In a novel application of the ancient equitable jurisdiction that protects a debtor’s right to redeem mortgaged property, on 12 May 2023 Mr Justice Michael Green granted the Fortenova Group’s redemption action against LLC Shushary Holding – a subsidiary of VTB Bank PJSC, sanctioned in the UK, EU and USA. The action concerned €1.157 billion of senior secured floating rate notes issued by Fortenova and due to mature in September 2023. Approximately 40% of the notes were owned by Shushary.
The Court granted declaratory relief in respect of the inapplicability of default rates of interest in circumstances where Fortenova had been prevented, since February 2022, from making quarterly payments in respect of the Shushary-held notes as they fell due under contract, by the operation of UK, EU and US law. In the absence of identification of a suitable blocked account which Shushary might nominate to receive payment, the Court also declared that, after a refinancing exercise, Fortenova would be at liberty to redeem the security against which Shushary’s notes were held via a payment of all outstanding sums owed to Shushary into Court.