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Sigma Finance Corporation - No Longer First Among Equals?

November 18, 2009

By Christian Parker and Emma Osbaldeston

The UK Supreme Court (formerly the House of Lords), in its first appeal judgment, has overturned the decision of the Court of Appeal in the case of In re Sigma Finance Corporation (in administrative receivership) and determined that, on a proper construction of the security trust deed, the security trustee had no obligation to give priority to creditors whose debts matured first. In addition to being an important case in relation to the post-Lehman clean up, this is potentially a significant judgment in the context of the English law approach to the interpretation of contracts.