick read

by Lorna Bramich

Click here to find out more
Empty red chair in the middle of green chairs in row
Restructuring & insolvency

When do UK company directors have authority to begin proceedings?

7 July 2022
Quick read

by Lorna Bramich

Click here to find out more