Sequana And The Creditor Duty: An Offshore Perspective

On 5 October 2022, the UK Supreme Court delivered its judgment in the case of BTI 2014 LLC v Sequana SA & Ors [2022] UKSC 25. This judgment arose from an appeal brought by BTI 2014 LLC against a decision of the English Court of Appeal in 2019.

The Supreme Court's judgment is a landmark decision of significant importance in the arena of company law and directors' duties. It provides welcome clarification from the UK's highest court on issues that are of key importance to directors of companies in financial difficulty, addressing the question of the existence and scope of the so-called "creditor duty", as well as considering the circumstances in which the otherwise lawful approval of a distribution might give rise to liability, and the scope of the doctrine of shareholder ratification. This note briefly summarises the decision and provides insight into its likely application in offshore jurisdictions.