Commercial Disputes Weekly – Issue 2652 December 2025

Property – Finance enforcement
A company in default on a loan has unsuccessfully applied to conduct the sale of a property over which the loan was secured. The mortgagee had appointed receivers over the property and marketed it for sale, seeking offers in excess of £4.75m. The company considered that this was too low and that a sale in the region of £6m could be achieved. It applied under section 91 of the Law of Property Act 1925 to take over the sale process. The Court of Appeal upheld the lower court decision to refuse the application. There would need to be unusual circumstances before the court will interfere with the appointment of the receivers under a contractually agreed scheme, whose role is to manage the property for the benefit of the mortgagee, not the mortgagor. On the question of unfairness, there needed to be a likelihood of a sale at an undervalue and the company had failed to establish that. There was potential prejudice to the mortgagee in allowing the company to market the property. The receivers already had a willing buyer, there was no guarantee that the company would find a better buyer or that in those circumstances the current buyer would remain available. No sufficient case had been made out for interfering with the mortgagee’s rights.

Fairmont Property Developers UK Ltd v Venus Bridging Ltd [2025] EWCA Civ 1513, 26 November 2025

Fiduciary duties
The liquidators of a company have been awarded equitable compensation when the chairman of the company transferred assets of the company (shares in another company) after the company went into liquidation and the chairman’s powers as director had ceased. The assets of the subsidiary company were then transferred to another entity and the shares became worthless. The Supreme Court held that the chairman did owe a fiduciary duty, even though his powers ended with the litigation. In dealing with the property, he owed a duty to the person interested in that property and had breached it by acting contrary to their interests. The chairman’s argument that the liquidators suffered no loss because the shares were subject to an unpaid vendor’s lien failed. The shares were transferred to enable an IPO to take place and the parties had not intended to create such a lien. The later asset transfer did not break the chain of causation of the liquidator’s loss where the fiduciary had played a significant part in bringing about the asset transfer.

Mitchell v Al Jaber [2025] UKSC 43, 24 November 2025

Sanctions – Contractual obligations
Beneathco commenced proceedings against the defendant to obtain a transfer of US$16.5m held in a client account for Beneathco after derivatives trading through the defendant. The defendant refused to make payment. Beneathco was a specially designated national under the US sanctions regime. The court rejected Beneathco’s claim that it was entitled to the money being transferred to a bank account and in a currency of Beneathco’s choice. The defendant held the money on trust for Beneathco and although the contractual agreement was lacking in some details, the court held that the defendant’s obligation was to make payment to Beneathco on demand in US dollars. The instructions given did not comply with those terms (they requested payment in Emirati dirhams and to a third party) and so the defendant was not in breach of its obligations by not following the instructions. In the alternative, payment would also have been prevented by the US sanctions designation. Usually, under English law, the enforceability of a contract governed by English law will not have regard to illegality principles under other laws. However, the Railli Bros exception applies where performance under the contract requires something to be done in a place where it would be unlawful. Here, payment in US dollars would require acts by US correspondent banks that would be unlawful.

Beneathco DMCC v RJ O’Brien Ltd [2025] EWHC 3079 (Comm), 23 November 2025

Companies
The Chancery Court held that it could make an order to break the deadlock between company directors/shareholders and enforce rights under the Companies Act 2006. Minority shareholders (who were also two of the four acting directors) wished to appoint an independent director to release the deadlock that existed between the other minority shareholders (who were the other two acting directors). The company had been unable to circulate the proposed written resolutions to appoint the independent director because of opposition from the defendant directors. The Companies Act 2006, section 292 and 293 creates rights for the members of a company which can be enforced by criminal sanctions as set out in the Act, but also by injunctive relief and a declaration

Webster and another v ESMS Global Ltd and others [2025] EWHC 3107 (Ch)